The Legal Tech Landscape in the past 5 years
Written by Shrisha Sapkota
Blogger
Technology, throughout history, has transformed our lives and has played the role of a catalyst of change.[1] Law, order, and justice are essential ingredients for ensuring trust in a global age.[2] Since legal services have become an international phenomenon, the need for services such as the provision of legal documents, sanctioned applications, intellectual-property management, and business are becoming more and more prominent.[3] Collaboration between legal and tech professionals is the driving force towards a new way to practice law.[4] Lawyers will always be an integral part of the legal system, but technology will “fill the gaps” to bring the legal industry the transparency modern clients demand.[5]
From computer automation taking on administrative tasks such as filing and invoicing to advances in artificial intelligence that streamline client intake and provide information on legal options, technology continues to transform the legal field.[6] In the last few years, the legal industry has seen immense change and emerging areas such as legal technology and legal operations have seen unprecedented growth.[7]
Modern law refers to the idea of taking a business centred approach to legal practice by embracing emerging technologies and new partnerships to increase efficiency and make smarter operational decisions.[8] Traditional law firms are facing a very large amount of pressure from clients to deliver more at less cost and higher quality. This goes with the advent of reforms in the legal market, especially those pushed by new technological opportunities.[9] Due to this, the market for Legal technology has been rising with some serious pace within the last 5 years.
Legal tech (digital solutions to providing legal services) have turned into the essential element of competition among legal-market stakeholders.[10] Legal Tech companies are often startups founded with the purpose of disrupting the traditionally conservative legal market.[11] Legal technologies enable the development of new business, and delivery models, and they provide enough incentives to clients and knowledge to lawyers, for the adoption of alternative legal services.[12]
Today, with big data it’s possible to forecast likely outcomes of cases and make data-driven decisions that bring the most benefit to clients while keeping costs down.[13] The fastest-growing segment of client service providers are now companies that package or deliver business or practical solutions to legal problems.[14] There is a general consensus that technology can make a big difference to the way legal functions work.[15]
In legal technology, it was half a decade of tumult and upheaval, bringing changes that will forever transform the practice of law and the delivery of legal services.[16] Due to the sudden rise of the Covid-19, law firms have not been immune, with clients reducing their business activity.[17]
In some markets, the legal function has been working with technology for some time and they are on their second or third wave of tooling solutions. In others, legal is exploring how technology might be used and which of the many products available on the market is best aligned with their needs.[18]
What those recent years of technologies in the legal sector have told the law practitioners is that the future will be truly game changing for not only legal technology, but for the entire legal industry itself.
Some Of The Most Significant Development In The Legal Tech Sector
Modernisation Of Legal Practice
Recently, the phrase “modern law” seems to be floating around in the legal industry.[19] From corporate counsel to law firms to contract attorneys, this term of art can carry several meanings.[20] In a nutshell, modern law refers to the idea of taking a business centred approach to legal practice by embracing emerging technologies and new partnerships to increase efficiency and make smarter operational decisions.[21] This has improved over the last five years of legal practice due to the lawyers evaluating the data and realising its insights.
Legal technology is destined to follow technology’s influence on the accounting industry, where companies have vastly changed the industry and made access to accounting services simple and inexpensive.[22]
The Global Connection Of Legal Industry
We are learning that, to a surprising degree, the problems that face the legal and justice systems in any one country are the problems shared by every country.[23] As the years have passed on, the softwares for legal work has gotten better and better.
Having relevant data in one place enhances you to forecast the changes in your legal workflow and create profitable strategies.[24] Video conferencing and productivity apps allow for dispersed law firms to collaborate while the same blockchain technology that cryptocurrency is built on allows smart contracts to be exercised seamlessly and securely.[25] One can attend a legal tech conference in one part of the globe and still be present in conversation of the law firms in another part of the world.
