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  • Writer's pictureJaap Bosman

Your Legal-Tech priorities!

For my working life, I use LinkedIn a lot. Not only do I post articles, I also read articles posted by others. As far as the legal industry is concerned posts on legal technology seem to dominate LinkedIn. It seems as if thousands of lawyers are participating in hackathons, working on block chain or are working on developing AI based legal technology. I am aware that LinkedIn is not representative for all lawyers, but judging from what lawyers post, like and comment, legal technology seems more important than actual legal topics or real world client interaction.

In a way Legal Tech is like teenage sex: everyone is talking about is and everyone thinks everyone else is doing it. We have witnessed several law firm partner meetings where one of the partners states with much aplomb that the competing law firm down the street is using all sorts of fancy technology, so why is his firm lagging so much behind. Much of the investment law firms do in Legal Tech is driven by the fear of losing out. Often the relationship between lawyers and Legal Tech reminds me of the well known French cartoon Les Lapins Crètin (Rabid Invasion in English). Partners running around very excited, but without a clue.

So what are the current legal technologies? In 2016 we have done an inventory of legal technology and we found around 1200 companies producing and selling software and technology in the legal sector. One year later this number had risen to 1600. Today it will probably be close to 2000 products and companies aspiring to conquer the legal sector. While it is impossible to list and describe every single one of these 2000 products, we have made the graph below that divides the market into 10 main categories that can again be divided into 24 sub sections. I expect the graph to further speak for itself.

Please be aware that among the 2000 companies most are ‘hopefuls’ that try to strike gold through developing a product for the legal market. History teaches us that 85% of the Legal Tech companies storming the legal market today, will have ceased to exist in about 5-years’ time.

Recently I have been part of a jury for a Legal Tech Award. During such a process one cannot help noticing how much competition there is. Just for GDPR there were over 25 entries that all looked similar yet claimed to be unique. The vast majority of Legal Tech is on venture capital. They desperately need you as a client in order to further develop their product and in order to get more funding. Fake it till you make it as they say in Silicon Valley. Much of the Legal Tech sadly falls into this category.

What problem are you going to fix and how will you monetize the investment?

We recommend for any law firm to have a clear strategy as it comes to investing in Legal Tech. This strategy should at least describe the problem you want to solve and calculate how the firm is going to monetize the investment. Surprisingly, this elementary step is often skipped, and law firms embark on a Legal Tech adventure into the unknown without a clear view on how the project will contribute to the bottom-line results. Lawyers are lawyers, are pressed for time and fully occupied by their clients. In general, there is little interest to dive deep into Legal Tech. Partner groups decide on a ‘gut feeling’ that investing in Legal Tech is the right thing to do.

Please be aware that I am not saying that law firms should not invest in Legal Tech. On the contrary, I think it is essential to invest in technology. The core message here is that there needs to be a vision and a strategy first. The most obvious reason to invest in Legal Tech is the fact that the distinction between Creation and Production as the two parts of the legal process [Read More Here] [And Here] will inevitably put increasing pressure on Production to be done in a more efficient manner. If today an associate needs 3 days to complete an agreement, in the near future the same work by the same associate needs to be completed in just one day.

It is still the same human being that is in full control of the content, it will just need to take less time. Legal Tech is needed to make this possible. Increasing efficiency should be one of the prime areas of Legal Technology. Make no mistake, I am not saying that the computer is going to replace the lawyer. The work of a lawyer will not be reduced to ‘just pushing the button’. The lawyer will need to remain in full control. The same task will just take less time to complete. This is not unlike writing letters, which was once done by dictating a memo which the secretary would then type and hand back for review before being put in the post. A method which was very time consuming. Today the same letter would be typed directly in Word and send by email. This takes only a fraction of the time and is far more efficient while the content (the product of intellectual labor) remains unchanged.

If lawyers become more efficient, you will either need less lawyers or more work.

If we look at the Venture Capital investments into Legal Tech, most investment is made into products that can help enhance the efficiency of lawyers (both external and in-house). E-discovery is a great example: humans are now augmented by technology and the whole process today takes only a fraction of the time is used to take when all was done by hand. Substantially less lawyer time needed to complete the same task at the same or better quality.

There are two more areas that I think are worth highlighting in this article: Cyber Security and Data Analytics. For lawyers, cyber security should be paramount. Not only is confidentiality part of the core business, the primary process is also totally reliant on data that is digitally stored. We have seen crypto lockers cripple law firms as no lawyer could access any files. So please take your cyber security very serious!

The second area would be data analytics. As you could have guessed from the title of my new book, data analytics will reshape the business of law. This will be done by identifying and eliminating inefficiencies in the process, but also as part of a movement towards Prevention and Prediction which will be the topic of one of the upcoming articles. We see great opportunities for law firms that will take the lead in this area. Today we are already working on this with some of our clients.


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