Artificial Lawyer is now on holiday and will be back on July 14.
But, more importantly, this site is celebrating the fact that it is four years old!
What an incredible few years it has been. And there will be so much more to cover in the years ahead (see below). Legal technology really is one of the most dynamic sectors in the economy and likely will remain so on a global basis for many years to come.
Usually on AL’s birthday there is a review of all the things that have happened and where the site has got to in terms of growth and development. This year I thought I’d do something a little different and look ahead to what may happen in the next four years, i.e. by June 2024.
That said, there are a few things that have got to be mentioned that have happened in the last 12 months or so, such as AL’s global audience continuing to grow and that now sees regular readers in 40 countries worldwide, with the US still having the largest readership, followed closely by the UK, and then Canada, Australia, India and Germany, as the top six largest audiences.
Since the start of 2019, Artificial Lawyer has received close to 1 million views…!!! That’s almost 1 million views from people searching for news and insight into the cutting edge of legal technology and key changes in the legal market.
Moreover, it seems like a long time has past, but it was only about nine months ago when AL launched Legal Innovators, this site’s first major all-day conference in October 2019. That feels like a lifetime ago, and thinking back to when AL got started around June 2016, that feels like several very good lifetimes ago! It’s amazing how much has been packed into these four brief years.
Also, in May, AL, with the help of good friends Cosmonauts, put on Legal Innovators Online – a three-day conference with a virtual exhibitor hall and the ability to network inside the event platform – which was another first.
And we plan to hold Legal Innovators again this October in London, in person. Plus, the plan for Legal Innovators California in San Francisco in November is also still scheduled. If we have to delay either event we’ll move to early Spring 2021 – but here’s hoping.
Before launching into the future, I want to say a huge thank you to all of the readers of Artificial Lawyer around the world, you make it all worthwhile. Thank you!
I also want to thank the conference sponsors and advertisers who make all of this possible. Thanks also to the many people AL has interviewed over the years and who have taken part in events, thank you for your time, engagement and insights. And finally, a big thank you for all the kind words and messages of encouragement over the years that people have sent in out of the blue. It always makes my day to hear that someone has been inspired by this site.
Thank you to everyone who reads and gets value out of Artificial Lawyer, its news, features, commentary, job site, education directory, and its events. Without you there would be no AL.
This site is four because of you. Here’s to another exciting four years!
The Future: What Will Happen By 2024?
No matter what happens with the current Covid-19 situation much of the legal and legal tech world will carry on evolving, learning, growing and heading in new and sometimes unexpected directions.
Here are some thoughts on what may occur between now and June 2024. The predictions are divided between Likely, Maybe and Long Shot.
- Several of the larger and more famous New Wave of legal tech companies that emerged in the 2015 to 2017 startup surge will have merged with complementary legal tech platforms, or sold out to much larger and perhaps multi-sector companies. This is because many are backed by VC funding and some of those funds will wish to realise their investments by then.
- Also, even by 2024, very few, if any, will be large enough to move to an IPO, at least on a major exchange, so a sale to another company looks to be the most likely outcome.
- That will really drive consolidation, but – at the same time – this site does not see any reduction in the desire to create new legal tech startups, as seen in the field of NLP-driven doc review and analysis. There is a constant flow of new approaches and applications, and that will probably never stop.
- Among the Legal Services Businesses (LSBs), the Big Four and focused process groups, such as Elevate and UnitedLex, will have a much larger slice of the market than before. Their share of the legal market is still relatively small today, but it will grow year on year, with the new recession and rise of legal ops driving more and more large companies to look for better solutions to their process needs. Once they get used to better ways of procuring what they need they will likely not look back.
- But…..LSBs with a strong advisory segment (also known by the ancient English language term ‘law firms‘) will be forced to rapidly expand their own process capabilities to compete. However, this will only accelerate changes in expectations among the clients, creating a virtuous feedback loop that drives better project management and procurement of legal services – and more use of technology, as just large amounts of manual legal labour will not be enough to meet this challenge.
- We’ll see more M&A among LSBs operating in the mid-market as they struggle through the downturn, and grapple with the inability to sufficiently invest in new tech, or have the resources (or right business model) to build process teams and more than law offerings needed to compete.
- There will be more lawyers globally; lawyer pay at top LSBs will go up eventually once the crisis has passed; billable rates will also rise again – despite some opposition (see below); and demand for legal services – overall on a global level – will continue to increase. But, there will also be more paralegals than ever before, and the debate over the billable hour will have finally reached boiling point and something will actually happen across the market on a systemic level.
- Clients will really start to push back in ways that make 2009’s New Normal look like a walk in the park. That will drive real change in adoption of technology as how else can LSBs really become more efficient?
