The partnership model is among the barriers to firms adopting innovations in legal technology, research for the Law Society has concluded. A market analysis published by Chancery Lane today finds that so-called 'Lawtech' has a long way to go before it transforms the sector.
'The majority of law firms remain partnerships and money that would be spent on lawtech usually comes direct from the partner profit pool, something that can create a high bar to adoption,' the report Lawtech Adoption Research, by technology sector analyst TechMarketView, notes.
On the other hand, the most significant driver for the adoption of new technology is client pressure, especially for transparency over legal costs. 'In-house legal departments have historically found law firms opaque when it comes to getting sight of existing and forthcoming legal fees,' the report states.
Overall the research finds the business-to-business legal services market the most likely to adopt new technology, particularly in large law firms, 'where AI and machine learning-driven applications are ubiquitous'. By contrast the business-to-consumer legal market seems to be lagging behind. 'There is most traction in those law firms that are delivering large-scale commoditised services, where automation is principally all about driving efficiencies. For instance, chatbots, DIY law, robo-lawyers and triage tools are all becoming more common with a greater focus on the consumer experience.'
The lawtech supplier sector itself is less mature than its equivalents in financial and insurance technology. The report predicts that the sector 'is now ripe for a wave of consolidation and later stage funding'.
Law Society president Christina Blacklaws said: 'A range of drivers is accelerating development and adoption of lawtech, from an escalating need for efficiency, increasing workloads and complexity of work to client pressure on costs and shorter turnaround times. Our research found that law firms face barriers to adoption of many lawtech solutions that are fundamental to the industry, such as risks around compliance, the partnership and billable hours models.'