Legal tech companies started cropping up in the early 2010s, and legal tech soon grew into a sustainable and undoubtedly irreversible trend. The best legal tech solutions will quickly become indispensable for practitioners’ day-to-day, like the online legal databases that appeared years ago and are now a staple of the legal industry. Firms must organize themselves quickly to take these developments in stride and prepare tomorrow’s lawyer.
With an increasingly large supply, how does one choose the service(s) that best meets their needs? Moreover, what needs are we talking about?
The gradual adoption of legal tech by legal professionals
The legal community was initially suspicious, even hostile, to the rise of legal technologies. The criticisms made at the time against a possible “uberisation” of the profession (the replacement of high-end services with low-cost and low-expertise solutions) were legitimate. If technology is a great opportunity, it can also be impractical or even harmful if it does not aptly fit the needs of players in a market as sensitive as the legal market. It was therefore necessary to become aware of what was at stake in order to successfully welcome and adapt to this trend. The growing number of legal tech companies created by lawyers or former lawyers[1] today demonstrates a desire on behalf of practitioners to appropriate this transition and not to let technology take over the legal practice. It should be noted that in France, lawyers have only been able to create legal tech companies since 1 July 2016. Legal tech is now a booming market in which business creations and investments are proliferating[2]. In fact, a considerable proportion of investments in legal tech in 2017 were made by legal professionals (55.6% among companies that agreed to disclose amounts and investors)[3]. This remains a very small market compared to the US, where 280 legal tech startups have raised over $750 million over the last five years[4]. According to a study conducted in 2017, only 16% of the firms surveyed used a form of legal tech, but this figure will rise to 56% within three to five years. Moreover, it predicted that digital transformation will become the most important issue for law firms over the same period[5]. Two factors explain this: the issues around this transformation are starting to be integrated into firms’ strategy, and digital solutions increasingly target professionals within the sector rather than private individuals. The question now is how to determine their needs and find the services that meet those needs.
The specific needs of a changing sector
Long-established practices and processes in law are bolstered by decades of experience. Digital solutions may seem like gadgets with no significant impact. This may be the case when the race for technology conceals services that are inappropriate to market practices. In a sector whose peculiarities and requirements render digital transformation less rapid than in other industries, innovation must find its rhythm and align with the needs of the profession. These needs are, however, real when one observes how law firms function. Their objectives are ultimately similar to those of any economic organization: attracting and retaining talent, innovating and developing new services, standing out from competition, building customer loyalty and acquiring new clients. The importance of customer relationships in particular reveals the added value brought by legal tech companies.Improved collaboration between teams
Law firm deals involve close cooperation between many parties: lawyers, financial advisers, auditors, administrations, and others. It is invariably both difficult and time-consuming to gather the right information from every party and bring everyone together to move the transaction forward. Lawyers usually assume the role of project manager, in charge of coordinating teams. Legal projects also have specific characteristics and require dedicated tools. Collaborative tools offered by legal tech companies like Closd are now able to ease this collaboration, better share information in real time and automate many low value-added tasks that obstruct the transaction process.[6]A renovation of the economic model
Business law firms are facing a challenge to their traditional business model. Originally based on hourly rates, it has evolved, at the request of customers, to practices like package or subscription-based models. Indeed, the need for predictability and reducing costs leads companies to increasingly refuse to pay fees related to pure process, as they are considered as bringing little or no added value to the service. Law firms, for their part, devote significant resources to these steps, which are essential to carrying out transactions. In addition, the decrease in the number of billable hours due to automation will require rethinking the existing model. To counter this, it is essential to bring new value to companies. A project management platform such as Closd brings legal certainty, precision in information, mobility thanks to the electronic signature, and comfort with the automation of the post-closing process. This important added value will enable the establishment of an economic model that above all values the expertise and know-how of lawyers.
A renewed competitiveness
Legal tech is also a unique opportunity to rethink the internal organization of firms, which are constantly searching for elements that will differentiate them from their competitors. The positioning and branding of a firm can greatly benefit from a technological asset and the provision of relevant digital services to its customers. Clients will appreciate that their advisers focus on the core tasks of strategic consulting, legal engineering and negotiation. People management and teamwork are also at the heart of this transition. Digital tools can increase productivity and teams’ flexibility. They require new skills such as project management, data analysis and greater computer knowledge – skills that can only benefit lawyers in the long-term. This will produce a generation of lawyers prepared for current and future technological evolutions; meanwhile, some studies estimate that 85% of jobs in 2030 do not exist yet[7]. In biology, the notion of adaptation can be defined as the modification of a character, process, or trait in a population of individuals that enhances survival and reproductive success. At Closd, we believe that the strength of tomorrow’s lawyer will reside in their ability to adapt to these evolutions, to appropriate them and even anticipate them. As former lawyers, we understand the issues at stake and make every effort to enable lawyers to make the most of these changes.
