MICHAELMAS 2018
Articles
‘Rumble in the jungle’: Lawtech in the legal ecosystem
‘Rumble in the jungle’: Lawtech in the legal ecosystem
demonstrates a deeper understanding of how the legal industry works (avoiding the common pitfall of overusing buzzwords). The relationship between lawyers and clients is at the core of the legal industry. Before any relationship exists, the client must first find a suitable lawyer. Given the large number of lawyers available, each with their own specialities, the process of finding a lawyer is not always easy. Cue lawtech: companies like JustBeagle act as digital legal marketplaces, enabling users to compare law firms and leave reviews, much like they would on websites like TripAdvisor. The advantage to customers is that this saves time, while fixed fees pricing may lead to a ‘race to the bottom’ that will lower costs. The client-lawyer relationship itself is often also highly collaborative – clients may want to provide input on draft contracts, prospectuses, dispute resolution strategies etc. Many document management lawtech
FOR BOTH CLIENTS AND LAWYERS, LAWTECH CAN PROVIDE SIGNIFICANT ADVANTAGES.
‘RUMBLE IN THE JUNGLE’: LAWTECH IN THE LEGAL ECOSYSTEM
Elizabeth Huang “We are all connected in the great circle of life,” says Mufasa in The Lion King – not only is this a helpful piece of wisdom, it is also a golden clue in the law student’s hunt for that elusive beast, ‘commercial awareness’. Like the savannah, the legal industry can be thought of as an ecosystem comprised of various species (‘stakeholders’) who interact with each other in a range of complex ways (‘processes’). Those of you familiar with Christopher Soakes’ useful book All You Need to Know About The City will recognise this ecosystem metaphor in his descriptions of the financial markets. Disruptive legal technologies have implications for the whole ecosystem. If we want to understand lawtech’s holistic significance, we must first understand how the different components of the legal industry are interconnected.
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This article will provide a helpful tour of the legal ecosystem, examining how stakeholder and process-based analyses can improve our understanding of the roles played by emergent lawtech. Lawtech refers to the use of technology within the legal industry, typically driven by the desire to improve efficiency or reduce costs. The industry, though new, is currently growing rapidly. In 2017, investment in UK lawtech start-ups reached £16m and some start-ups, such as Neota Logic and RAVN, have reached a mature stage, with annual revenues of £5m or more.1 Lawtech applications are many, ranging from case outcome prediction and software which can draft contractual documents to social justice litigation crowdfunding and chatbots which dispense free legal advice. Lawtech
offerings can be divided into several distinct categories: legal marketplaces to connect clients and lawyers, ‘law for good’, workflow management, contracts, compliance and analytics (see Legal Geek’s helpful ‘Startup Map’).2 This division emphasises a processbased analysis of the industry – identifying the relationships at its core provides a framework for understanding the different niches occupied by lawtech. The three relationships we will be exploring are: the relationships between lawyers and clients, among legal professionals, and between lawyers and courts. We will also consider a stakeholder-based analysis of lawtech developments to illuminate why different parties are interested in lawtech. Thinking about lawtech from these two different angles provides a well-rounded analysis that
products also provide means for clients to edit and comment, reducing time spent on tedious back-and-forth with lawyers. Lawtech can also be of use when the client-lawyer relationship comes to an end. LaywerTime, for example, is a web-based billing software which aims to streamline timekeeping and invoicing. This task is rendered faster and more accurate, ideal for lawyers who want to focus on more valuable tasks. For both clients and lawyers, lawtech can provide significant advantages. That said, it is often worth thinking about how such developments affect the balance of power between various stakeholders. The trend seems to be that lawtech is shifting power towards clients, as lawyers must make their work more collaborative, and present transparent time-breakdowns. All of this means greater scrutiny by clients, which places greater pressure on lawyers to justify their working methods and fees. Lawyers might be far more interested in supporting the development of lawtech that will benefit them, e.g. workflow automation, rather than supporting technologies that actively challenge their position in the legal ecosystem. Per Incuriam’s previous lawtech coverage has already discussed the ways in which lawtech might affect legal professionals.3
