Digital transformation, Industry 4.0, Technology Revolution. These terms, and many more, are all designed to encapsulate the rapid advancement of technology and automation within business today.

Law firms are under the same pressure as other sectors to keep up with the ever increasing advancements in technology. Lawyers are tasked with providing cost effective, timely, quality services whilst keeping overheads down. Competition in this field has always been fierce, and now innovative firms are looking to legal technologies to help them get ahead of the game. This article will look at the need for tech innovation within the legal sector, the ways young firms are disrupting the space, and how traditional firms can and should be keeping up.

In fifteen to twenty years time, the legal landscape will look very different. Big statement? Set your mind back ten years. The UK was in the aftermath of a brutal economic crisis, and the market was saturated with legal graduates. Law firms made a tactical change to their hiring approach and reduced the number of Training Contract (TC) offers in favour of paralegals. It made complete sense, because firms had been hiring grads and paying TC salaries for years, tasking thirsty trainees with monotonous jobs like photocopying and proof reading. As a result, instead of armies of trainee solicitors, firms had rooms full of paralegals who were paid a fraction of the salary. Each team of paralegals requiring only one trained senior lawyer to sign off the completed work.

With the increasing adoption of technology, and its subsequent increase in sophistication, ease of use, and reduction in cost, the natural progression is for the ‘factory line’ work to be completed not by paralegals, but by machines. Technological innovation in the legal sector is understandably more onerous than most. Traditional, large firms have a range of technology in place, across multiple sites, often working on a variety of systems. Speaking to a top 100 firm recently, I learned that their biggest task was simply to get all employees working on the same system and ensure staff knew how to use that system correctly, in the knowledge that ‘innovation is coming’. Large firms’ often archaic infrastructure makes innovation increasingly difficult to adopt. Although the legal field is notorious for moving at a glacial pace, the sector is starting to understand that technological disruption is inevitable, and lawyers need to start preparing.

I recently sat down with commercial tech lawyer from Ward Hadaway, Gareth Yates. When asked his thoughts on the future of legal services for traditional firms, he responded;

“Technology within law firms will transition from focusing on technology as only being a ‘backroom’ resource, e.g. to enable remote working, case management and human document production, to a ‘frontroom’ resource driving new working practices and differentiation from competitors, e.g. AI driving new client engagement processes, speeding up due diligence activities and automatically generating documentation.”

The client of the future wants speed, efficiency, accuracy and value. Consumers are more demanding than ever before, and with the increasing number of firms to choose from, those that tick the above boxes will reap the rewards. One of the most effective way to tick the boxes? Technology.

Put tech after anything these days and you have a sector; EdTech, MarTech, FinTech; we could go on. The LawTech sector is no different and has gained a large amount of interest in recent years. It consists of legal delivery through technology and the supply chain that develop that technology. Many things a law firm does, from conveyancing to mergers and acquisitions, are repeatable processes. There are already systems available that can draft documents, complete legal research, perform due diligence and resolve online disputes. These systems are ripe for disruption, and understanding how to optimise and improve them will be key to the survival of the traditional firms. Most lawyers I speak with plan to be ‘fast followers’ when it comes to innovation through tech. Whilst this is perhaps a safe approach for large, established firms, the disruption is already taking place, so those denoting themselves as fast followers should be thinking about their adoption pathway imminently.

As previously mentioned, it is often the archaic infrastructure that is stalling innovation within the sector. Young, agile firms do not seem to have this problem. Take Leeds based, award winning firm, Rradar. Established in the early noughties, Rradar have taken their legal excellence and channelled it into digital tools, all of which were developed in-house, to help businesses easily access necessary information faster and tackle business risks before they become a costly legal problem. Ranked in this year’s Legal 500, Rradar’s USP is their digital approach. With an increasing client base and new offices opening imminently, this is clearly a Firm on the up.

Justin Kan, an entrepreneur who sold one of his first companies to Amazon for $1bn, launched a brand new law firm in 2017.  Atrium is a full service law firm with partners and associates from a range of top practices across USA and Europe. The technology that Kan has built and implemented, offers the highest quality legal services, which are significantly faster and cheaper than their competitors. And this is all achieved by using technology to automate the majority of tasks that lawyers currently do.

The bottom line is that firms need to keep up with competition. Traditional firms may ask the question, ‘Why do we need to innovate? Surely there will always be the need for trusted traditional legal advisors’ This may well be the case, but with technology advancing at the rate it is, and digital advancements across all sectors being led by millennials and generation X’s who are more and more inclined to interact with a screen than a human being, it begs the question, will there? If disruptive LawTech firms can offer the same quality service at a fraction of the cost, faster, and without Gen X having to leave the office, will there be a space for the traditional law firms to occupy?

The technology that Justin Kan implemented into award-winning startup Atrium, was designed, tested and implemented through its sister company Atrium LTS. Development house and law firm sat alongside each other to create a firm that has received over $65m in funding, and is seen as the future of the industry in Silicon Valley. The partnership helped lawyers to see the legal services market through a different lens, to have input on forward-thinking technological advancements that will benefit clients and individuals of the future.

How the practice of law can be developed to better serve the public is the underlying question here, rather than the important but relatively narrow issue of how young lawyers find their dream career. As the sector continues to embrace innovation and disruptive technologies advance, it will be the lawyers who appreciate all elements of law and technology that will thrive.

In his recent second edition of Tomorrow’s Lawyer, Richard Susskind analyses the variety of areas in which technology will disrupt the sector. He touches on elements of automation, web-based services, online dispute resolution, and artificial intelligence; concluding that lawyers will be pressed to either use their expertise for designing tomorrow’s legal machines, or do the jobs where human involvement comes at a premium.

In order to prepare for the future disruption within the sector, it is worth knowing what options are available to businesses. Here at Leeds Beckett University, we run a LawTech project where we can assist firms with innovation. The project centres around a Knowledge Transfer Partnership (KTP), which is part funded by Innovate UK. A KTP is a three way partnership between a company that is looking to innovate, Leeds Beckett University, and an associate. The associate is a recent post graduate in a discipline required for the innovation project. They are embedded into your business and, with the research and cutting edge knowledge and technology from the University, they complete a 2 year stint resulting in a tangible and commercial product that will positively impact your growth. From the KTP projects taking place in 2018/2019, there has been a £1.7bn added value to the economy.

Professor of Computer Science at Leeds Beckett, Hissam Tawfik, says about the importance of KTPs

“A Knowledge Transfer Partnership is an ideal scheme for a legal organisation to benefit from a skilled researcher, as well as specialist academic expertise and supervision. The partnership allows organisations to develop and optimise their legal services using Computer and AI Technology in ways which would not be possible otherwise, resulting in improved productivity and competitive-ness.”

If you work in the legal sector, or indeed any sector, and are looking at an innovative project that will improve processes and subsequently economic growth, please do get in touch with me directly. I would be very happy to discuss innovation opportunities further.

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