LawTech in the Wake of Coronavirus

The legal industry has had to rethink the way it works in a bid to cope with the COVID-19 pandemic. Where will that leave us once the crisis has ended?

The COVID-19 crisis has forced the legal industry to innovate overnight. Anna Simmonds, a barrister and Head of Commercial at Sparqa Legal, discusses what might be learned in this period and how it could reshape the legal landscape.

The LawTech industry has been talking about how law could be done differently for years; and structural change was afoot. HMCTS pledged £1.2bn to digitise hearings in 2016. The MOJ recently pledged £2m in funding to TechNation to promote the use of technology in the legal sector. The LawTech market was booming, with £1bn global investment in legal technology last year.

But despite increased buzz in the LawTech market, for many legal practitioners, ‘innovation’ had often felt like rather an abstract concept. Of course, pressure to be more efficient and meet growing customer expectations to utilise the latest technology has been very real; but there existed a dissonance between this and the pressure to crack on with the ‘day job’, meaning that for many, LawTech remained no more than a buzzword.

Then in March 2020, the world changed. COVID-19 has stopped us all in our tracks. Courtrooms stand empty as the justice system was advised to conduct as many hearings as possible using video and conference calls instead.

Even the most tech-phobic practitioners have been forced to look to innovative solutions to this unprecedented global crisis overnight as they adapt to providing legal services and hearings remotely.

The COVID-19 crisis has forced the legal industry to innovate overnight.

Challenges

Larger law firms were already well equipped to deal with the challenges presented by the COVID-19 lockdown, with many LawTech tools already embedded across the firm. Smaller firms will have found they simply weren’t set up to deal with the risks remote casework and document management can present – security and privacy being the most obvious example.

Even firms with good infrastructure in place will still have had to grapple with the operational issues that present themselves with teams working remotely. Exceptionally good communication skills are required to keep everyone aligned and meeting targets from afar.  Uncertainty and the impact this has on productivity has opened up a role for online team and leadership tools to handle the interpersonal side of running a legal business.

Some lawyers have responded very quickly to the changes: one example is Cloisters’ chambers pilot initiative using remote video conferencing to deliver multi-party settlement meetings and mediations. There will be questions around what this new way of working means for open justice.

Several businesses have offered collaboration tools for free during this period to help with remote working: Microsoft Teams, Google Hangouts and Cisco to name a few, and it is encouraging to see examples of some LawTech vendors on that list too with contract management, online signature and learning and development tools being made widely available.

Threats

Investors tend to favour more conservative businesses during a time of economic uncertainty, so the biggest threat to LawTech is the inevitable impact on funding.

Many practice areas are experiencing a lull in work. However other areas, like family law and online crime, are anticipated to see work rise as a result of the lockdown .There will inevitably be less appetite amongst affected legal practices to invest in new LawTech products whilst the focus is on keeping core operations going.

The impact will be disastrous for many LawTech start-ups. We have already started to see LawTech companies like Disco cutting staff. However, products that can facilitate these new ways of working, such as video conferencing service Zoom, will have seen a huge spike in user numbers and shares (Zoom was recently valued at $29 billion.)

The increased need for efficiencies in legal service delivery will continue to draw interest from some investors keen to take the opportunity to buy cheaper shares in the most meaningful LawTech solutions.

The impact will be disastrous for many LawTech start-ups.

A Brave New World?

It is unclear how long social distancing measures will be in place. When restrictions are eventually lifted, will lawyers revert to the old way of doing things? What will we have learned from this time?

Will some of the formalities currently postponed for virtual hearings, suddenly feel antiquated and unnecessary? Will we see a shift to a more informal, and arguably more accessible, judiciary?

This is an opportunity to consider which areas of legal services really do benefit from the human touch. Some hearings, like jury trials, would surely never work remotely. But it is expected that other matters, like many case management and commercial hearings, will reveal themselves to have transitioned very nicely using remote working technology. Will we see an increase in the use of LawTech to help move as many processes online as required, leaving the face-to-face for essentials only?

We are hopeful that the most worthwhile LawTech products will survive this downturn by adapting to meet customers’ changing needs and continuing to play a crucial part in shaping this new legal landscape.

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