26 July 2021

Digital Legal Practice 2.0 – The Next Generation is Here!

Published on 26 July 2021

There’s statistics and podcasts, articles, and events (to name a few) a plenty extolling the importance, virtues and inevitability of the use and application of tech and data in legal practice. It’s been a critical discussion and it’s ranged from awareness raising to experience sharing and everything in between. But while most of us have been focussing our efforts on understanding and making the use case for tech and data analytics to improve all manner of efficiencies and effectiveness in the business and practice of law, the stacking of the tech and advances in legal data integration have been moving the market from Digital Practice 1.0 to Digital Practice 2.0 and, the 2.0 version promises to be truly transformative.

A powerful combination – tech, data, and legal practice

Since our the last CLI Newsletter in May, two big things happened that signalled significant change is the legal ecosystem with far reaching consequences for legal practice:

  1. Legaltech companies went public: in June/July LegalZoom (legal documents), InTapp (firm management platform) and DISCO (ediscovery) all went public in the US. Why is that such a big deal? Because it signals a permanence and financial gravitas for a sector of the tech marketplace that was once considered “temporary and alternate” to a significant, mainstream stakeholder in the legal ecosystem that will inevitably continue to expand and take business from lawyers along the way.

    We’ve seen the writing on the wall and evidence of this change for a while now – the legaltech marketplace has been growing quickly through:

    - organic growth from increased investment in existing legaltech companies (up to unicorn or one billion dollar status like Canada’s Clio (legal practice management and client intake software) or

    - vertical and horizontal expansion through the acquisition/consolidation by a select bunch of companies seeking to cement their own market share or expand it to allied marketplaces (like DocuSign’s recent acquisition of Clause (smart contracts) and Seal (NLP company)) or

    - strategic partnerships like those engaged in by iManage through its Solution Partners Programme, LexFusion’s “collaborative circle” or Reynen Court’s product catalogue of legaltech vendors (to name a few).

    - And, of course, the experimentation that has continued the exponential growth in the number of legaltech companies all over the place (take a peek at the Legaltech Hub to see where and how that is happening around the world).

    The evolution of legaltech, evident in these examples (and many, many more) is not just about business ownership and corporate status. It seems to also be indicating a more user centric approach in the legaltech sector itself. There’s an increasingly discernible focus on identifying client pain points first and then finding a solution rather than a “build it and they will come” mentality. This new-ish approach is also evident in the new roles emerging in some of the tech companies – these roles are focussed on collaboration, bridge building, translating, and connecting customer needs to products – the “community” or “customers are colleagues” approach to software development! 

    Tech companies that get this right will increasingly “cut out the middle-man” so e.g., bypass law firms and go direct to in-house legal departments and, bypass lawyers in favour of self-serve solutions from ALSPs direct to consumers. We are already seeing this and, we’ve seen it in other industries too – it’s the uberization of legal services and products, yes?

  2. The Legal Schema Project: this UK LawTech backed project is an open source initiative that provides a common language for creating and managing legal documents as data.” This promises to change the world of contracting FROM largely Word based documents which are different, can only be “read” by humans and cannot be integrated with other data based systems (from other digital-ready industry and business sectors) TO “new forms of functionality for contractual agreements and documents by enabling ‘open access’ to, and sharing of, contract data such as (i) search and analysis of data within contracts; (ii) integration of contract data with external systems for e.g. automated reporting and operations; and (iii) the creation of ‘smart legal contracts’ and integration with cryptoasset systems.”

    Let’s just think about that for a second…these sort of changes will require us to reconceive the whole nature of contracts, contracting, how contact-based obligations will be fulfilled and adjudicated. It opens the door, wide open, to comprehensive self-execution of contracts. And, because of the essential role that contracts play in the legal system in every practice area, it’s going to impact the work that lawyers do in many, many places…again! So, if there’s one paper you might want to read in the next month or two, this one on Legal Schema - A Structured Data Format for Digital Contracts in the UK, might be the one!

    While the outcomes of the Legal Schema project promise to be remarkable, the background to it is also instructive. The initiative started in a taskforce in November 2019, connected the dots between advances in cryptoassets, digital assets, and smart contracts inside and outside the legal world, looped in work done by the UK Law Reform Commission, utilised a safe place for experimentation, a LawTech Sandbox, secured funding to make the project happen, and produced a report in around 18 months (give or take).

    Why is that important? Because this project is signalling a new way of working in the legal industry – fast, agile, collaborative, multidisciplinary, multisector and user experience driven. This sort of project can’t happen any other way and the legal industry it envisages MUST work the same way.

The danger of being left behind

It’s easy to dismiss big events or initiatives like those described above as outliers or fads but not trends. The problem is that fads can turn into trends and once you have a trend, you’re already out of date and must “catch up.” Legaltech and data are not fads. How they are transforming legal practice is a trend and that is evolving at a blistering pace. We can’t stay stuck in sweating the small stuff like if we should continue to use esignatures for documents. We need to be engaging with the big stuff like whether we need the document at all. These recent events and projects are a timely reminder that if we don’t embrace all manner of change in the legal industry, we will quickly be left behind!

How we can help

If you’re new to these areas, the Centre for Legal Innovation has you covered for FREE – we have almost 150 videos on CLI-Collaborate our FREE resource hub including dedicated series in Digital Literacy, legal automation, ReineventED Legal Business case studies, Legal Tech demos, Legal Design Thinking and Doing, Customer Experience, Cybersecurity; if you prefer to listen, we have almost 80 episodes on The Legalpreneurs Sandbox podcast available in all the places you usually go for your podcasts; we offer FREE membership for our global learning community and seven Special Interest Groups in The Legalpreneurs Lab; and, we love to connect people so let us know who you need to chat with and we will help wherever we can, networking is our thing  – we’re here for you, please don’t hesitate to contact us at: CLI@collaw.edu.au.

About the Author

Terri Mottershead is the Executive Director of the Centre for Legal Innovation (Australia, New Zealand and Asia-Pacific) (CLI) at The College of Law. Terri works internationally with leaders of legal businesses supporting them in identifying trends, developing strategies, and transforming their capabilities and practices to deliver legal services/products in the new legal ecosystem. She is the “instigator, designer and developer in chief” of CLI’s global initiatives, networks and programs including the Legalpreneurs Lab, the Innovation Incubator Program, and its podcast series, The Legalpreneurs Sandbox. Prior to joining CLI, Terri was a practising lawyer, founded start-ups on three different continents, and established or led the in-house talent management departments for global firms and associations in Asia and the US including Lex Mundi, the Inter-Pacific Bar Association (IPBA) and DLA Piper LLP (US).