“A natural aversion to risk and a heavier regulatory burden mean lawtech startups struggle to attract law firm customers and find it difficult to progress beyond the ‘innovation’ stage”.
A study by IT market analyst TechMarketView show that lawtech predominantly remains in the initial ‘innovation’ and ‘early adoption’ stage and is far from fundamentally transforming the provision of legal services as it is very much predicted to do.
This is not due to any shortage of innovation. Thomson Reuters reported that the number of lawtech patents had jumped four-fold in five years. Patents have been filed which automate dispute resolution by analysing data between two parties and provides a suggested settlement. The tech is really extraordinary.
However, the difficulty is actually getting a law firm on board.
‘It is very hard to find a partner within a firm that is willing to be the first to deploy machine-learning or natural language processing on a live client project for the first time… they just see the risk of it going wrong, losing the client and damaging the firm’s reputation.’
Equally, a lot of start ups find themselves overwhelmed by the high level of security required by law firms. A significant amount of time and money has to be spent on cloud security and ensuring all concerns by clients regarding their own clients data are answered.
The delay in implementation of legaltech has proven to be an issue worrying legal start ups. They have legitimate concerns as to whether their company will float if no client properly commits to the tech.