While some countries are facing a third wave of Covid-19, others such as the UK, are realistically preparing for some level of ‘re-normalisation’ in the coming months, in short: a reopening. But what will this look like in the legal sector, and what does it mean for legal tech?
The office will probably never be the same again. The idea that the office is the constant centre for all things work-related is over. Some companies and a small number of law firms have been very flexible for years, but this flexible approach will now be far more common.
We’ll have ‘a distributed working environment’ where for many the office is a place you come to when you have a good reason to. For others there may still be enforced attendance, but this may only be for part of the week. E.g. several law firms have already said WFH will be allowed for a few days per week.
This should strike a balance between the very real need to actually meet the people you work with to share ideas, to connect, and to train, with the desire to be more productive by not having to commute.
However, some connection in-person is needed to create that very human phenomenon we call culture. Culture is a very special thing and it sets one business apart from another in multiple ways. Much as many people (AL included) enjoy working from home (…although many also don’t), the reality is that if you never come together as a group ‘the glue’ that binds us together can start to evaporate.
In short, the office will be much more flexible, but the flexibility will be dependent on the culture of the business, and that in turn will depend very much on the owners/managers/founders of that organisation who set the tone for everyone else.
That will in turn have a profound impact on office space and the way offices are arranged. Hot-desking will likely become the norm, not just for a few, but for most people in any business that keeps a flexible work approach.
And, of course, that in turn means you’ll need less space. So, there will be a business incentive there also to be flexible, given the cost of office space in the centres of large cities.
The legal market, at least for the firms doing more complex commercial work, has been surprisingly resilient. In fact, for some firms, the partners have never done so well. Clients have been in a state of dire need for expert advice, while overall costs have dropped, and that means more partner profits.
But, has this turned into more demand for legal tech? It’s fair to say the disruption of the last year has clearly had a short-term downward impact for a number of companies – although not all. Firms have focused on doing the work that is coming through their front doors. Inhouse teams have focused on helping their companies. And that can snarl up implementation and slow some buying decisions.
That said, the overall appetite for legal technology only seems to be on an increasingly healthy long-term trajectory, and areas that have long been a hard sell now seem to be normalising, e.g. the use of doc automation tools, NLP review systems for large projects (see IBOR/LIBOR, for example), and CLM platforms seeing more interest from the inhouse world.
I.e. the pandemic has been a short-term slowdown in an otherwise steady expansion of demand.
Perhaps one challenge the market faces now is the sheer number of vendors across all segments of the legal tech market. We’ve seen some consolidation, and also the rise of marketplaces and app stores such as Reynen Court – and that is the natural response to an atomised market.
However, it remains highly atomised, just like the legal market is atomised, and perhaps will remain that way for a long time to come. The challenge, as ever, is finding people who really may want to buy your technology.
But, as things open up, as clients move from crisis mode, to the new normal of the reshaping economy of the years ahead, the focus on ‘changing the means of legal production’ will be stronger and more widespread than ever before.
While there is an open wallet approach to the most complex advisory work – and perhaps that is fair enough – when it comes to BAU and the process work component within complex matters there has also never been so much interest in finding better ways of doing it. And that will mean more and better use of tech. There is much to be optimistic about.
Back to reaching the buyers. While legal tech vendors have found they can still reach the audience through multiple avenues, the reality is that in-person events – if they have the right audience to match the right presenters – are one of the best ways to build a pipeline of business.
The challenge is when will they really start again? In the UK, it looks likely that things may start to happen over the summer, but there will be limitations. The main challenge will be keeping people apart inside venues.
The UK Government has floated ideas around having far less people at an event than the conference building is made for, allowing plenty of open space for attendees to use. This makes sense. But, it also means that really huge events of thousands of people, squeezed into the limits of a conference space may not happen for a very long time. The more likely outcome is that medium-size events of a few hundred people will succeed. And that perhaps there will be more of them.
And then, we may once again hear the refrain: ‘There’s too many conferences…!’ Although that will no doubt be music to the ears of many people. To get to a point where people start to moan about there being too many in-person gatherings….well, we can only hope to get to that point eventually.
The last point is about legal tech funding. As we’ve seen, VC investment has been lumpy, with tens of millions of dollars and pounds invested into more scalable companies, while several startups have struggled to survive, with some even going bust.
In some ways this is a natural evolution in the market and a sign of the investors getting wiser. It shows that knowledge levels are increasing among those who make investment decisions and they are avoiding bets on companies that look like they will have very meagre growth rates. And that’s fair enough – although it may miss out on some long-term bets that are great companies that will need a lot of time to reach critical mass.
This has also led to some companies looking to crowd funding to keep going. Although, this site has to say, is that really the best route? If investors don’t see the value in the company doesn’t that mean you may need to rethink your project? Or maybe you need to strengthen the management team, as investors are also basing decisions on the team leading the company?
More broadly, we can expect more money coming into legal tech as barriers to change erode and market standards and expectations on delivery change. But, that money may be more judicious, more careful, and that’s a good thing overall as it will force startups to really be game-changers, rather than just stating ‘we’re a game-changer’ on a set of PowerPoint slides.
The future is going to be flexible, demand for legal tech will increase, and conferences – albeit likely at a more modest size – will take place once again. This site is feeling realistically optimistic.
But, one final thought: the pandemic is not going away. It’s going to be normalised, to become part of our lives, just like other diseases such as the flu have become. There may well be flare ups again. And in Europe they are facing a third wave. But, with vaccination programmes and sensible measures, we will get to enjoy a grand reopening.
By Richard Tromans, Founder, Artificial Lawyer, March 2021.