Lawtech – a $15.9bn industry. What is it and how is it helping in-house legal teams?

30 Oct, 2019

Lawtech – a $15.9bn industry. What is it and how is it helping in-house legal teams?

What is “lawtech”?

The Law Society’s definition is nice and easy to understand: it is the term that is used to “describe technologies that aim to support, supplement or replace traditional methods for delivering legal services, or that improve the way the justice system operates”. Traditionally it incorporates tools such as document automation, AI (Artificial Intelligence), “smart legal contracts” and simply research systems.



It was reported last week that the lawtech global market is valued at $15.9bn, with more to come. Investment in UK lawtech is now at £61m per year, and this is a major increase on the circa £20m just one year previously.

After helping a few people find jobs in legal technology in Manchester recently (where it appears that top tier private practice and dare I say it the big 4 accountancy practices are investing heavily into being legal disruptors), it occurred to me that I haven’t spent time looking at and properly understanding where the market is up to and what it means in practice for in-house legal teams.

Do I even know what lawtech means in 2019 – probably not! This appears to be the case with several in-house lawyers who I’ve spoken with recently – it comes with a lot of jargon which is confusing for anybody, and some of the technologies are so new that the exact definition of terms is in a bit of flux.

It’s a bit of a buzz-word of course, and we hear more and more about lawtech and the technologies, tools and processes that fall into it, but what exactly is it, and more importantly how can it help in-house legal teams?


The important bit – will it replace me as an in-house lawyer?

Lawtech is absolutely changing the types of task that (mainly junior, as far as I can tell) lawyers undertake, however there is no real expectation that lawtech will replace anyone just yet! It will likely create jobs in other areas though – legal engineers and project managers will be the norm in a few years’ time.


What kind of lawtech products are we talking about?

There are a wide variety of different products available now such as contract automation, legal cost analysis, searching (i.e. for research), litigation prediction tools, money laundering, GDPR. Of course, we’ll see different interesting products in the future that do a wide variety of things, some of which will be extremely clever predictive and smart pieces of tech.


Where exactly are we at right now, and what are the real benefits of lawtech for in-house legal teams?

A recent report by Lexis Nexis (Legal Technology: Looking Past the Hype) has been useful in getting to grips with how General Counsel and others in the in-house legal community are reacting to and incorporating this new technology. The pace of change is huge, and over half of General Counsels surveyed said that technology investments have increased efficiency, and more believe that it will improve the accuracy of their work over the next 3 to 5 years.

A number of sources point towards legal teams being more often than not expected by their company/organisation to use technology to more effectively and sensibly manage the legal and regulatory risk, so legal is very much a part of the whole strategy of the business and not in any way just a supporting business service (like using an outsourced law firm I guess). The technical legal bit is important, but technology helps the lawyers in in-house teams be more commercial and have the wider business interests in mind when advising.

New legal technologies can also make decision-making more accurate – for instance when looking across a portfolio of work and deciding what is more important, or indeed who should do it and when by. This can apply for the regular work streams of an in-house team, or indeed more sophisticated or unusual distinct areas like patents and trademarks, commercial litigation, or commercial property.

The other point is cost of legal services and senior in-house lawyers will agree that this is a major part of their jobs – the ability to drive down cost of legal work from panel firms is a priority, and technology allows routine/repetitive jobs to be duplicated easily, limiting costs, whilst the other more intellectually stimulating and important work can be done by experts who you welcome paying for the job they do! Lawtech allows GCs to demonstrate efficiency and a good return on what they pay for the products they invest in within lawtech.


Comparison – In-house versus private practice use of lawtech

Lawtech doesn’t seem to have been as relevant to with in-house professionals directly compared to how it’s been embraced by the large mid and top tier law firms, apart from in some of the larger and more established in-house legal teams which run more like mini-law firms themselves!

These larger in-house teams point to the analytical and transparency benefits of legal spend through lawtech solutions (in real time in some cases) as well as in other areas such as electronic signatures, document review, AI and RPA – Robotic Process Automation*. Some law firms offer training contract seats in legal technology or lawtech, and we haven’t seen this yet in in-house legal teams but might in the future see at least secondments to these important teams in large law firms.

*I didn’t know what this meant, so looked it up and Norton Rose Fulbright provided the best definition:

“Robotic process automation (RPA)

A type of AI software programme that utilises machine learning to automate high-volume, repeatable processes or tasks that previously required a human to perform. RPA is different from standard automation as RPA software can be trained by demonstrating the steps in a process rather than by using code-based programming. RPA software interacts with the process in question (often another computer application) in the same way a human user would.

This makes it more adaptable and more easily used by human end users. In a recent report on innovation in law, the Law Society highlighted various areas where RPA software could be used, including: Land Registry checks, populating Ministry of Justice forms, employment tribunal preparation, conveyancing processing and data room administration.”


What does this mean for the future?

I can well see a situation 5 years into the future where mid to large in-house legal teams start recruiting people from top tier legal technology teams in private practice – these employees will usually be called “legal engineers” or “legal project managers” and will have a deep understanding of law and technology and how it fits together. These people won’t have any traditional or outdated ideas about what lawtech means, and will have been well trained and are used to using these new technologies in their day to day work, sometimes even developing their own bits of software…

These people will be highly valued by General Counsels and Heads of Legal looking to do all the regular things that they do operationally, like streamlining work flows, tightening processes legal and otherwise across the business, and save costs of course. Cost is not always the most important thing – it will lead to more visibility and usefulness of legal across the organisation, and the separation of legal teams or being seen as simply a cost to the business will hopefully be less prevalent.


Adam Zdravkovic, Associate Director at Think Legal