Britain’s global reputation as a business-friendly environment for companies and investors hinges in many ways on the quality of our legal services and the rule of law.
It is this environment which has enabled the growth of a lawtech community that stands out for its expertise, talent and innovation in a diverse global sector.
This encompasses everything from document automation, advanced chatbots and practice management tools, through to predictive AI, smart legal contracts and knowledge management and research systems.
Lawtech, as defined by the UK’s LawTech Delivery Panel, encompasses 'technologies which aim to support, supplement, or replace traditional methods for delivering legal services; of transactions; or which improve the operation of the justice system'.
This definition captures the evolving nature of the sector and covers the most common ways legal technologies are applied, including back-office processes (such as a practice management systems and legal research) as well as allowing lawtech to be disaggregated from practice and services.
At a time of exponential technological advances, the Law Society advocates that regulation of lawtech, if any is needed, is carefully calibrated to protect legal service consumers without stifling innovation.
This will enable the UK legal services to maintain its industry-leading position in the face of growing competition, market liberalisation and disruption.
The Legal Services Consumer Panel’s work fostering consumer confidence in a technologically-enabled legal services sector is extremely helpful, as is their work to understand lawtech-users and identify potential gaps in existing regulation.
The Solicitors Regulation Authority (SRA) in its corporate strategy 2020-2023 has identified three themes which will form the foundation of their regulatory approach to lawtech: setting and maintaining high standards for the profession and SRA; technology and innovation; and anticipating and responding to change.
The SRA has said it intends to look at the different types of technological products being applied to the legal services sector, how they will be used by the sector and the practical and ethical implications for practitioners and consumers.
We welcome the SRA plans to engage with the UK’s lawtech ecosystem in this broad way to ensure that any regulation does not place unnecessary barriers in the way of innovation. Given the transnational nature of technology we strongly recommend the SRA conducts a comparative analysis to learn lessons from other territories involved in designing, deploying and regulating lawtech.
Lawtech is still evolving and there are several challenges which the SRA must address in their work, particularly on risk-based models of regulation. As lawtech is based on a constant process of innovation and firms adopt solutions in different ways, it is very difficult to provide an objective risk analysis.
Many lawtech products do not fit neatly in the current frameworks of firms. Risks are more likely to emerge from unintended consequences of new ways of working. Further research on the way technologies are being applied to reserved activities would be prudent.
It is a mistake to limit the definition of lawtech to only those technologies that replace lawyers’ time and interact with clients, as this fails to account for the many back-office developments that facilitate legal sector-specific administrative work. Such a narrow definition is also inaccurate as it does not reflect the most common uses of legal technology in private practice or in-house. Regulation based on such a definition could result in:
- Regulatory frameworks which do not reflect the continually changing nature of legal services. This might increase lawyers’ risk aversion to innovating or adopting new technology.
- The lawtech ecosystem being restricted in how it can innovate, offer legal services and ultimately scale, as regulation would be seen as an obstacle to creative problem-solving.
- Restricting the UK lawtech sector’s economic growth and limiting the expansion of the UK as a global technology hub.
This is an exciting time to be a lawtech entrepreneur in this country. It is also an exciting time to be a modern solicitor. If regulation strikes the right balance - between protecting the public and fostering innovation - the future is bright for the profession and this jurisdiction.
Simon Davis is president of the Law Society