A brief history of Legal Technology
The first legal technology company can be traced back to 1982 and by the 1990s, word processing was being taken up by the legal profession in a big way, mainly in the form of document management software which then evolved to centralised databases of documents that kept track of changes and amendments.
However, as I’m sure this may come as no surprise, law firms were initially very resistant to using technology and the internet, but client demand to use email encouraged most law firms to take this up as a mode of communication from 1995 onwards. It was also during this time period that law firms started to create websites, however, there was still a lot of skepticism around whether clients would actually use a website to find a lawyer!
Interestingly, the legal industry’s uptake of technology wasn’t interrupted by the dot-com bust of 2001, primarily because of the legal industry’s resistance and lack of appetite for ‘new’ technology. However, by the early 2000s most law firms had comparable systems to their corporate clients.
2010 saw the rise of the ‘newlaw’ firm and this signalled a major increase in small to medium sized firms using legal technology to deliver legal services more efficiently and conveniently to clients.
As more law firms around the globe started to move away from the traditional billable hour model, lawyers interest in legal technology grew, and in 2015, 73% of the 148 legal tech companies that were surveyed in the 2020 Global Legal Tech Report (GLTR) were founded in this year, with the biggest number of legal tech companies being launched in 2019.
COVID, whilst tragic, has been a great motivator for the last frontline of law firms who were resistant to adopting legal technology, and now you will be hard pressed to find an Australian law firm who doesn’t use several types of legal tech today. Interestingly, stats just realised from the 2021/22 Global Legal Tech Report revealed that the net effect on the legal industry from covid has been positive, both financially and culturally for law firms.
The current state of legal technology
As outlined in the 2021/22 GLTR, there are 35 Legal Tech product categories in the global legal technology market today.
The top 3 categories are document automation (44%), legal operations (36%) and task management (30%).
The fastest rising categories of legal technology are collaboration platforms (29%) and online legal service platforms (28%), and new emerging categories of legal technology that have arisen since 2020 include online dispute resolution platforms (7%) and pricing platforms (3%).
Artificial Intelligence, Blockchain and Smart Contracts are the hottest categories in legal technology in 2022.
Overall, I’m so pleased to say that lawyers have (finally) largely moved away from being frightened of technology and harbouring a belief that technology was going to replace them, to a view that technology improves their efficiency, enables them to provide better legal services and have more trusted relationships with their clients.
Whilst women in legal technology is still grossly disproportionate to the number of women in law (53%), Australia is leading the way globally in female-founded legal tech companies, with a jump from 21% in 2020 to 29% in 2021 (stats revealed in the 2021/22 GLTR).
So how is legal technology transforming the legal industry?
The rise of legal technology (and the fear that legal robots were going to replace them) has also meant that for the first time in history, the legal industry has been disrupted, and has forced lawyers around the world to actually seriously consider what they provide and how they provide it to clients.
Legal technology has enabled law firms to move away from the traditional billable hour model and implement fixed-fees, agreed pricing or value based pricing models. Whilst this might seem like nothing more than a pricing change for some industries, this shift is quite monumental in the legal industry.
Since billable hours were introduced in the late 1970s/early 80s, lawyers have convinced themselves that they are selling ‘time’, when in reality clients are purchasing a service or output.
By shifting away from selling time to selling services, lawyers are then forced to think about how they deliver, and who they are delivering this service too, and legal technology provides the conduit for this to happen efficiently, effectively and affordably.
More lawyers are now using legal design thinking principles when they are setting up their law firms, and actually taking the time to think about client experience and CX design models. This is most prevalent in the wave of ‘virtual law firms’ that have been set up in the last couple of years, offering geographically agnostic legal services combined with tech-enabled solutions such as smart contracts, e-signing capability and video consultations.
The positive legal tech ideas changing the world for the better
Through my role as Legal Tech Editor with Idea Spies, I’m so proud to be able to shine the spotlight on positive legal technology that is changing the world for the better. I’m very proud to say that almost all legal technology companies have a ‘lawyer’ founder, and this to me demonstrates that the legal industry is taking their role as the ‘gatekeepers for justice’ seriously around the world.
Here are some examples of legal tech ‘for good’ that I’ve promoted on Idea Spies. You can search them by name on IdeaSpies https://ideaspies.com
The Launch of the Women of Australian Legal Tech - WALTA
WALTA launched on Thursday 28th April. Standing proudly as a committee under the umbrella of ALTA and supported by PEXA, WALTA has been formed with a mission to support and empower Aussie women in legaltech.
Founded by Andy O’Connor and Jack O’Donnell, JustFund was created to enable greater access to family law services. It works by paying clients’ legal fees so they can engage a lawyer without the stress of having to pay fees throughout the proceedings.
DebtForce helps small businesses recover debts efficiently, effectively and affordably. Managing claims from $500 to $100k, no upfront fees are payable and commission is only paid when a debt is actually recovered.
Founded by Sacha Steinberger, Legal Link is a NFP on a mission to remove the legal barriers that prolong families experience of poverty in the US. Partnered with over 50 community-based organisations across the California Bay Area, Legal Link train their partners to act as ’community navigators’ to their clients, providing help and support in identifying legal issues and then guidance on how to access the right legal service. They also have a free legal directory and information hub available too.
SideBrief is a single interface platform that helps international companies comply with African local standards and rules. Founded by two local lawyers, SideBrief essentially shares 'the roadmap on how to effectively expand across jurisdictions’, synchronising cross-border expansion and helping startups launch faster, more easily and more successfully in Africa.
Founded by UK trial lawyer, Stephen Dowling, TrialView is leading the way trials and hearings are run in the UK. Protected by bank grade security, the platform enables lawyers to share, review, edit and present Court documents, as well as enable document led hearings to be conducted remotely.
GoodLawyer is a Canadian based legal tech company that connects startup founders and business owners to sole practitioners and micro/boutique law firms that specialise in corporate and commercial law.
So why do positive legal technology companies matter?
With the legal profession becoming more accessible to the 70-80% of people who have legal needs but don’t access legal services, and the launch of more positive, legal tech solutions, more people are able to access justice than ever before. More disputes are being resolved outside of the court system and justice is being dispensed more efficiently and effectively by courts and tribunals around the world.
For the legal industry, the shift away from the billable hour is creating a more healthier and more mentally well profession, and the implementation of legal tech solutions, means that lawyers have more time to focus on client service delivery and provide greater access to justice to more people around the world.
•Idea Spies –www.ideaspies.com
•Australian Legal Technology Association – www.alta.law
•Women of Australian Legal Technology Association (WALTA) – www.alta.law/walta/
•2020 and 2021/22 Global Legal Technology Report (GLTR) – www.alta.law/reports/
by Karen Finch
CEO Legally Yours and LegalTech Editor IdeaSpies
Legal Tech ideas shared by IdeaSpies