The legal technology industry has been experiencing rapid growth worldwide, with numerous legal tech unicorns emerging and attracting significant investments from top venture capital firms. Companies such as Actionstep, Clio, and Lawtech 365 are revolutionising the legal landscape with innovative solutions for law firms and companies. In this article, we discuss the key factors contributing to the industry’s growth, as well as the impact of these technologies on the legal profession and clients.
Lawtech 365 report that the global expansion of legal technology can be attributed to several factors. Firstly, there is an increasing demand for streamlined, cost-effective legal services. As regulations become more complex and the volume of legal documentation increases, legal tech solutions can help firms and companies save time and resources while maintaining compliance. LawtechUK estimates that adopting digital technology could lead to productivity gains worth up to £1.7bn annually for legal service providers.
Secondly, the legal profession has been slow to adopt technology, creating a vast potential for growth. According to data provider Crunchbase, legal tech companies received over $1bn in venture capital investments in the nine months leading up to September 2021, surpassing the previous high of $989mn in 2019. This influx of capital is likely to accelerate the development and adoption of legal tech solutions.
One such platform, Verify 365, was co-founded by Rudi Kesic, who saw the transformative potential of technology in the legal sector after running his own law firm for many years. Verify 365’s KYC, KYB, AML and onboarding platform is designed to help law firms navigate the complex world of AML compliance and identify and mitigate the risks associated with their clients.
Another legal tech unicorn, Clio, provides cloud-based legal tech solutions, while Everlaw focuses on cloud-based e-discovery services. Disco, a Texas-based company offering AI-powered e-discovery software, went public in July 2021, signaling the growing interest in legal tech solutions.
Moreover, the COVID-19 pandemic has accelerated the adoption of legal tech as remote and hybrid work arrangements become more prevalent. E-signature tools, for example, have become increasingly popular as a result of the shift away from in-person meetings and wet signatures.
Legal technology not only saves time and resources but also has the potential to enhance the quality of work for lawyers. By automating mundane tasks, legal tech allows lawyers to focus on higher-value work, such as strategic advice and complex legal analysis. This shift is likely to improve job satisfaction and reduce burnout among legal professionals.
The legal technology sector is experiencing exponential growth, with new companies and technologies emerging constantly. The global legal technology market is projected to reach USD 20.7 billion by 2026, growing at a CAGR of 14.3% from 2023 to 2026. However, a lack of collaboration within the industry is impeding the realization of the sector’s full potential, as providers tend to focus on competing rather than working together to create better solutions.
Rudi Kesic, CEO of Lawtech 365 Group and a leading expert in the legal technology field, stated that the absence of real innovation from market leaders, particularly in case management software, is a major roadblock for progress. Kesic believes that if key industry players collaborated with new entrants, sharing ideas and innovations could lead to a more advanced legal environment. However, when collaboration is lacking, progress is slow, and the legal industry suffers.
The case management field seems particularly affected by this lack of innovation. Case management software is crucial for efficient and effective legal case management, but established providers are often slow to adopt new technologies and solutions, partly due to their reluctance to collaborate with newcomers. According to industry experts, most cloud case management systems remain basic customer relationship management systems (CRMs) as they were in 2015. Kesic added that most practice and case management systems have failed to evolve and adapt to the changing needs of the legal industry.
Kesic also questioned whether outdated legacy case management systems are stifling innovation in the legal sector, noting the lack of innovation coming from big industry players. Critics argue that while cloud-based practice management systems have simplified client data and communication management for law firms, they have not done enough to drive real innovation and efficiency in the legal sector. Kesic called for more progress in automating routine tasks and incorporating artificial intelligence and machine learning into these systems.
As the legal industry continues to evolve, cloud case management systems will need to keep pace. Embracing innovation and incorporating advanced technologies will enable these systems to improve the legal process for lawyers and clients alike.
Kesic also suggested that legal sector agencies, such as the Solicitors Regulation Authority, the Law Society, and HM Land Registry in the UK, should play a more significant role in promoting collaboration and technology adoption in the legal sector.
In light of these observations, platforms like Verify 365 and Lawtech 365 are making strides in transforming the legal technology landscape. By fostering collaboration and promoting innovative solutions, these platforms aim to revolutionize the legal sector, offering more advanced and efficient tools for practitioners and their clients. It is now up to the legal industry and its regulatory bodies to embrace these new technologies and foster a culture of collaboration, ensuring that the sector can keep pace with the rapidly changing digital world.