The Legal Industry’s Next Digital Frontier: The One-Stop Shop Solution
A growing mountain of legal software designed to fulfill niche functions has created an environment where lawyers are increasingly spoiled for choice.
Lawyer Monthly hears from Eleanor Weaver, CEO of Luminance, on the prevalence of technology in law and how a single platform is required to integrate it all.
Today, technology is being used by lawyers on a daily basis, from document signing to data rooms, to providing enhanced insight during processes like M&A due diligence or eDiscovery.
But with demand for LegalTech tools sky high, so is the supply. And in an increasingly crowded LegalTech market, it can be difficult for lawyers to find the right solution for their needs, particularly when many of these tools claim to be using sophisticated technology like AI to provide an extra layer of analysis, but actually do nothing of the sort.
Despite being an industry traditionally quite resistant to change, industry experts and investment professionals are placing big bets on this changing: investment in legal technology companies was $1.2 billion in 2019 and has only grown since. And as funding for this fast-growing area has increased, legal tech start-ups have proliferated. In fact, a list compiled by Stanford University feature nearly 1,250 legal technology companies, while a start-up map put together by LegalTech start-up community, Legal Geek includes more than 250 from Europe alone.
It is not uncommon for legal professionals to be using multiple – sometimes dozens – of technologies, each of them fulfilling a niche. Indeed, a lot of LegalTech providers are ‘point’ solutions, meaning they are only able to perform very specific tasks. For instance, this could be a tool that facilitates collaboration across team members or automates the M&A due diligence process by extracting relevant clauses like ‘Change of Control’ and ‘Termination’.
A lack of integration between these platforms has meant that lawyers often find themselves switching between the various tools for different practice areas, wasting precious time, resources and money. Think about the time and effort needed to switch between the results generated from a contract extraction tool to a Word document – the process of locating the relevant document, finding the specific area of the document that needs to be amended and then transferring the analysis provided by the extraction tool is extremely laborious.
It is not uncommon for legal professionals to be using multiple – sometimes dozens – of technologies, each of them fulfilling a niche.
Not to mention the fact that a lot of these technologies lack the flexibility to work in different languages or even across different jurisdictions; I have spoken to global organisations where each and every office has their own tech stack in order to cater to their language needs. It goes without saying that this can be a real hinderance to tech collaboration across global offices as well as overall innovation within a practice.
Recognising the changes underway, a lot of LegalTech providers are now integrating or merging their technologies in an attempt to become the ultimate one-stop shop. 2020 saw Litera, a legal workflow and workspace technology company acquire Allegory, a cloud-based casement management software, to further its aim to become a one-stop shop for the legal profession. There was also Onit, an e-billing and contract management software, which bought SimpleLegal, a technology that helps with collaboration and tracks legal spending.
However, a lot of these providers are still relying on outdated technology such as creating vast banks of rules in a database which search the documents for hits. This inflexible approach means that in an unexpected event like the pandemic or a changing legal situation like Brexit, these technologies are unable to adapt to new legal needs or changes, instead requiring intensive re-programming and re-configuration to be of any value to lawyers. Merely integrating with another legaltech provider is therefore not enough to be a one-stop shop if the underlying technology is not flexible enough to meet evolving legal needs.
Next-generation AI and machine learning is changing the game. The technology does not require any machine ‘pre-training’, but instead can flexibly adapt to the data it sees, no matter the size, complexity, language or even use case, whether it be a regulatory compliance review, an M&A due diligence transaction or even a litigation case.
In the past few months, end-to-end AI technology has been critical for firms across the globe. I was recently speaking to Tanja Podinic, the Global Director of Innovation Programs at Dentons, who talked about how the firm were using advanced technology to identify force majeure clauses for COVID-19-focused reviews as well as to identify and then remediate and modify documents which are non-compliant with data privacy legislation like the GDPR and CCPA. Dentons were able to deploy Luminance across their European, Middle Eastern, African and Asian offices, with same technology enabling them to work seamlessly across cross-border, multilingual legal matter.
But some think that the one-stop shop may be too good to be true. A recent article in LegalTech News even suggested that firms are concerned that one-stop shop solutions may not offer the flexibility or ‘best-in-class’ functionality for specific legal tasks, meaning they are not able to pivot to new legal changes. These concerns are certainly valid if you are reliant on a solution that isn’t using the latest advances in technology, and sadly there will still be cases of firms having their fingers burnt by false claims of AI and machine learning that are actually reliant on rules-based technologies. But true AI is changing this, helping lawyers across a full spectrum of legal needs, all from within a single, streamlined platform.
We are now entering a next wave of legaltech innovation and finding a one-stop shop solution is a crucial part of this shift. With advanced AI that is able to flexibly adapt to any dataset it sees, finding a one-stop shop solution is not a challenge, but an opportunity.