Official Partners

Menu

Technology, like most other industries, is revolutionising the way law firms operate – and understanding this is a key way to develop your commercial awareness. Whether the technology is used to piecemeal together evidence in legal cases, establish new practice areas or is implemented more practically to speed up the process of advising clients, it is undeniable that technology has sparked huge change for law firms.

Legal Tech Overview

Investment into the LegalTech industry pre-dates the pandemic – recording a growth of 6% in 2019. A $50m Series A investment for Kira Systems is a standout example. By the end of September this year, legal tech companies have now smashed their all-time high, recording a 2021 annual investment of more than $1bn from venture capitalists. One key example is JP Morgan, who launched in-house software ‘COIN’ which is able to extract 150 attributes from 12,000 commercial credit agreements and contracts in only a few seconds. This task would take 360,000 hours of legal work by lawyers and loan officers per year. This is just one of many examples, where legal technology breakthroughs can have a time-reducing function for lawyers and law firms.

That said, research by The Law Society suggests that many law firms are still risk-averse with slow implementation of these new technologies. Furthermore, many lawyers have reported that legal tech companies are providing point solutions for single issues but failing to tackle the whole ‘end-to-end’ dealmaking process. Critics of legal tech solutions often note vendor’s narrow focus as an explanation for LegalTech’s performance in comparison with FinTech. In 2019, it is estimated that global LawTech saw investment of $1bn; KPMG valued global FinTech investment at $137.5bn for the same period of time.

CTA

Never Miss Commercial Awareness Updates

Subscribe to our monthly newsletter and get the latest CA news straight to your inbox

subscribe now

Legal Tech In Day-to-Day Life

Artificial Intelligence (AI) is transforming the speed and efficacy with which lawyers are able to advise their clients. One of the main ways is through AI-powered document review platforms. These platforms are able to sift through vast volumes of paperwork to find key judgements far quicker than human capabilities. Platforms such as LawGeex and Thomson Reuters Westlaw Edge have been lauded for their ability to review documents and give predictive outcomes for disputes respectively. Through using AI-powered technology to complete due diligence, lawyers are left with more time to focus on solutions. Kira is particularly popular with UK-based law firms such as Allen & Overy, Clifford Chance and Hogan Lovells as well as with Deloitte’s in-house legal team. Another popular legal tech company is Luminance, used in over 300 law firms and organisations, in over 55 countries in more than 80 languages. Luminance argues that the software is able to understand language the way humans do but in volumes and at speeds that humans will never achieve. The technology works across a wide range of practice areas, including eDiscovery, M&A due diligence and property portfolio analysis.

Using cloud computing allows lawyers to access their practices from anywhere. The Law Society’s LawTech Adoption Research paper suggests that investing in cloud-based infrastructure gives law firms a competitive advantage and is favoured by clients. Key advantages include ‘security, accessibility for remote workers and resilience’ providing key backup and recovery services. Using cloud also allows for better collaboration across law firm practice areas and easier input from offices around the world. Currently, cloud usage amongst law firms is 58% but interestingly, smaller firms have become more reliant on it. Experts predict that the majority of law firms will rely on the cloud in the next 8-10 years.

Automated processing or RPA (robotic process automation) is arguably the most cutting-edge piece of technology currently enrolled by law firms. The ‘bot’ emulates the actions of a human for a variety of functions involved in executing a business decision. One example is automated billing with particular interest given to Clio Payments, powered by LawPay – a payment processor which has been built specifically for the legal industry. According to a 2017 Legal Trends Report, 28% of consumers surveyed look for the ability to pay via credit card when choosing a lawyer. Another RPA example is using software which automatically updates the client on any relevant developments in the law, whether that be legislation of case law. The advantages of using RPA or automated processing include cutting costs of labour and increased speed in progressing cases. A 2016 Deloitte study suggests that 114,000 jobs could be automated within 20 years.

Smart contracts have been an instrumental LegalTech breakthrough for law firms. Docusign, a digital transaction platform that lets users send, sign and manage legally binding documents securely in the cloud, won the FT Intelligent Business Legal Technology award in 2020. These smart contracts rely on blockchain technology, which has been welcomed by lawyers on account of its transparency, accessibility, data integrity and automation.

Technology & The Law: Updates

For further reading, please take a look at our commercial awareness updates that cover the topic of technology:

Loading

Loading More Content