Is The Legal Industry in the UK lagging behind those in US and Canada?

Written by Shrisha Sapkota

Blogger

Aside from enjoying a common language, the US and the UK share rich and complex historical roots embedded into almost all parts of their respective cultures. From the legal systems, and political ideals to their shared love of patriotism, these two countries are comparable in many ways.^[1] George Bernard Shaw once wrote, “England and America are two countries divided by a common language.”^[2]

For starters, let us discuss the legal system differences in these countries:

Legal system differences:

Attorneys probably already know legal systems in both the U.K. and the U.S. share the same historical common law roots and are for that reason quite similar.^[3] Both countries apply ‘common law’ or ‘case law’ as it is often referred to in the US as a form of authority for legal decisions, by using earlier relevant judiciary rulings for how to apply a law under certain circumstances or as a guide for subsequent legal cases.^[4] Law Industry operators in Canada include sole proprietors or practitioners specialising in one particular type of law, as well as international law firms, which offer full legal services and can employ more than 500 attorneys.^[5]

Despite noticeable differences in legal terminology, both systems of law and the roles of its officers, such as lawyers and judges, remain similar.^[6] In the US, every legal professional is generally referred to as a lawyer, as litigators and non-litigators are not separately licensed, whereas in the UK there are solicitors and barristers – terminology that is not used across the pond.^[7] When people talk about going to see their lawyer, it is usually a solicitor that they will contact. Solicitors can work for a big range of organisation^[8] and then represent their clients in court in minor cases, but generally, their role involves working on everything outside of court.^[9] Put very simply, barristers tend to practise as advocates representing clients in court, whereas solicitors tend to perform the majority of their legal work in a law firm or office setting. There are, however, exceptions to this rule in both cases.^[10]

There are similarities between US and UK law which shows that we generally share the same values. The main difference comes with the fact that there are 50 states in the US and each has its own variation of the law which federal courts may not have jurisdiction over.^[11] The UK is home to 200 foreign law firms from around 40 jurisdictions – employing over 10,000 people – many of which have developed capabilities in both English law and the law of other jurisdictions.^[12] The UK has liberalised many components of the legal system, especially compared to the US. This has brought about the heavy use of alternative legal service providers (ALSPs) on a totally different landscape, including venture capital inflows in the UK.^[13] Canadian lawyers are just as behind as lawyers in other countries when it comes to adopting new legal technology software in comparison to the US. Many lawyers are tied to their traditional “if it’s not broken, don’t fix it” mindset, content with doing their jobs as they did 50 years ago.^[14]

Legal tech sector

Technology has changed the face of everything, and the law is no exception.^[15] Legal tech is the combination of the legal industry and software technologies designed to serve law firms and legal software companies with advanced solutions helping them boost the conversion rate, automate the lead generation process, and reduce costs through high automation of daily workflows.^[16] Each firm, whether UK or US, has its own culture and way of working, and these can vary widely from one firm to the next.^[17] Law firms worldwide are employing digital strategists and embracing the benefits of legal software tools.^[18] There is an explosion in both countries, but the difference is that in the UK the emphasis is on service delivery to clients, and in the US, it is on tools for traditional lawyers.^[19]

American legal departments are more likely than their U.K. counterparts to use new and innovative legal technologies, according to data from the 2018 Sharplegal report recently released by Acritas. The report states that 25 percent of legal departments in the U.K. are not using any software for law firms while only 11 percent of legal departments in the U.S. are not using any of these tools.^[20] Many lawyers have been reluctant to take advantage of the many document management systems, single application apps and other technologies that can mitigate careless errors, and tailor invoices. and expedite document preparation.^[21] Despite the alarming reports, there is cause for hope. In 2018, British law firms doubled their investment in digital solutions. ^[22] With the rise of legal tech startups in Canada, Canadian lawyers are beginning to see the real value of transaction management software technologies in their practice. As of 2016, there were 41 legal tech businesses based in Toronto alone.^[23]

Since 2017, there has been a 484% increase in the number of legal technology patents worldwide. In 2021, this number continues to increase as many law companies experience vast lead generation changes caused by the implementation of Legal tech software.^[24] In 2017, legal services provided a positive net contribution of £4.29bn to the UK balance of trade, the greatest contribution among professional services sectors in the UK.^[25]

Challenges faced by the legal industry:

The legal sector continues to reel and adapt to the forced, Covid-fuelled culture shock that has changed the way the profession works at an unprecedented speed of change.^[26] Along with almost every other profession, attorneys were forced to pack up their offices and move work into their homes. With this change, attorneys had to adjust to video meetings with clients and work with co-workers on projects without the ease of being in the same office.^[27] As the legal technology solution expands, regions are likely to learn from each other, we are likely to see momentous progress in the coming years, in light of the recent developments in technology and the wake-up call instigated by Covid-19.^[28] Many firms have recorded healthy revenue growth and the ongoing salary war in the City has pushed NQ salaries to an all-time high.^[29] With Legal tech solutions implemented in a 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.).^[30] Law industry revenue in Canada is expected to increase at an annualised rate of 2.8% to total $15.7 billion over the five years to 2021, though this includes a projected increase of 3.8% in 2021 alone as industry growth remains steady despite the economic challenges posed by the ongoing COVID-19 pandemic.^[31]

Many lawyers are still leaving the profession for a better life, with some citing low salaries as one of the major reasons for doing so. One reason is that lawyers are finding it difficult to keep up with technological changes in society and this is slowing down their careers.^[32] To retain staff law firms need to have decent legal case software and practice management software in place. Overcoming frustrations around clunky technology and disparate systems with a lack of integration can have a real impact on talent retention.^[33] To avoid falling behind, it is vital to react to technological disruptions appropriately and to implement more considerable resources for the overall application and education of legal tech.^[34]