Is Lawtech The future?
Lawtech is the verb defined by the Solicitors Regulation Authority (SRA) that encompasses technology within the legal sector.
However, in comparison to its sister from the Financial Sector, fintech, it hasn’t obtained the same level of kudos. Fintech has become a buzz word which has become synonymous with being a high net worth industry; newspapers are peppered with the term in eagerness to express coolness and help them to describe new developments they are trying to promote as trendy and modern.
Whilst lawtech investment last year was worth $1.7 billion, this was dwarfed by investment in fintech which stood at a staggering $111.8 billion.
So why does the fintech attract so more investment?
One thing that has helped fintech is the establishment of the CMA9 Open Banking project which funds investment within the sector to provide open source code that improves user expertise and security for the industry.
This helps give the industry a reliable platform for security and user experience to give the sector confidence for growth and investment. The Opening Banking project also offers support to industries outside of the fintech arena, but this has not caught on. This is in part due to accessibility issues caused by the Open Banking Project running behind schedule where their platform isn’t fully developed.
Lawtech faces similar security issues, and user experience improvements are long overdue.
If lawtech is given similar foundations to the fintech sector to build upon, we could see a similar pattern emerging. There are however signs that lawtech will follow suit and will expand rapidly, as despite lawtech only benefiting from a fraction of the amount of investment of fintech, based on previous years investment, this does reflect a seven-fold increase.
If a similar trend follows and lawtech takes a lead from the fintech sector, we will likely see the same type of automation seen in finance working in the law industry.
What is the Government doing to support lawtech?
Whilst the ‘CMA9 Opening Banking project’ probably reflects a larger investment, the government has produced a legal support ‘action plan’ promising £2 million for ‘innovative’ forms of legal support.
The SRA has also responded with their own plan, introducing the ‘Legal Access Challenge’. This is an 18-month programme designed to bring people together with the intention of building networks, and opportunities for collaboration.
Whilst the project initially doesn’t reflect the scale of investment required to match the potential of lawtech, it does provide a system operated by a regulator that will likely build momentum. The competition results are as yet to be announced but people with an interest within technology and the legal sector are keen to see the outcome and, ultimately, see how this aims to develop and build momentum within the sector.
In summary, it is highly likely that evidence from fintech’s rise to power and the actions emerging from within lawtech, will ensure that the legal sector’s technological equivalent becomes an increasingly dominant player.
Early indications of investment trends indicate this might be sooner rather than later.
Is your law firm committed to investing in legal technological solutions? What types of technology has your firm embraced and how has it improves the firm and client experience?