How Legaltech Startups are Revolutionizing the Legal Services Industry
Law firms, not typically associated with the fast-paced world of tech startups, are waking up to the value of being closer to the action.
Author: Guillermo Miranda, winner of IE Law School´s Global Legaltech Venture Day and Co-Founder and Legal Director of Lucius Report.
There’s no denying that technology has flooded business across the board, and the legal services industry is no exception. The sector now faces the task of implementing legaltech into its practices, both in large law firms and startups, in order to stay ahead of the curve.
To preface this text, we should note that legaltech has achieved different levels of development and relevance, depending on the country or region in question. For example, the Mexican legaltech ecosystem is at a very early stage and is beginning to bloom with new startups and services entering the market. So, though this article focuses on the relevance of legaltech for the future of law providers, the reader must acknowledge the regional differences that should be taken into account.
The US and Europe have two of the busiest and most advanced legaltech industries in the world, with around a thousand startups registered in important directories, such as the “Techindex” of Codex, the Stanford Center for Legal Informatics.
Moving away from tradition
Traditional lawyers and law firms face quite a big challenge in the market, but the real question at hand relates to the impact that entrepreneurs will have on how these services are provided today. This question needs to be tackled from a variety of perspectives. One perspective, and possibly the most important, involves how lawyers work and what their office environment is like. For example, I personally left my “traditional” job in a large American law firm in Mexico City, partly due to the demanding working hours and late nights.
In response to this, fresh startups have begun attracting top emerging talent merely because they can offer something that the large firms have not: flexibility. This effect will gradually become visible within the human resources departments of traditional law firms as young, talented, and recently graduated lawyers pursue entrepreneurial paths and jobs in legal startups.
How legaltech can change the legal sector for the better
Flexibility at work can be a hard pill to swallow for traditional industries — especially for the legal industry, which in my opinion, is reluctant to change and evolve. Workplace revolution in other industries is the new norm as we are seeing significant developments in working practices, such as game lounges and remote workdays.
One of the significant changes lawyers must adapt to and be comfortable with is changing their employees’ work processes to retain talent, increase employee engagement and ensure a high level of work, leading to happier and more motivated employees who are satisfied with their daily tasks and their healthy work-life balance.
Startups will begin to attract top and emerging talent merely because they can offer something that the large firms cannot: flexibility.
Another major change that legaltech will help overcome is the transparency and efficiency of a firm’s spending and billing. In recent years, clients have been more thorough with their billing and spending on legal (and other) services, resulting in a need to be more transparent and efficient. As the global economy continues developing, a more flexible scheme is required. I might even dare to suggest that the 500-dollar hours billed for legal work will soon be replaced with the schemes previously mentioned. In this case, entrepreneurs and startups understand the client and the changes in the market at a much faster pace than traditional providers.
In terms of technology, one of the primary effects and purposes of the legaltech industry is to introduce a heavier tech component into the legal practice, consequently changing the way lawyers do things. It is necessary to understand whether these changes or implementations will cause true disruption to the industry or simply a small boost in the time taken to deliver work to clients. I think the role of artificial intelligence and machine learning is hefty in certain practices of law, yet law firms are still reluctant to test it and use it in their daily work.
These technologies will help revolutionize the legal landscape as we know it and develop areas such as e-discovery in litigation, automated and intelligent due diligence processes in compliance and M&A, and smart contracts. These three examples, which cannot be addressed in the same manner, represent different perspectives towards future innovations within the legal field. The first two touch upon tools already used in legal processes and the third is not only a new element in the market, but possibly a new threat for some lawyers.
From startups to big-shot law firms
Given my experience in this area, the first step that a legal startup should take is to position itself in the market as a tool, not a competitor. We, as entrepreneurs, must aim to develop new technology and processes to make it easier for lawyers to fulfill their clients’ needs. Positioning yourself as an aid and tool first, will provide an opportunity to test the market with real clients. If your service is successful and receives support from ranked legal advisors, you can start scaling up your startup and simultaneously keep developing new products and technology. This is very important to keep in mind when building a startup in the legaltech industry; it’s a key element to success.
It is also important to notice the likelihood of disruption taking place in all the areas of law. Today we are seeing the most disruptive changes in litigation, specifically with common law jurisdictions and M&A and contracts in continental law.
Should we consider legaltech as the new rein holder of legal services or does it simply stem from a small group of individuals boasting their success? We must keep this in mind during the coming years as we are far from having a suitable answer.
The influential force of legaltech
Legaltech is undeniably a desired element breaking into the legal sphere, which plays an essential role in a world dominated by large firms that will eventually have to offer their support and use their technology to improve the delivery of legal services. It is not a competition, it is a team game. A game we must all support for the sake of our clients and the future success of the industry.
Artículo extraído de la fuente : https://lawahead.ie.edu/how-legaltech-is-revolutionizing-the-legal-services-industry/