Typical examples of lawtech in this area include automatic document drafting, AIsupported document analysis, and end-toend transaction management (examples include Legatics and Luminance, start-ups supported by City power players Allen & Overy and Slaughter and May). Instead of repeating ourselves, we will explore how the process-based analytical approach might be helpful here. Although complex, much of the work done by lawyers can be broken down into individual tasks. At each of these stages, we can ask how lawtech might be used to reduce the time taken to complete them, improve the accuracy of the work and increase the reliability of the conclusions reached. This approach chimes with the extremely exciting concept of ‘legal design’: the idea that we should be focusing on the human user experience within legal systems “to understand where the crucial breakdowns in the system right now exist — and to make the creative leap to define what a better system might be.”4 Learning to think in this way opens up a vast number of possibilities to lawyers and is a powerful tool we can adopt in honing our commercial awareness. British courts are also profoundly alert to the necessity of modernising and integrating new technologies. On the practical side, courts recognise the problems posed by increasing delays and chronic under-resourcing. On the principled side, serious concerns have been voiced about the implications of austerity for access to justice, which in turn threatens the courts’ legitimacy. The courts are adopting lawtech by dealing with simple offences or disputes through automated decision-treebased judgments, switching to paperless trials through the Digital Case System, and implementing cloud-based services for the judiciary.5 More radical proposals also suggest the possibility of using lawtech to assist in judicial decision-making (Bloomberg’s Litigation Analytics is used by lawyers to predict how different judges will respond to the case). Modernisation could save the taxpayer up to £252 million a year, making such proposals popular with government too.6
PER INCURIAM
The government is motivated by its desire to preserve the status of the UK’s worldleading legal services sector, currently worth around £24bn. In the light of uncertainties generated by Brexit, the government is unsurprisingly keen to identify other avenues through which the UK legal industry can differentiate itself. The “unprecedented institutional interest in legal tech” highlights the macroeconomic importance of lawtech and explains governmental buy-in.8 This illustrates nicely that parties may be interested in the future of lawtech for several reasons. Without a crystal ball in hand, we cannot be sure what the true extent of lawtech’s impact on the legal industry will be. One thing, however, is clear: the proliferation of lawtech will have significant consequences for all stakeholders in the legal ecosystem and could dramatically streamline the processes that currently interlink them. One last question we might ask (and legal design thinking is crucial here), is how lawtech might not just change, but radically transform the legal industry. While current lawtech products tend to suggest improvements for existing processes, there remains the possibility of paradigm shifts that could reshape the legal ecosystem – could a stakeholder group go extinct (think about the possible impact of online courts or AI-driven justice)? Could some processes be totally automated or even removed? Would this change the way we engage in legal reasoning and think about the law itself? These are enormous questions to leave you with (the sorts which Richard Susskind touches on in his thoughtprovoking book Tomorrow’s Lawyers: An Introduction to Your Future), but ones which will hopefully provide enriching food for thought, as we attempt to grasp the big picture when it comes to lawtech in the legal ecosystem. 1
‘UK lawtech start-ups – who are the movers and
shakers?’ Thomson Reuters 2-20 Sept 2018. 2
‘Legal Geek Startup Map’ Legal Geek 20 Sept
2018. 3
See: ‘Artificial intelligence doesn’t mean the end
of lawyers – at least not yet’ Elizabeth Huang 20 Sept 2018.
The government is an important stakeholder in the legal ecosystem, as its strategic decision-making has ripple effects for the whole industry. In the UK, the government has been highly proactive. Recently, the Lord Chancellor announced a new industryled governmental panel to support the development and adoption of new legal technologies. The panel is intended to work in tandem with the government’s £20 million fund to facilitate partnerships between businesses and technology researchers.7
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‘Legal Design WTF?’ Legal Geek 20 Sept 2018.
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‘Modernisation of justice through technology and
innovation’ HM Courts and Tribunal Service 20 Sept 2018. 6
‘The rise of the online courtroom’ Raconteur 20
Sept 2018. 7
‘Lord Chancellor announces new panel to boost
Law Tech industry’ Ministry of Justice 20 Sept 2018. 8
‘UK Government Increases its Support for Legal
Tech’ Artificial Lawyer 20 Sept 2018.
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