LegalTech - An Overview and Prospective Future

A primer to understand how technology is poised to disrupt law

Note: Below content is informed by online research, reading, and interviewing law practitioners. Resources can be found at end of the article.

Background

Emerging technologies such as mobile, data analytics, and machine learning had started affecting industries and customers beyond urban consumers and tech-savvy enterprises over the last decade. Retail and healthcare are examples of domains that have benefited significantly from this trend. Yet, there remain industries where technology has only started to a breakthrough in a meaningful way. Law is one such industry. I wanted to identify opportunities for technology to create a meaningful impact and started researching.

Being an outsider, I’d to:

1. develop a basic understanding of the field and state of technology adoption
2. understand the ecosystem and market, especially in India’s context

This article deals primarily with the first point. A follow-up article may detail out insights from the market.

Need for legaltech

If you’re inclined to read about the importance of law in society, a Google search is a good enough starting point. Hence, I’ll skip talking about that.
What is legaltech then? Wikipedia defines it as the use of technology and software to provide legal services and support the legal industry. It’s similar in spirit to how Fintech and Healthtech have augmented their respective industries and continue to do so. Unlike them, the law has been significantly slow on the uptake. This is due to resistance from a traditionally conservative industry mixed with a lack of understanding and interest from technologists.

Conversations about technology implementation in law often drift towards replacing lawyers. That line of thought misses the point entirely. Instead, legaltech’s biggest promises are:

augmenting work of law practitioners and subsequently improving their quality of professional life expanding access to legal services and justice for ordinary citizens and small businesses

Technology can help lower costs and increase efficiency. This can lead to a positive-sum outcome for all participants.

Breaking down law

Don’t worry, we aren’t going to do anything illegal. What we’ll do is categorize participants and work in the legal industry.

Harry Surden, in a talk about AI and Law at Stanford Law, identified three types of legaltech users:

1. Administrators of law
2. Practitioners of law
3. Users of law

In terms of work, a distinction that’s useful is one between the practice of law and the provision of legal services. The American Bar Association defines the practice of law as “the application of legal principles and judgment with regard to the circumstances or objectives of a person that require the knowledge and skill of a person trained in the law.” That’s a mouthful, ain’t it? Simply put, that’s work that requires legal education and expertise. Legal advisory, lawsuits, and negotiations are examples of such work.

In contrast to the practice of law, legal services require a low level of legal knowledge. Non-lawyers can perform such tasks too. These include company incorporation, patent filing, or rental agreements.

Even amongst practitioners, litigation and corporate law is a high-level distinction.

Prologue — technology in law

Before moving on to legaltech, it makes sense to look at how non-specialized software is having an effect on the field. The below examples are specific to India and may not necessarily apply elsewhere.

The use of video conferencing has exploded over the last few months due to the COVID-19 crisis. Many law firms and corporate teams had started embracing it prior to that. Cisco Webex came up multiple times during interviews. For litigators, it has been an abrupt transition that’s taking some time to get used to. Judiciary is struggling with network infrastructure issues amidst the pandemic. Bandwidth issues plague e-courts and online hearings. The office suite is used extensively for tasks such as legal document drafting. Microsoft teams may be a path of least resistance for those looking to move to the cloud for collaboration.

The last point above around the adoption of cloud collaboration software is interesting. It could be an example of a makeshift solution taking hold of the market until more specialized software comes in. Then again, only time will tell.

Legaltech in action

Legaltech, the way we define it, is concerned with applications that directly affect the practice of law and the provision of legal services. Stanford CodeX Techindex, a database of legaltech companies, comprises 9 categories. Those categories along with some examples are listed below.

• Marketplace — Connect various market participants (lawyers, students, users) with each other
   Examples: Upcounsel, Vakilsearch
• Document automation — Help customization and automation of various aspects related to legal documents
   Example: Legito
• Practice management — Help streamline processes, optimize workflows, and foster collaboration on an individual and team level
   Example: Clio
• Legal Research — Organize legal information and make it accessible
   Examples: Casetext, Manupatra, Indiankanoon
• Legal Education — Provide legal classes or training to students or practitioners looking for continuous education opportunities
• Online Dispute Resolution — Helps parties resolve small cases through online mediation, arbitration, or even without third-party intervention and hence, increase access to justice
   Examples: Sama, Presolv360
• E-discovery — Helps a legal party procure information in an electronic format from other relevant parties for purpose of legal proceedings
• Analytics — Generate legal insights and predict outcomes from documents and data
   Example: Lex Machina
• Compliance — Monitor, track and ensure compliance with relevant regulations
   Example: Arachnys

An independent report about legaltech business models that I’d come across offers a more comprehensive categorization of legaltech companies. Below is an insightful chart of the same.

Not a conclusion

There’s a need for stakeholder collaboration on multiple levels for legaltech to realize its promise. Judiciary should be provided with adequate infrastructure. Law practitioners and technologists should work together to build legaltech solutions. Legal education needs to prepare the upcoming workforce for industry developments.

If venture capital infusion is any measure, legaltech has started to take off in recent years in the west. India, on the other hand, is only getting started. Startups in the space are few and far between. The state of tech and data in the judiciary is still not as robust. Promising initiatives such as those run by not-for-profit Agami and Prarambh, India’s legaltech incubator, point to a positive future though.

The next decade should see technology permeate law in a meaningful way. The COVID pandemic will accelerate adoption. Here’s hoping that this development increases access to justice and improves the life of stakeholders.

References and resources

• Artifical Lawyer blog - a great resource for keeping up with the global legaltech ecosystem
• Agami Youtube channel - a great resource for those interested in the Indian legaltech ecosystem
• Indian LegalTech blog - a great resource for keeping up with the Indian legaltech ecosystem
• Stanford Codex website
• Artificial Intelligence and Law – An Overview and History by Harry Surden at Stanford Law
• Business models in LegalTech companies - e-book
• The State of data in the judicial sector by Civic Data Lab
• AI in Law and Legal Practice – A Comprehensive View of 35 Current Applications

If this topic interests you or if you have an interesting project that we can collaborate on, please feel free to reach out on Twitter, LinkedIn, or mail (akashtndn [at] gmail [dot] com).

Previously published at https://www.akashtandon.in/technology/2020-06-16-legaltech-a-10000-feet-overview/