Technology has long since passed being a ‘nice to have’ but is a core foundation of any business operation, with the legal sector being no exception. The founder of Apple, Steve Jobs, said, “Innovation distinguishes between a leader and a follower.” As solutions to longstanding problems increasingly transform how modern businesses operate, the fine line between leading and following has the potential to widen in a legal sector riding a wave of innovation.
Though no new phenomenon, legal tech is undoubtedly trending, putting the sector at an evolutionary crossroads as a result. As legal start-ups begin to bear fruit for a new generation of providers, the capabilities of ‘Lawtech’ is shifting thinking within industry. Law firms can no longer rely solely on market reputation or length of service as the defining features of their offering. Artificial Intelligence (AI) technologies affording both efficiency and accuracy in an economy of scale, at a time of political uncertainty affecting UK markets, are altering the balance. Though the robots have not taken over quite yet, what is clear is that legal tech is here to stay.
But what are the Driving Factors in this Shift towards Lawtech?
Client expectations. To continue to be an attractive prospect, businesses of all types must evolve. Market forces are determining that firms be as dynamic and forward thinking as those they act for, where failure to do so puts them at risk as margins shorten and competition increases. For law firms acting for those market leaders defining technological change within their own industries, the bar of expectation is set higher in an ever-competitive legal marketplace. Access to technology is therefore progressively becoming a differentiating factor for instructing businesses seeking:
• More sophisticated, bespoke, high-volume services;
• Return on investment from more competitive pricing models;
• Alignment with aims and objectives facilitated by low-risk methods; and
• A ‘Help me solve my business problems’ position
Clients are not after tech for tech’s sake, they are seeking solutions by more effective means. Firms must actively invest in future technology as a result, but also in employees capable of deploying AI in a specialist manner. For traditional providers, with long-established structuring, teams may need realigning to ensure innovative resources can be utilised at their maximum.
Clients are not after tech for tech’s sake, they are seeking solutions by more effective means
However, change is also being driven from within. Firms are increasingly pursuing outside-investment models and joint ventures to incubate and generate innovation. At Gowling WLG, we have recently announced a new venture with AI solutions company, Avail, to market jointly created Real Estate Due Diligence products and further bespoke tech solutions. Other firms are also increasingly driving development at home, putting innovation at the forefront of operations to remain competitive in a new tech-enabled age of legal services.
So How is Law Deploying These Solutions?
The sector has only scratched the surface of AI’s full potential, however it is revolutionising the client service model across:
1. Legal research and document review: AI is forming case strategy via analysis of learned algorithms at high-speed to unearth the latest legislative developments, offering up-to-the-minute insights. Similarly, utilising pattern-recognition software like Luminance AI and Leverton firms can manage corporate documentation efficiently, accessing structured data streams with pinpoint accuracy.
2. Due diligence and contract analysis: explicitly necessary but often time-consuming, trained AI is using machine learning to speed up processes. Bespoke contracts are assembled with ease, and missing clauses within existing documentation found, reducing contract risk whilst improving client expenditure and labour cost savings for firms.
3. Chatbots and DIY law: alternative business structures offer easy-to-use legal products, providing clients with the option to handle certain facets of legal work internally with total autonomy.
4. Recruitment: interactive, user-driven ‘Gamification’ software initiatives are unearthing data-led insights for talent selection, upwardly affecting recruitment diversity and increasing retention by identifying better-fit candidates without bias.
For a profession reluctant to use email during the dot-com boom, the tides are certainly changing. Tech capabilities are being grasped promoting transformation, improving business agility, revolutionising labour-intensive tasks, allowing for more fluid, agile labour forces.
So is the Human Role at Threat?
Legal market perceptions of AI are upwardly mobile; however, there is still scepticism from some quarters, fearing tech may be double-edged sword, making the human role obsolete. Decision makers within the sector must remember technology is a facilitator for overall productivity and competitiveness, which can only be maximised in combination with human expertise and thinking. Technology, when leveraged correctly by humans, affords a more complete offering. Lawyers therefore remain fundamentally important to legal advisory services, as part of a more augmented future.
Ultimately, businesses still derive confidence from face-to-face. Albert Einstein suggested, ”The true sign of intelligence is not knowledge but imagination. “Where technology increasingly has the learned knowledge to go beyond the bounds of human capability, there can be no substitute for human creativity. He also said, “We cannot solve our problems with the same thinking we used when we created them.” For the sector, what is clear is that as clients evolve, the modern law firm must equally innovate, moving away from the traditional paradigm to embrace technological change. This capacity to adopt the advantages of tech disruption and incorporate developments into the legal business model will determine successful firms of the future. Law firms failing to do so may risk falling behind the curve, as ‘followers’ rather than ‘leaders’.