Cloud
Cloud is a Cost-effective document storage solution that is essential for the modern day law firm system. Law firms using cloud technology are able to grow without updating or adding equipment, software, IT staff, or other expenses associated with keeping data management in-house.[26]
Law firms too are quickly realising the value of Legal cloud and are trying to adapt.[27] The issues of data breach data theft, etc. can be very well avoided. The old-school thinking that the data is safe only in the organisation has seen its demise.[28] According to the ABA 2020 Legal Technology Survey, only 58% of law firms store data securely in the cloud.[29] Today, non-cloud companies – those that banked their futures on on-premises technology – are scrambling to move to the cloud, building cloud versions of their products or acquiring compatible cloud companies, while those that started in the cloud are prospering.[30]
It was anticipated that the surge in cloud-based software adoption will continue steadily through 2021. Lawyers, more than most, might be concerned about security in cloud computing, but as solutions get more robust, trust can be gained and adoption can increase.[31]
Artificial Intelligence
At the start of the decade, AI’s primary use in law was in e-discovery, where machine learning was employed to cut the time and cost of document review. Having used AI for regulating routine tasks, lawyers realised that AI could minimise mistakes, maintain consistency and defensibility, thereby allowing lawyers to focus on more impactful work.[32] At the close of the decade, AI is pervasive, used not only in e-discovery, but also in legal research, contract review, contract management, litigation, expert systems, e-billing, and more.[33] AI is also being adapted to create solutions which are a hybrid of technology with traditional, face-to-face lawyer/client contact.[34]
In an experiment conducted by a well-known legal Artificial Intelligent Platform, twenty experienced lawyers were pitted against an AI trained program to evaluate legal contracts. The AI program won by achieving an accuracy of 95% while the lawyers achieved, on average, an 85% accuracy rate.[35] In 2018, of $1 billion invested in legal technology that year, $362 million went to companies whose products use AI. The majority of the companies use AI in some fashion after 2018 and are with the morden times ensuring their chances of survival in this era.[36] According to Gartner, AI augmentation will provide $2.9 trillion of business value and 6.2 billion hours of productivity with workers in 2021.[37]
Change In Legal Ethics
Legal ethics refers to a set of norms on how an advocate must conduct himself/herself and behave in a professional workspace. Such professional ethics are of paramount importance for any occupation and it is no different in the legal field as well.[38]
With the advent of modern technology and its impact in virtually all fields of work, it becomes necessary to examine the legal profession as well from a technological viewpoint.[39] Technology has become an inescapable part of the legal profession around the world today. Right from documentation to communication to even litigation, everything is done online.[40] But tech competence was only part of the decade’s ethics story, as various forms of alternative legal services companies began to test the limits of what was allowed in serving the legal needs of the public.[41]
Integrating technological aspects into legal ethics becomes necessary at the moment.[42] Now, the most significant development of all is the emerging push for the kinds of regulatory reform that no one could have imagined years ago – for reforms that would allow private companies to participate in the ownership of legal services providers and that would broaden the ability of individuals who did not attend law school to practice law.[43]
Increased Market Share
Since 2017, there has been a 484% increase in the number of legal technology patents worldwide.[44] This percentage was increased by 750 in 2018 alone.[45] According to Statista, in 2019, the Legal Tech market generated revenues of 17.32 billion U.S. dollars worldwide along with the market forecast to grow at a compound annual growth rate (CAGR) of over 6%for the period to 2019-2025.[46]
The Investors’ tepid interest in software for law offices during the early years of this decade was likely attributable to a variety of factors, among them the legal industry’s slow adoption rate for new technology, the industry’s notoriously long sales cycle, and investors’ lack of familiarity with the industry.[47]
It was after the halfway of the decade that the investment in the legal tech firms started to become more relevant and within the last 5 years an incredible amount has already been invested into it. This means that the legal market is growing extremely rapidly and will increase by a lot in the upcoming years.
