Despite the never-ending need for lawyers, today one could argue that the legal industry is the least technologically advanced in the business world. But since the internet revolution began in the 1980’s, experts have claimed that the advent of technology had the potential to shift the legal industry to a whole new level. Today, that shift feels closer than ever.
Lawyers have been able to maintain a great mystique towards their profession because no one outside the legal practice seems to even wonder how lawyers do their work. This is the probable explanation as to why the business models of traditional legal service providers haven’t evolved much in past decades.
During this decade, there has been a refreshing rise of legal-tech start-ups, to the point where it is an up and coming industry on its own! Legal-tech is attracting and bringing together open-minded lawyers, entrepreneurs, software developers and investors. The shift in the world of law that clients have been waiting for since the dawn of the internet is close at hand.
This shift will slowly transform two things; the way legal services are provided, and the way those services are priced. Some legal services are set to evolve into products such as serving “packages” of legal documents. For instance, with the help of technology, new tools are arising to allow providers of legal services to start automating certain tasks like drafting standard legal documents and offering them as products for clients to consume. In consequence, pricing would also experience transformations. By creating products, lawyers could start charging for them instead of billing for the time taken to draft a simple contract or a motion to be filed in court. All of this would unmistakably lead to more efficient legal services and more predictable legal bills!
Richard Susskind, a British lawyer (probably one of the most renowned names when it comes to law and technology) has recently published a book titled Tomorrow’s Lawyers. In this book, he refers to three drivers for change in the legal industry. He calls them the “more-for-less” challenge, liberalization and technology. Yet, out of Susskind’s three drivers of change, one of them seems to be the biggest and most potent of them all: the “more-for-less” challenge.
The “more-for-less” challenge states that clients, particularly corporate clients (who account for well over half of the legal expenses in the world), are starting to pressure for more and better legal services at lower prices. This market pressure on legal service providers is ultimately the driver behind the motivation for so many people within the world of law to look for ways of making legal services more affordable and efficient. They are especially seeking technological solutions, because these have proven to work in making other industries cheaper and more efficient.
This same challenge has already had some effect on law firms in the past. After the financial crisis of 2008, for example, companies had reduced budgets and yet kept demanding legal services like corporate restructuring advice or starting bankruptcy claims, so they shifted their approach for finding legal counsel by implementing procurement mechanisms such as reverse auctions, where they would choose the law firms that offered the best rates. This, in turn, made certain law firms change the way they priced their services to meet their clients’ demands.
Nowadays, there are many start-ups and middle-sized companies that are demanding more cost-friendly legal services. Attaining this sort of clients has become another manifestation of the “more-for-less” challenge, because these companies have historically avoided looking for counsel, even when they needed it, due to budget constraints. This is the main target legal-tech start-ups are aiming at in the countries where legal-tech is growing the fastest.
The United States and the U.K. have the biggest legal markets in the world, which might explain why they are also the two fastest-growing legal-tech markets hosting the most start-ups in the field. Meanwhile, Scandinavian countries, particularly Sweden, are not very far behind when it comes to the explosion of legal-tech ventures.
Law and technology upstarts are seemingly growing everywhere in Sweden at a pace comparable to that of the U.S. and the U.K. Some of the most promising Swedish legal-tech ventures are:
• Trustweaver: Offering cloud-compliance services.
• Agreement24: Who offers personalized virtual lawyers.
• Precisely: A smart contract manager platform.
• VQ Legal: An intelligent legal document production software offered by VQ Virtual Intelligence.
• Donna: A software program that proof-reads legal documents.
• Trygga Avtal: An online platform that connects legal practitioners with clients.
• INIRES: Offering an online arbitration platform powered by Green Counsel.
• Swiftcourt: Offers both a smart contract management and an online dispute resolution platform.
Legal-tech is here to stay. Traditional actors of the legal services industry such as law firms and general counsels are already noticing an increase in competition from start-ups offering cheaper services by implementing technological solutions. In other words, the legal-tech shift is starting to happen, and traditional providers of legal services are bound to start competing for their place in the market against new and promising ventures.
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