Legal technology, also known as Legal Tech, refers to the use of technology and software to provide legal services and support the legal industry. Legal Tech companies are often startups founded with the purpose of disrupting the traditionally conservative legal market.
The diffusion of technology and law modifies legal technology to having the potential to break the law, and it can become a way in which to speak about exploitation of the legal system, as this is an emerging field.
Legal technology traditionally referred to the application of technology and software to help individual lawyers, law firms, medium and large scale businesses with practice management, document storage, billing, accounting and electronic discovery. Since 2011, Legal Tech has evolved to be associated more with technology startups disrupting the practice of law by giving people access to online software that reduces or in some cases eliminates the need to consult a lawyer, or by connecting people with lawyers more efficiently through online marketplaces and lawyer-matching websites.
The legal industry is widely seen to be conservative and traditional, with Law Technology Today noting that "in 50 years, the customer experience at most law firms has barely changed". Reasons for this include the fact law firms face weaker cost-cutting incentives than other professions (since they pass disbursements directly to their client) and are seen to be risk averse (as a minor technological error could have significant financial consequences for a client).
However, the growth of the hiring by businesses of in-house counsel and their increasing sophistication, together with the development of email, has led to clients placing increasing cost and time pressure on their lawyers. In addition, there are increasing incentives for lawyers to become technologically competent, with the American Bar Association voting in August 2012 to amend the Model Rules of Professional Conduct to require lawyers to keep abreast of "the benefits and risks associated with relevant technology", and in late 2019, the Federation of Law Societies of Canada adopted a similar amendment to the Model Code of Professional Conduct. The saturation of the market is leading many lawyers to look for cutting-edge ways to compete. The exponential growth in the volume of documents (mostly email) that must be reviewed for litigation cases has greatly accelerated the adoption of technology used in eDiscovery, with elements of machine language and artificial intelligence being incorporated and cloud-based services being adopted by law firms.
Stanford Law School has started CodeX, the Center for Legal Informatics, an interdisciplinary research center, which also incubates companies started by law students and computer scientists. Some companies that have come out of the program include Lex Machina and Legal.io.
Legal tech investment hit a record in 2019 at $1.2 billion.
Traditional areas of Legal Tech include:
- Contract Management
- Matter and Case Management
- Document automation
- Document storage
- Electronic discovery
- Enterprise legal management
- Legal research
- Practice management
- Case management
- E-Signature platform
More recent areas of growth in Legal Tech focus on:
- Providing tools or a marketplace to connect clients with lawyers
- Client Relationship Management (CRM) tools
- Providing tools for consumers and businesses to complete legal matters by themselves, obviating the need for a lawyer
- Data and contract analytics
- Law practice optimization
- Use of legally binding digital signature, which helps verify the digital identity of each signer, maintains the chain of custody for the documents and can provide audit trails
- Automation of legal writing or other substantive aspects of legal practice
- Platforms for succession planning i.e. Will writing, via online applications
- Providing tools to assist with immigration document preparation in lieu of hiring a lawyer.
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- Buchanan, Rachel (27 February 2017). "The role of technology in the future of legal professions". University of Oxford Faculty of Law.
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- Ambrogi, Robert. "The Cloud Has Landed: 10 Legal Tech Innovations and What They Mean". Wisconsin Lawyer. Retrieved 1 May 2015.
- James N Dertouzos, Nicholas M Pace and Robert H Anderson, The Legal And Economic Implications Of Electronic Discovery (Rand Institute for Civil Justice, 2008) 3; Pavan Mediratta, "Using Legal Data Analytics To Gain A Competitive Advantage", LAW.COM (Webpage, 2017) <https://www.law.com/native/?mvi=80e16694159446d0ae29f6c93e95806c&slreturn=20200028224509>.
- Stanford Law School (2016-11-27). "CodeX - Programs and Centers - Stanford Law School". Law.stanford.edu. Archived from the original on 2015-07-18. Retrieved 2016-12-10.
- "At $1.2 Billion, 2019 Is A Record Year for Legal Tech Investments -- And It's Only September". LawSites. 2019-09-16. Retrieved 2021-01-10.
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