What We Can Expect In The Future
Legal services will continue to be unbundled
Over the next few years we will see a move towards the unbundling of legal services. This is where “non-lawyers” or technology will perform or complete some common legal tasks – and we’ve seen it start already. It’s not hard to envision a time where technology can complete the tasks which traditionally required the use of a lawyer.[48]
Junior Lawyers Will Change Into Legal Analysts
As technology automates such a large chunk of the tasks, which are usually assigned to the junior lawyers, it would give rise to a more linear structure of a law firm, which would be a shift from the traditional pyramidal structure.[49]
The role of a junior lawyer will change from the administrative tasks to operating and interpreting results from a legal tech software. As we have seen over the last five years or so, many administrative tasks have become automated and there is no reason to expect that this won’t continue.[50]
Easy Access To The Average Person
The current access-to-justice problem, even in what are typically thought of as mature systems, is significant. In fact, only about 46% of people have access to the legal system. There are unimaginable backlogs in some court systems. Technology can be used to help with this issue and make court a service rather than a place as legal resolution is moved online.
Now, as the decade closes, the most significant development of all is the emerging push for the kinds of regulatory reform that no one could have imagined 10 years ago – for reforms that would allow private companies to participate in the ownership of legal services providers and that would broaden the ability of individuals who did not attend law school to practice law.[51]
Efficient Legal Industry
Within the next few years, the Software for the legal sector will become a lot cheaper and simpler, and will be time efficient for the lawyers and the clients alike.
With Legal software tools implemented in the law firm, a high level of analysis can be done in a few minutes (e.g., fast calculation, advanced reports, management of cases turnover, caseloads control, document management, etc.).[52]
Speciality Lawyers
In the near future we may be able to witness the staff of the law firms specialising in their own skill sets and business models which might be different from other lawyers. Lawyers make the decision to move up the ladder and “specialise” or move down the ladder and “commoditise”.[53] ? The former requires a lot more specialised and experienced lawyers, the latter requires more technology and automation. This trend indicates that those that choose to stay in the middle will be left behind.[54]
References
[1][1] https://www.linkedin.com/pulse/how-legal-tech-transforming-global-landscape-himanshu-gupta
[2]https://mdpi-res.com/d_attachment/sustainability/sustainability-11-01015/article_deploy/sustainability-11-01015.pdf
[3]https://mdpi-res.com/d_attachment/sustainability/sustainability-11-01015/article_deploy/sustainability-11-01015.pdf
[4] https://www.jdsupra.com/legalnews/understanding-the-modernization-of-law-4622694/
[5]https://www.lawyersweekly.com.au/newlaw/27113-what-the-past-5-years-of-legal-tech-means-for-the-next-20
[6] https://zapproved.com/blog/a-history-of-how-technology-has-transformed-the-legal-field/
[7]https://www.lawyersweekly.com.au/newlaw/27113-what-the-past-5-years-of-legal-tech-means-for-the-next-20
[8] https://www.jdsupra.com/legalnews/understanding-the-modernization-of-law-4622694/
[9]https://mdpi-res.com/d_attachment/sustainability/sustainability-11-01015/article_deploy/sustainability-11-01015.pdf
[10]https://mdpi-res.com/d_attachment/sustainability/sustainability-11-01015/article_deploy/sustainability-11-01015.pdf
[11] https://en.wikipedia.org/wiki/Legal_technology
[12]https://mdpi-res.com/d_attachment/sustainability/sustainability-11-01015/article_deploy/sustainability-11-01015.pdf
[13] https://zapproved.com/blog/a-history-of-how-technology-has-transformed-the-legal-field/
