adminAfter years of being behind the pace on technology, the legal profession is catching up. According to a 2018 survey of law firms by PwC, the 10 largest firms with headquarters in the UK all say that technology is the most significant challenge facing the industry in 2019-2020.
The priority being given to technology is the result of clients demanding more services for less money, the encroachment into legal affairs by the Big Four accountancy firms and competition from nimble providers offering alternative legal services.
Lawyers now recognise that the sector has to change, and fast, but the problem now is too much technology.
“There’s been an explosion of innovation in this sector in the past three or four years,” says Paul Greenwood, chief information officer at Clifford Chance, a magic circle (top five) London law firm.
“Previously we were dealing with a relatively small group of medium to large providers of specialist legal software. What we face is a constellation of small providers.”
The size of the sector is hard to pin down — a list compiled by Stanford University features nearly 1 250 legal technology companies, while a start-up map put together by Legal Geek, which runs lawtech events, includes more than 250 from across Europe. It is clear, however, that the growth in legal technology start-ups has accelerated after years of lagging behind other specialist technology in areas such as fintech.
Legal Geek’s tracker shows 25 start-ups offering legal documents as a service, 11 that do document automation and 15 that provide a legal services marketplace.
Firms face a tyranny of choice. A report this month by the UK Law Society found that while “there has been an increase in the number of firms offering lawtech products in recent years . . . that rise has not been matched by the rate of take-up by legal practitioners”.
Karen Lockhart, director of business and practice systems for US firm Baker Botts, says: “One of our biggest challenges has been finding the right tools for our lawyers and for our business users.”
Another challenge, she says, is “being agile enough to keep them up to date”.
It is not just the overwhelming number of providers of services — from document management to e-discovery tools and online dispute resolution — that causes problems for firms: lawyers also face a specific challenge because of the sensitivity of the data they handle.
While innovation has been cloud-based, some clients, particularly in financial services, have objected to their data being transferred to lawtech providers in the cloud without express consent. That has slowed adoption by firms, says Mr Greenwood.
Another hindrance is the patchwork nature of the providers, with different legal tech apps often unable to be used with each other and clients’ data having to be uploaded to separate systems.
Some of the legal technology industry’s most established companies are trying to solve this problem by creating specialist platforms designed to make it easier to integrate a variety of lawtech apps.
Thomson Reuters’ acquisition in July of HighQ, one of the highest-profile UK lawtech companies, formed part of a push by the global data group to develop a single mooring for its portfolio of legal offerings.
Separately, iManage’s product has expanded from document and email management to offer a cloud-based platform with services including automated document reviews and security and governance products.
Meanwhile, US company Intapp has evolved from being a time-recording service. It bills itself as “the industry cloud for professional and financial services”.
“Firms see the need to modernise,” says Jose Lazares, who works on product strategy and business management at Intapp.
“Many are testing AI and other solutions on the business of law but a lot of those technologies were built for other industries,” he says.
Intapp, HighQ and iManage have been developing legal technology for nearly two decades and their products are well-known.
Another ambitious attempt to create a legal tech platform has come from Reynen Court, a start-up backed by a consortium of the world’s largest law firms, including Latham & Watkins, Clifford Chance and Paul Weiss, and launched in September 2018.
The company had spent a year building an app store-style platform for law firms to access apps from within one operating system, a development designed to overcome concern about integration and avoid the need to secure overlapping cloud consents from clients. The software is still in its beta-testing phase with five companies and a full launch is set to take place in January.
Andrew Klein, Reynen Court’s founder and chief executive, warns that law firms generally are not focused on how to “handle the pace and variety of innovation”.
Moreover, he says: “The challenge for any firm is that it’s very hard to predict today what (are the) 10 most important (products) that are going to win.”
Even if platforms can reduce the number of legal technology vendors, providers reject any suggestion that there may be a single one-stop shop for all legal technology needs. — Financial Times.
Bongani Ndlovu