Legatech is no longer sci-fi
As predicted by Richard Susskind, technological innovation is revolutionizing the delivery of legal services. The frenzied pace of innovation is increasing diffusion of knowledge, and in turn, legal solutions available to citizens are multiplying. For the first time in human history, the world-stage has become our legal laboratory. While we can’t know what lies ahead in our distant future, we can be certain of one thing, access to justice will become increasingly universal.
On the immediate horizon, we can see the arrival of more efficient and less expensive legal services available in virtual form. Out of the box video communication, screen sharing software, and remote automatable procedures will mean less visits to courthouses and less one-on-one meetings with the clients [i]. In Ontario, 10% of divorces are filed online. In France, 40,0000 cases were settled online via ODR (Online Dispute Resolution) by a single company! Ebay settles 50 million cases online each year, making it the largest settlement institution in the world. The future is now, and access to justice is just around the corner.
A new way of rendering justice
Technology is also changing the face of traditional legal service. Legal documents are no longer written on blank pages. In fact, lawyers are even exempt from drafting certain documents. A wide variety of companies specializing in drafting automated legal documents have been created. The U.S. company LegalZoom offers à la carte services to its clients by allowing users to receive support for their order after being offered price estimates on different “combos”. The cost savings can be 30 to 40% less than standard services. Moreover, it is now possible to submit motions and judicial procedures online at a fraction of the usual cost. According to a recent study by the MIT School of Business, 20 to 40% of jobs in the service industry could be automated [ii]. Legal innovation is no longer science fiction, it’s already arrived.
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In Canada, legal tech companies are popping up everywhere.
University of Montreal and its Cyberjustice Laboratory have developed an online mediation scheme. BidSettle.com is working on an online civil tribunal powered by blockchain. The largest provider of divorces in Ontario is a online website. Testaments can now be automatically generated online in a matter of minutes. Technology is changing the way justice is delivered, and new tech solutions have the potential to offer a greater amount of justice at a lower cost.
New offers, new services
Technological tools allow in-house lawyers to do much of their work internally. These tools decrease in cost and increase in utility. Small and medium sized companies are developing their in-house legal departments to drive down the cost of legal services. In a related phenomenon, it is not uncommon for large firms to relegate attorneys to a client’s office to perform the work on site.
Greater mobility of legal work
Technology also allows lawyers greater mobility in their work. Tablets and smart phones enable work outside the office. Freedom to work outside the office can lower labor costs from 3 to 13% [iii]. Moreover, these practices increase productivity. 14% of employees at Eversheds, a law firm based in England, have increased their number of billable hours thanks to their innovative working models [iv].
Mobility and improved access to information also decreases emphasis on legal branding. More lawyers will be working remotely. Open source legal work networks will filter demand and provide quality lawyers at a lower overhead.
Legaltech: threat or opportunity?
The challenges of this new market are not to be taken lightly. Inevitable growth in the number of self-employed lawyers will lead to a reduction in job security as attorney’s enter the increasingly common “gig economy“. Traditional, repetitive billable services will be increasingly viewed as automatable, and therefore of low value in and of themselves. Lawyers will have to find new ways to be useful to their clients.
But the opportunity is genuine. Legaltech will enable greater independence and autonomy for lawyers, which in turn dismantles traditional barriers to starting a business. From 2008 to 2013, self-employment and contractual work, rose 50 % in the U.S. The legal industry also saw a boom in entrepreneurship, with hundreds of millions of dollars invested in legaltech start-ups every year [vi]. Natural Language Processing, AI powerhouse Ross Intelligence, a legal startup devoted to disrupting the field of legal research, recently announced a Series A investment of 8.7 million.1.
A difficult-to-swallow reality for many is that a business built around technology cannot be focused on the almighty billable hour. It must be focused on utility. This is the focus that improves practices and reduces costs for the average citizen. Legaltech is all about volume: volume of services provided, and most importantly the volume justice distributed.
The potential benefit to both lawyer and citizen is profound. There are 22 billions in unserviced legal claims in Canada alone! But to tend to this market, lawyers must innovate. They must use technology to solve long standing, unresolved problems at the core of the legal industry. If they succeed, the reward will vastly exceed losses associated with antiquated and inadequate models of the past. In the future to come, the Legaltech movement will win. Are you on board ?
By Alexander Désy and Sebastian Alovisi
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[i] TOJ project – http://www.justice.gouv.qc.ca/francais/publications/administ/pdf/rap1213.pdf
[ii] How Technology Is Destroying Jobs | MIT Technology Review Online: about: reader? url = http%3A%2F%2Fwww.technologyreview.com%2Ffeaturedstory%2F515926%2Fhow-technology-is-destroying-jobs%2F.
[iii] Jordan Furlong, The New World of Legal Work: The Changing Rules of the 21st Century, Lawyers On Demand (LOD), 2014 on p. 10.
[v] Ibid, on p. 14.