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How legaltech can help you compete against larger firms
Continuing the discussion on the evolution of the legaltech sector and how it could revolutionise the legal industry, Law Society partner and equity crowdfunding platform Seedrs explains how the rise of legaltech is closing the gap between large and small legal firms.
Technology has a general tendency to reduce inequality in the long run.
The ubiquity of internet-connected smartphones and free access to Wikipedia has brought encylopaedic knowledge to the masses in their homes, whereas before it was only available to those who frequented libraries or had the financial resources - and shelf space - to purchase multiple volumes of the Encyclopædia Britannica.
The same applies to technological developments across all sectors, including law: although the first to benefit are those with deep wallets, in time, those benefits tend to spread across the board.
How is technology levelling the playing field in the legal sector?
We have seen technology level the playing field in other sectors, notably finance, which is arguably the most advanced sector.
For example, Revolut raised £3.8 million on Seedrs, and used technology to create new products and services that challenged the traditional practices of the high street banks. They used a new form of fundraising on Seedrs to help achieve this, an example of levelling the playing field which could be continued in the legal sector.
Although the legal profession has traditionally been cautious to embrace new technology, the past couple of decades have seen significant advancements in legal practice administration - from email to cloud computing - which have transformed the typical working lives of lawyers.
Not all of the technologies have reduced inequalities within the sector, but legaltech which reduces reliance on additional staff (such as secretaries and paralegals) has helped to level the playing field between larger firms with plentiful resources, and smaller practices which cannot afford extra employees.
Cloud-based practice management
Modern lawyers need to be able to access their practice management suite 24/7, whether they are in the office or at home.
Cloud computing is designed to enable effective agile working while reducing the need for in-house IT staff. As cloud servers are based in dedicated facilities, reliability as well as security are extremely high.
Furthermore, most cloud-based software works on a per-user subscription model (often monthly) and allows scalability, which further reduces costs normally associated with establishing on-premises IT systems.
Monthly billing is a time-consuming exercise which, ironically, diverts fee-earners from billable work, particularly in smaller firms which lack a finance team.
Automated time recording (such as Ping) and billing systems can help to save time and streamline the billing process without requiring additional staff.
They can automatically calculate time spent on answering client emails and phone calls, keep tabs on time devoted to research or court appearances, and link all these records to individual clients.
At the end of the month, the software can automatically generate invoices.
Lawyers are no strangers when it comes to dictation. Secretarial fees can often be prohibitive for sole practitioners and smaller firms, but dictating is around three times faster than typing, so its benefits cannot be ignored.
Fortunately, these days, voice recognition technology is sufficiently advanced that solicitors can dictate to their laptops or mobile phones using products such as SpeechWrite, without needing to spend huge amounts of time correcting the computer generated text file.
Document automation and contract creation
There are significant time savings to be had when it comes to creating contracts or other documentation for clients, by using one of the many document-building tools on the market.
Traditionally, paralegals or junior lawyers would spend their time adapting templates or precedents; now, products such as Avvoka and Scribestar can help lawyers to create templates or complete documents much faster and more efficiently.
Big data and analytics
Making sense of one’s own business data can be key to identifying threats and opportunities in the market, as well as how resources are being spent by the firm and where the best return on investment lies.
In the absence of a dedicated marketing manager, legaltech products such as Clocktimizer can help to analyse narratives within law firms and better identify profitability.
Trends highlighted by the software can help determine the best use of marketing spend (such as focusing on attracting clients for a particular service area).
Inroads are being made into technologies which help lawyers to predict the outcomes of cases, generally based on large-scale analysis of judgments from previous similar cases.
Normally, legal research would need to be carried out by lawyers and knowledge managers, sifting through material to identify precedents and winning strategies.
But legaltech can now provide more power to their elbow; for example, Lex Machina’s Legal Analytics Platform ‘mines litigation data’ and uses ‘Natural Language Processing and Machine Learning’ to predict the outcomes of cases and help lawyers to improve their strategies.
The tools outlined above can all help smaller firms to bridge the gap with their larger, better staffed rivals, by using technology to achieve tasks traditionally carried out by people.
The development of legaltech depends, to some extent, upon investment, either by law firms or third parties.
Seedrs helps start-ups and early-stage businesses to get their products off the ground, levelling the playing field both by facilitating investment to help start-ups and scale-ups to compete with larger players - and also leading to new software tools which can be used by all lawyers to reduce inequalities across the legal sector.
This gradual levelling of the playing field will benefit smaller outfits, prompting their larger rivals to invest in new technology and creating a sort of virtuous cycle.
Law Society members can get involved with supporting the growth of the legaltech sector and other early-stage businesses by checking out the latest investment opportunities now live on Seedrs.
Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Tax treatment depends on individual circumstances and is subject to change in future.
The content on this page has been provided by Seedrs and has been approved as a financial promotion by Seedrs Limited (Seedrs) which is authorised and regulated by the Financial Conduct Authority (No. 550317).
The Law Society is not responsible for any of the products and services offered by Seedrs, only Seedrs will be responsible and liable for the suitability of their products and services in accordance with the terms of any contract that you enter into with them.
The Law Society does not make investment recommendations to you nor does it offer advice on investment and no communications from The Law Society, through this document or any other medium, should be construed as an investment recommendation or advice on investment.
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