LEGALTECH is shaping tomorrow…

Will Corona trigger the reshaping of how we provide legal services?

The future is famously hard to predict, but 2019 was a busy year for legaltech. That’s true even if we’re still waiting for legaltech to breakthrough into general adoption. Lawyers are a cautious bunch and not technological first movers. Their caution, however, does not mean the market or the clients are as cautious or as patient.

Events like Corona may just be the tipping point.

The headlines

Robots/automation: More and more non-traditional providers now serve customers that lawyers can’t afford to serve, like consumers trying to get compensated for late luggage. Look no further than donotpay.com for proof that this is growing and diversifying to other services. The startups offering digital GDPR solutions began to transition into consent management services and are diversifying into other services.

Legal ops: The move to legal ops amongst corporates is growing. How corporates look at what they buy and how much they pay is changing. The resulting pressure to provide more legal for less may drive process change and tech adoption both in-house and a law firms.

AI: The jury is still out. Many law firms have experimented with AI services like Luminance, but the market seems to be waiting for something to force mass adoption. It does not seem to be a ‘must have’. This may be because we tend to try to fit new technology into our current way of working. It takes time to takes time to accept the changes new tools bring to how we work, even when they improve our results.

The Accounting Big Four: The global accounting giants opened more law firms across the Nordics in 2019 bringing the scale of their multinational solutions. Deloitte, PwC, EY and KPMG serve almost every major company in the region and now they are in position to offer those companies legal services as well. The reaction from the legal industry seemed limited to commenting on the regulatory admissibility of this instead of the potential effect on the market for legal services.

What happened in LegalTech 2019? and have we agreed on what legaltech is?

A clear sign that legaltech is still new is that it remains ill-defined. At Think, we include regtech and compliance tech, but some contest the point and even maintain that there is a difference between lawtech and legaltech.

We think the focus should be using the technology and iterating to make it better. Arguing about the finer points of the definitions does not help drive the much-needed adoption of technology.

Our preferred definition of legaltech includes the use of digital solutions and software in regulated practice management, document storage, contracts, accounting services, and electronic compliance. We use Stanford University’s nomenclature of the many types of legaltech for our database, because Stanford is a leader in the field. Depending on how that works, we’ll adjust as necessary.

It is clear that compliance and document automation attracted the largest number of providers. In 2020, we think the tech providers will consider combining these two types of solutions to service the growing demand for compliant document automation.

The question is then, will we see more platforms providing a combination of the different solution types, and will one solution dominate, if it solves most needs with an all-in-one solution? Or will the profileration of niche expert solutions continue?

So what are the current trends in legal tech?

There are four trends we think are worth noticing.

  1. “Customer-centric” Some estimates say 70–80% of the need for legal services is unmet by law firms. Ignored or under-served customers are being served by non-traditional providers. The legal industry ignores many customer needs, because the current processes are too manual to allow them to make money serving these customers. Challengers like dontpay.com provide an alternative with a cheap delivery model based on software. They also have a simple monthly subscription business model, and, because their service is largely delivered by software, their services are scalable. Watch for them to expand their offerings beyond small claims. Also, watch for law firms to rearrange their offerings around the customer needs vs. how the service is provided. Fixed-price agreements were just the beginning. Watch for dashboards showing the status of ongoing work, fees, expected completion times, and more.
  2. GDPR automation plus: The first wave of GDPR compliance providers are evolving into consent management services. Some are looking at other regulations like KYC, whose compliance can be automated. These firms are digital first and may be able to scale these solutions very quickly. Watch for them to expand their offerings to legal departments and law firms as well directly to sales and marketing.
  3. Adoption: There is a debate about customization vs. standardization. The current big law verdict on many legaltech solutions is that they “don’t do what we need them to do”and need customizing to match the internal processes at the individual firms. Again, this just may represent where the industry is in technology adoption. The first automobiles looked like carriages, because that is what they replaced. Watch for the firms that talk about how they are leveraging these tools to provide new services, more value, and lower prices. The clients may have a say here — like they do in every other aspect of their business.
  4. The Big Four: The global accounting giants now offer legal services in the Nordics. These may not be full service law firms as we know them, but they represent a significant challenge. The Big Four’s customers already trust them to manage their accounting and give them business advice. What is to stop that trust extending to legal services? Especially when those services include technology developed and tested internationally and supported by thousands of experienced staff overseas? Watch for this to change how legal services are bought and delivered — and in the capital structures and business models of the providers.

In conclusion, 2019 was a busy year for legaltech, and current events trigger a break with the caution and conservatism holding back widespread legaltech adoption. Lawyers are not technological first movers, but they do listen to their clients. Corona might just push clients and colleagues to demand the innovation and technology adoption that has been ready for so long.

We brings legaltech, regtech, and compliance out of its narrow niche and into its proper context with the rest of industry and society. Join an ecosystem that strengthens your company with a complete service toolbox of knowledge and personal connections. To become part of the community, go to thinklegaltech.com

Your platform for digital innovation and legaltech solutions. #legaltech #regtech #compliance # digitization