Concerns about data protection and professional indemnity insurance have emerged as barriers to innovation in the adoption of new technologies by law firms - along with a striking divide between City and high street-type practices.
The study, carried out by the University of Oxford on behalf of the Solicitors Regulation Authority, found that 97% of the funding going in to the burgeoning lawtech sector is aimed at so-called BigLaw firms. While firms working for individuals and small businesses, the so-called PeopleLaw sector, have made more use of technologies such as videoconferencing over the past year, they have shied away from more radical innovation.
Use of technology was found to be highest among younger firms, those operating through alternative business structures and those working in areas where technology was already established, such as conveyancing.
Analysis of thousands of legal job advertisements published over the past six years found that while fewer than 2% of advertisements for solicitors mentioned lawtech skill requirements, up to 15% of jobs in other legal settings did. This, combined with the fact that three times as many roles are advertised each year in the unregulated sector, seems to be contributing to a widening lawtech skills gap between regulated and non-regulated providers.
Research leader Mari Sako, professor of management studies at the University of Oxford, said the study provides ‘robust evidence’ that technology and innovation are changing the legal sector. ‘But we also found that benefits from legal technology are not evenly distributed across different market segments. Regulators, including the SRA, collaborating with other stakeholders could play a major role, not only to lower regulatory uncertainty but also to level the playing field across the market segments.’
The SRA used the publication of the research - the second major survey of the lawtech scene to appear this summer - to unveil new initiatives to promote lawtech. Anna Bradley, chair, said: ‘Supporting innovation and the adoption of legal technology is a key priority. It can help increase access to justice for the public and small businesses, as well as supporting firms to be more efficient, benefitting everyone and the economy as a whole.
‘This is not just about artificial intelligence, virtual reality or future technologies,’ she said. ’Some of the innovation which has the greatest potential to improve access to justice at pace is already available. Such technology can be applied widely and be used on a day-to-day basis to benefit both consumers and law firms. The challenge now is how we all work together to enable this to happen.’