- That said, don’t expect old habits to die off easily. LSBs with strong advisory businesses will try to hold onto all the bad habits of the past. As noted, some will still try to push up hourly rates and reinforce old methods – and in many cases they will still succeed, while at the same time a growing number of clients are pushing back. Buyers and sellers in the commercial legal world are caught up in a complex and sometimes dysfunctional relationship that is going to take a lot of effort to resolve.
- The next four years are going to be a real showdown between the old and the new models of legal services, and if the last 20 years are anything to go by, then the old guard are not going to give up without a fierce and drawn-out battle. Although, they will lose in the end, and I think they know that. Interesting times….!
- Legal tech investment – after a reduction on the startup side in the current climate – will gather pace again. This is because the legal tech market is global, but most companies still mostly sell into a handful of large markets such as the US and UK. With global markets comes huge potential for growth, and that means more opportunity for investors to get a solid return. There’s a whole world out there that may want your applications.
- Plus, even large markets such as the US and UK have only seen real engagement among the largest LSBs and inhouse teams. Really scaling your product is about making the tech adaptable to a wider audience: more user-friendly, more intuitive, potentially at a better price, with no ‘instruction manual’ or training required. If you can do that, then the world is your oyster.
- And, Artificial Lawyer will also grow and grow, doing more events, launching new capabilities and widening its already global audience.
- The UK starts the process of a new Clementi Review – the landmark 2004 Government project to reform the legal sector in the interests of the consumer. This new review will not focus so much on regulation, as the UK has deregulated almost everything it can already and this has not massively increased access to justice. The focus will instead be on how to encourage the uptake of technology, and what the barriers are to its adoption, especially among smaller LSBs. This is because tech is the key ingredient now to making high quality legal services more affordable.
- Something to note for the US – deregulation here has not resulted in ethical issues. Its main bonus has been allowing the Big Four to thrive, which has increased competition at the top end of the commercial market. Of course, some US Bars may not want to see any competition and so will make sure what happened in the UK is not repeated, i.e. more competition.
- The other great step that happened in the UK, and which happened before the Clementi review, was the creation of Licensed Conveyancers – who handle a key consumer need, the buying and selling of property. This is ‘legal work’, but not done by regular ‘lawyers’. It was a stroke of genius and allows normal people to access legal services for relatively low prices, but only in a narrow field, e.g. house sales. Something else for the US to consider perhaps by 2024…?
- The term ‘law firm’ becomes increasingly outdated, at least in deregulated legal markets such as the UK, which have a diversity of entities. Alternative Legal Services Provider (ALSP) also seems outdated. This is because in a world where you have a wide spectrum of businesses of different types, selling a mix of advisory, process, and consulting, and in some cases selling their own software, the idea that there is a world of uniform law ‘firms‘ and then opposite to that there is ‘an alternative’, doesn’t make any sense. What we have in reality is a spectrum of businesses with overlapping business models and offerings, often serving the same clients. I.e. we have a market made of Legal Services Businesses (LSBs).
- For one, Artificial Lawyer will be trying its best to avoid the ‘f-word’ and the term ALSP. Also, AL won’t be using ‘law company’ either. It’s LSB for everything.
- There may be a major step forward in deep-learning and NLP, perhaps supported by much faster and more powerful computing capabilities. That then leads to a breakthrough in text analysis, removing much of the training work still needed to be done by users. That in turn speeds up this tech’s adoption across a much broader market simply because it’s now easier to use and requires no extra resources to leverage its benefits.
- One of the Big Four merges with a leading international LSB. Although there would be challenges in the US, across most of the planet the deal would be hugely synergistic and potentially trigger other moves. Such a deal may perhaps be triggered when one of the UK’s top LSBs realises it cannot fund the kind of tech-integrated, consultative and process-focused approach the Big Four have. While Big Four LSBs may prefer to build via lateral hires, the potential to grow rapidly via a major deal is too good an opportunity to turn down.
- We see the creation of a whole new wave of process-focused LSBs as lawyers and entrepreneurs observe the way the legal market is shifting. The clients can clearly see the process elements of the law, as this is no longer hidden under the mirage of complexity. With the Emperor’s New Clothes in full view now, clients embrace these process focused groups with increased enthusiasm.
AL Is On Holiday
I hope you’ve enjoyed the 2024 prognostications.
Around this time of year I usually take a nice, long holiday, and even with a partial lockdown in place, that tradition is continuing. In fact, given that as we come out of lockdown it’s all going to get a lot busier, now really is the time to take a holiday.
So, Artificial Lawyer will be back to normal news publishing on Tuesday, July 14 – and I’ll be ready and recharged for what will no doubt be another headlong charge into the future, filled with exciting changes and innovation.
See you all soon!
Richard Tromans, Founder, Artificial Lawyer (June 2020)