The legal sector has been one of the stragglers when it comes to big traditional industries facing technology-driven ‘disruption’. In finance, high street banks are struggling with the gathering onslaught of their more profitable services from fintechs, such as currency exchange and cross-border transfers.
Accountants have also lost a lot of SME business to new software solutions and legacy transport, staffing and accommodation models are taking a beating from p2p tech. However, until now, lawyers and other legal services professionals, an industry worth £24 billion in the UK, have remained ensconced in their mahogany-lined offices, with firms happily charging up to £250 an hour for even junior lawyers to work on jobs that are largely copy/paste routine tasks.
That might be slightly harsh and playing to the lawyer-bashing galleys. Attaining the qualifications needed to practise law is a time consuming and expensive journey and breaking in to a firm that offers the opportunity to become fully qualified by getting the required on-the-job experience isn’t easy with numbers tightly controlled by quotas. The job also carries responsibility. However, there is also a strong argument that this ‘closed-shop’ has led to at least some areas of legal services incurring costs that are inflated far above what such routine tasks should.
And that’s exactly the perfect market for the latest technology in the world to automate. LegalTech isn’t exactly brand new but it is certainly only now that it has started to gather the momentum and scale that has lawyers starting to look over their shoulders much as accountants were several years ago.
Law has been slow to embrace new technology from within. There are a smattering of examples such as LegalTech accelerator programme organised by the Law Society and Barclays Bank and supported by City law firms Allen & Overy and Clifford Chance. A few of the big firms have also invested in projects that involve integrating AI into their internal processes to increase efficiency.
But using technology to offer more competitive prices to end clients? Almost non-existent. LegalTech start-up Aistemos, founded by Nigel Swycher, a former head of IP at Slaughter and May, a ‘magic circle’ law firm, scans patent filings to automate corporate intelligence reports. This is traditionally a menial trudge that newly qualified lawyers on the bottom rung of the ladder have to endure. A recent article in The Times recounts how Swycher was angrily questioned on whether he had any shame in taking jobs away from lawyers after presenting his technology product at a legal conference.
Swycher isn’t ashamed and thinks that the sector’s reticence to embrace technology has led to an industry that has become inexcusably inefficient.
“If a machine can count and sort something in five seconds that takes a lawyer five days, why would you get a human to do it?..Either clients will start adopting technology so they don’t have to go to the law firm, or they’ll start choosing the sort of firm that offers them a different type of business model and straight hours.”
An extremely expensive human at that. Lawyer salaries in magic circle London firms range from £85,000 to £140,000. At the lower end of that scale are those doing the kind of administrative ‘grunt work’ that the latest technology in the world can relatively easily automate.
On the encroaching tech tide that is starting to rise on the law industry, the Law Society’s technology and reference group chair Pavel Klimov comments:
“Being afraid of change is not the right approach. Lawyers will need to acquire a new set of skills and become tech-savvy.”
If the legal sector thinks it can hold back the tide, they should maybe have a chat with some of its accountant or banker friends.