[14]https://www.lawyersweekly.com.au/newlaw/27113-what-the-past-5-years-of-legal-tech-means-for-the-next-20
[15] https://www2.deloitte.com/global/en/pages/legal/articles/legal-technology-transformation.html
[16]https://www.lawnext.com/2020/01/the-decade-in-legal-tech-the-10-most-significant-developments.html
[17] https://hgcapital.com/insight/legal-tech-during-covid-19/
[18] https://www2.deloitte.com/global/en/pages/legal/articles/legal-technology-transformation.html
[19] https://www.epiqglobal.com/en-us/resource-center/articles/understanding-the-modernization-of-law
[20] https://www.jdsupra.com/legalnews/understanding-the-modernization-of-law-4622694/
[21] https://www.epiqglobal.com/en-us/resource-center/articles/understanding-the-modernization-of-law
[22]https://www.lawyersweekly.com.au/newlaw/27113-what-the-past-5-years-of-legal-tech-means-for-the-next-20
[23]https://www.lawnext.com/2020/01/the-decade-in-legal-tech-the-10-most-significant-developments.html
[24] https://ascendixtech.com/legal-tech-overview-best-legal-tech-companies/
[25] https://zapproved.com/blog/a-history-of-how-technology-has-transformed-the-legal-field/
[26] https://www.natlawreview.com/article/law-firms-are-switching-to-cloud-here-s-why
[27] https://www.linkedin.com/pulse/how-legal-tech-transforming-global-landscape-himanshu-gupta
[28] https://legodesk.com/blog/legal-practice/legal-tech-trends/
[29]https://www.forbes.com/sites/forbesbusinesscouncil/2021/04/30/the-elephant-in-the-room-technology-trends-in-the-legal-industry/?sh=2374eb276d35
[30]https://www.lawnext.com/2020/01/the-decade-in-legal-tech-the-10-most-significant-developments.html
[31]https://www.forbes.com/sites/forbesbusinesscouncil/2021/04/30/the-elephant-in-the-room-technology-trends-in-the-legal-industry/?sh=2374eb276d35
[32] https://ascendixtech.com/legal-tech-overview-best-legal-tech-companies/
[33]https://www.lawnext.com/2020/01/the-decade-in-legal-tech-the-10-most-significant-developments.html
[34] https://www.linkedin.com/pulse/how-legal-tech-transforming-global-landscape-himanshu-gupta
[35] https://zapproved.com/blog/a-history-of-how-technology-has-transformed-the-legal-field/
[36]https://www.lawnext.com/2020/01/the-decade-in-legal-tech-the-10-most-significant-developments.html
[37]https://www.forbes.com/sites/forbesbusinesscouncil/2021/04/30/the-elephant-in-the-room-technology-trends-in-the-legal-industry/?sh=2374eb276d35
[38] https://alb.lawfarm.in/blogs/legal-ethics-and-technology-what-has-changed
[39] https://ascendixtech.com/legal-tech-overview-best-legal-tech-companies/
[40] https://alb.lawfarm.in/blogs/legal-ethics-and-technology-what-has-changed
[41]https://www.lawnext.com/2020/01/the-decade-in-legal-tech-the-10-most-significant-developments.html
[42] https://alb.lawfarm.in/blogs/legal-ethics-and-technology-what-has-changed
[43]https://www.lawnext.com/2020/01/the-decade-in-legal-tech-the-10-most-significant-developments.html
[44] https://ascendixtech.com/legal-tech-overview-best-legal-tech-companies/
[45]https://www.lawyersweekly.com.au/newlaw/27113-what-the-past-5-years-of-legal-tech-means-for-the-next-20
[46] https://ascendixtech.com/legal-tech-overview-best-legal-tech-companies/
[47]https://www.lawnext.com/2020/01/the-decade-in-legal-tech-the-10-most-significant-developments.html
[48]https://www.lawyersweekly.com.au/newlaw/27113-what-the-past-5-years-of-legal-tech-means-for-the-next-20
[49] https://www.linkedin.com/pulse/how-legal-tech-transforming-global-landscape-himanshu-gupta
[50]https://www.lawyersweekly.com.au/newlaw/27113-what-the-past-5-years-of-legal-tech-means-for-the-next-20
[51]https://www.lawnext.com/2020/01/the-decade-in-legal-tech-the-10-most-significant-developments.html
[52] https://zapproved.com/blog/a-history-of-how-technology-has-transformed-the-legal-field/
[53]https://www.lawyersweekly.com.au/newlaw/27113-what-the-past-5-years-of-legal-tech-means-for-the-next-20
[54]https://www.lawyersweekly.com.au/newlaw/27113-what-the-past-5-years-of-legal-tech-means-for-the-next-20
