Is Silicon Valley beginning to show signs of slowing down?
In the fall of 2019, Google told the world it had reached “quantum supremacy which was a significant scientific milestone that some compared to the first flight at Kitty Hawk – harnessing the mysterious powers of quantum mechanics, Google had built a computer that needed only three minutes and 20 seconds to perform a calculation that normal computers couldn’t complete in 10,000 years. Fast forward three years into the future and we haven’t yet got a single quantum computer that does anything practical – we will probably have to wait much longer till we come across something like that. Cars that fly or self-drive, computers that can pass as humans and advanced artificial intelligence are things of the far future. Over the last 20 years, Silicon Valley has benefited from a once-in-a-lifetime alignment of advantages – namely, American primacy, the ubiquity of cheap capital, the arrival of the smartphone (among other widely adopted tech innovations), and, perhaps most significantly, a benign regulatory environment have all conspired to create a historic concentration of wealth and power – the titans of the Valley and their heirs have been free to roam far ahead of lawmakers, watchdogs, and tax codes. But it seems like this won’t be the case much longer. With all the statistics and reports we have right now, Silicon Valley is doing much worse than you might think.
This brings us to the question – Is Silicon Valley dying? That is a little harsh but it is slowing down. After years of sky-high valuations, Silicon Valley is currently engulfed in its worst sell-off since the 2008 stock market crash. It is a time of great tech stagnation, in part due to the scandals that have rocked Silicon Valley over the last year and part of the stagnation, too, is that current technology is stalling out, and the next wave just isn’t ready yet. The past year has offered several lurid examples like WeWork, the office-sharing company that claimed it would reinvent the workplace, imploded on the brink of a public offering, and Uber, once seen as an unstoppable force that would transform urban transit as radically as the subway had, has likewise seen it’s public valuation plummet – from January to October, the two firms together lost $10 billion.
After a pandemic-fueled boom sent tech names soaring, many of those businesses have seen the worst six months of their lives as publicly traded companies – Peloton, the exercise startup, for example, is emblematic of this ominous reality: Its shares have cratered from a high of $163 at the end of 2020 to about $17 and recently, The Wall Street Journal reported company executives were looking to sell a minority stake to an outside investor. This is a major turn for the tech industry, which for more than a decade has defied gravity, continuing to expand beyond what even the industry’s biggest fans thought was possible but now, with an economy stretched by the global pandemic and jostled by war, the once largely immune tech industry may have found its match.
However, even with all these discussions and claims about Silicon Valley slowing down and – in an extreme case – crashing, if you ask the big thinkers within the industry, they still maintain that nothing of this sort is happening anytime soon. In the past few years, the biggest moneymakers of the tech industry have been smartphones, iPhones and mobile apps. Although these are complex, intricate and important technologies on their own, they are a far cry from everything we’ve been promised from Big Tech and Deep Tech. As for the next big thing, the big thinkers say, give it time – take quantum computing, Jake Taylor, who oversaw quantum computing efforts for the White House and is now chief science officer at the quantum startup Riverlane, said building a quantum computer might be the most difficult task ever undertaken which is a machine that defies the physics of everyday life. Still, the slight downturn affecting the technology industry today after the pandemic is showing no signs of turning catastrophic yet.
Legal Tech and the Silicon Valley
In recent years, the number of lawyers and technologists combining forces to develop advanced legal solutions through new startups has exploded. Investors and tech industry insiders have seen the potential of legal tech innovation for some time and in the past few years, legal tech has broken through as according to Bloomberg Law, Silicon Valley investment in legal tech grew to $1.7 billion in 2018 which is up from $233 million in 2017. This number has only gone up since.
2019 proved to be the year with new law firm decision-makers who had different expectations than previous generations of attorneys which ultimately resulted in a change in how law firms were more accepting of legal practice software in 2020. Additionally, due to the global pandemic which forced everyone to work from home, so legal support remote working tools became a necessity among law practitioners.
Legal technology or legal tech refers to the use of software, digital services and technology in the legal sector to improve the way legal services are provided to clients and this is a growing market globally, with the United States as the leading market for many new legal software companies but many other countries including China and the UK are catching up with it. The legal services industry, by and large, has no Research & Development (R&D) component as it’s not in the nature of law firms to set aside resources to pursue innovation but there is no shortage of legal R&D going on – in recent years, the number of lawyers and technologists combining forces to develop new legal technology solutions has exploded. Current legal tech companies have modelled their software for lawyers after the software we all use in our everyday lives as consumers which brings a new appreciation for User Interface (UX) and has helped raise the bar and level up the technology across the entire industry as the old UX standards for on-premise, enterprise legal software solutions are now unacceptable. Since everyone from BigLaw to solo practitioners use legal tech for help with time and billing, checking for conflicts, and case management, among other things, investor optimism seems well-placed.
Investment and innovation in legal tech is also crucial for Silicon Valley since law firms and legal startups provide them with accessible and affordable legal support. Legal practice management software for lawyers use a combination of contract automation and omnichannel support. We enable our customers to have access to basic business legal support, including company incorporation, and customizable legal templates and connect them with a curated group of specialist lawyers who work gig-economy style. With all this innovation, attorneys have also gotten very comfortable using legal tech – mainly Artificial Intelligence (AI) and law. Nowadays, most attorneys use AI solutions that help them be more profitable by shaving hours off their research and brief writing – legal software enables them to seamlessly integrate AI-powered research into their brief-writing process.