updated on 29 November 2022
Reading time: six minutes
The legal technology industry
Legal technology is becoming an increasingly decisive contributor to the every-day functioning and success of global law firms. With hordes of new competing tools swaying market trends daily, its presence and relevance in the legal industry is now rarely questioned.
As an aspiring or qualified solicitor, why does this matter to me?
The first key reason is that recently, especially considering remote working circumstances brought about by covid-19, most law firms are seeking to alter their internal practices/boost their offering by using technology. In fact, “56% of law firms in Europe indicate that their need for legal technology solutions has increased as a result of the covid crisis and 65% report that their investment in legal solutions will stay the same or increase moving ahead”. Any aspiring solicitor worth their salt should be able to highlight their target firm’s involvement and speak to the market trends. Secondly, legal technology offers exciting alternative career paths to those who are unsure whether the private practice route is for them.
What is legal technology?
Most browser searches will respond with broad phrases such as “tools that provide aid to firms in legal practice”. However, it’s important not to bottleneck the various categories of these technologies and the niche services they can deliver. While their functionality is particularly useful for law firms, the majority of legal technology software can be applied to any business that handles documents.
There are two main providers of technology: law firms and private companies. Law firms often choose to invest internally by building their own version and brand of legal technology. These technologies normally address specific issues for the firm internally, however, they’re typically then limited to the tool’s functionality alone. Moreover, some firms have attempted to commercialise their internally developed tools for the external market, beyond their own clients. On the other hand, private companies must ensure their tool offers a wide range of functionality. This will ensure that their software is sufficiently adaptable to a broad range of law firm needs so, in the eyes of the firms, they’re the better investment. For example, at my firm, Avvoka, our product team diligently incorporates client feedback into its roadmap to ensure the tool is always serving current market needs.
It’s impossible to comprehensively list the different categories of legal technology, let alone the specific tools within each category. For instance, within the realm of contract drafting, we might typically see tools, such as Avvoka, that assist in document automation, negotiation, eSignature and storage. This article will focus on document automation, as this is crucial in facilitating the first step of any transaction: contract creation.
Interested in learning more about the legal industry and technology? Check out this LCN Blog.
What’s document automation?
Picture a contract precedent, currently sat in a Microsoft Word document. At least twice a week (and likely much more often in a large firm), a lawyer inputs fresh data into the contract (eg, company name, company number) and then must add or exclude standard clauses based on the details of the transaction. This work is exactly why document automation technology was developed as it allows this process to be completed more efficiently. For example, the Avvoka platform turns contract precedents into simple online questionnaires, allowing firms to future proof their valuable knowledge bank and expedite the process of executing documents based on already automated templates.
The difference between legacy tools and no-code tools
There’s an entire market of private companies that offer software, such as document automation, as a service (SaaS companies). These companies typically fall into two common categories: legacy tools and no-code tools. Legacy tools have been around for decades and use coding to integrate their software and automate documents. No-code tools, such as Avvoka, are newer on the scene. They allow any users, regardless of their technical expertise or coding knowledge, to upload and automate documents on their platform with minimal training. While legacy tools have a well-established market presence, their high barriers to entry, costs and complexity, all because of the requirement for coding syntax in their templates, have created ample need for the newer tools.
Return on investment: how can document automation affect legal practice?
The broader benefits of technology adoption are clear as, according to the artificiallawyer.com, “63% of ‘technology leading’ firms have reported profitability increases over the past year, compared to only 46% of other firms that have put less emphasis on tech adoption”.
Firms that choose to take the plunge with document automation will be looking for a return on their investment. This can be delivered in various ways.
Firstly, by replacing the manual task of redrafting old contracts with a simple questionnaire, lawyers are creating contracts faster and more efficiently. In fact, on Avvoka, a single questionnaire can generate not just one, but hundreds of individually tailored documents at a time. This is possible where lawyers set up related documents, such as an engagement letter and a subsequent non-disclosure agreement, so that common data is populated throughout the various documents despite only being entered once. Importantly, this doesn’t mean less money for lawyers on the billable hour. It’s quite the contrary, since more efficiency equals higher deal turnover and client satisfaction, this leads to a greater return of investment and more room for new business.
Secondly, lawyers will improve their efficiency by reducing their occasional (but inevitable) human errors. This is accomplished by restricting access rights to documents, applying visibility conditions to documents so that unnecessary information is discarded and applying approval workflows to documents, so that senior team members can have full oversight of what’s going on in a deal.
Thirdly, lawyers will be able to analyse their work more efficiently and, consequently, reduce their time spent on undisputed areas of work and easily extrapolate what’s becoming market practice in negotiations. Avvoka’s clients can leverage our clause heatmaps that allow users to pinpoint which clauses have been marked up most heavily – shining a spotlight on potentially the most contentious clauses needing to be considered.
Finally, once adopted, lawyers’ improved efficiency and relief from repetitive work will free them up to do what they were trained to do (ie, exercise their legal minds for higher value work). These benefits have a domino effect on the internal workings of firms, including an improved mentality towards work and a renewed focus on legal practice.
As an aspiring solicitor, ask yourself the following questions:
A career in legal technology
The disruptive nature of the legal technology market means there are exciting and high-intensity jobs on the horizon, with new roles being created every day. It also means that employees (irrespective of seniority or tenure) work with high responsibility and can undertake genuinely influential work. If this is something that resonates with you, a career in legal technology might be worth considering!
Finley Edwards is a growth associate at Avvoka. You can connect with him via his email: [email protected].