The legal service industry continues to innovate as new technology evolves. Legal technology (LegTech) solutions are projected to replace traditional legal practice. In 2018, legal technology generated over $1 billion of investment, reaching a growth rate of 713%. This massive investment makes legal technology among the most promising sectors in the tech industry. Artificial intelligence (AI) has become the top growing legal solution for tech companies and is employed in areas such as predictive analytics, machine learning, blockchain, smart contracts, and natural language processing.
Legal professionals and legal organizations in the US and Europe have acknowledged that technology will play a significant role in how they deliver service in the future. Legal technology leverages legal data and analytics to improve the accuracy of decision-making processes. Various companies in legal technology continue to develop platforms such as electronic discovery, cloud computing, analytics, technology-assisted review, legal strategy, counsel selection, and tools for preparing both arguments and pleading. Startup companies such as Exterro, Atrium, UnitedLex, Kira System, Seal Software, Everlaw achieved notable investments in 2018.
Legal technology has stoked fears that automation will substitute for the function of legal practitioners. Even though these technologies will profoundly alter legal services, they will not replace the role of lawyers. Such technology aims to make legal practitioners’ life easier and optimize the judicial functions. LegTech will only change how legal professionals perform tasks, promote greater access to legal service, and provide broader service options. Law firms and corporate legal departments are starting to invest in a variety of new legal technologies to automate compliance work and promote efficiency. For instance, AI enables legal practitioners to conduct various legal tasks such as discovery, research, and contract assessment more accurately. Used correctly, technology will help to protect business and build trust with clients.
This year, New York City hosted the world’s largest legal technology event called Global Legal Hackathon on May 4, 2019. This event brought together law schools, law firms, in-house departments, legal technology companies, governments, and legal service providers across the globe to catalyze innovation in the legal industry. The program gathered over 6000 innovators from 24 countries to pitch their ideas regarding technology-based legal solutions.
Academics from numerous law schools are also developing plans to support legal technology. For instance, Northwestern University’s Pritzker School of Law engages in numerous collaborations to solve problems of legal processes and build technology products that make law more efficient and accessible and help shape legal technologies before they emerge in society with unintended consequences. It is important that legal professionals learn to collaborate across a spectrum of disciplines, nationalities, and legal backgrounds to create technology that can make the legal system more inclusive and accessible.
Knowing that legal tech will play a vital role in the future of the legal market, law firms in the US and UK are strong advocates of innovation in the legal industry. Firms have begun investing in legal solution utilizing AI-focused technologies. Firms are also competing to integrate AI with practiced expertise so as to lower business costs, mitigate risks, and aid lawyers in performing higher margin workloads.
It is becoming clear that the use of legal technology to achieve better service outcomes and offer higher value is not only increasing rapidly, but also delivering significant impact and profitability for the legal industry. However, we should point out some of the potential risks that might appear in legal technology. First, there are always issues of regulatory frameworks of LegTech that regulators need to focus on. This concern can be addressed by providing a regulatory sandbox as a means for the industry to develop the most suitable regulations. Second, there is always a gap in maintaining data protection and cybersecurity. Legal professionals need to be aware that the use of technology is prone to be abused, especially when it involves third-party usage of confidential client information. Third, we should carefully examine the influence of AI and related technologies on the business market to maximize the potential of technology in legal service. The advancement of technology will transform how legal service is delivered. The legal sector should continue to collaborate with stakeholders to make sure that the technology is used positively.
