Crikey, what a year it’s been. A year of some progress and a lot of nonsense, 2018 can be summarised as a time when expectation far outpaced reality in legal tech land. The buzz around AI has meant that many law firms have bought solutions that they, particularly their partners, believe will be a panacea for all of their problems, and have inevitably been disappointed.
As I said in a talk at Legal Geek that seems to have resonated with a lot of people, the smartest law firms are realising that they first need to get on top of their data and processes before slapping a shiny toy on top of what is, in tech terms, still effectively chaos. The message is getting through, but the shiny toy culture is one that needs to be managed carefully and by a strong IT team, if good money isn’t to be thrown after bad. It’s a battle that many IT teams are not currently winning as partners become tech experts thanks to Apple.
Contract review is an area where we have seen most progress this year: Kira Systems and Luminance have both had a great year and within a minority of the bigger corporate teams, contract review software is becoming the default position – they must use it unless an excuse is given not to. That is still far from the norm but great progress nonetheless.
Thanks to deregulation the UK is outpacing the US in almost every area of legal tech ‘innovation’ apart from litigation analytics, where most recently we saw the launch by LexisNexis of case law analytics tool Context, which will be available next in Canada and then the UK.
However, there is a skills gap across the legal sector and many projects are failing or not moving as quickly as law firms would like because they don’t have the right people to deliver them.
Automation is an area where firms can create huge efficiencies but among firms of 50 partners and over, under a quarter of them have attempted document automation in any meaningful way.
Aside from the fact that the talent pool in this area is relatively small, firms are also in many cases still unwilling to invest in hiring or devoting dedicated resource to IT projects – the curse of the partnership model still holds fast – and vendors should do more to step up the services side of their offering.
There are a few law firms that are very visibly pulling ahead. One that really stands out this year is Clifford Chance, which as Legal IT Insider exclusively revealed this year, has launched a separate company to house its digital solutions, including white labelled automation offering Clifford Chance Dr@ft. That company, called Applied Solutions, is led out of New York and will be on offer to US clients in what will be a shock to local US law firms.
Clifford Chance has also signed up with Workshare Transact and the adoption of transaction and contract management platforms such as Avvoka, Juro and thedocyard picked up significantly in 2018, albeit those offerings are not always being used for what it says on the tin.
We have this year seen a widening between the firms that really are leveraging technology and the ones who are failing to get off the blocks and that goes particularly for the midmarket, where progress this year has either been concealed or isn’t happening on any great scale. I’m still amazed at how many midmarket firms have little dedicated IT resource.
What also really jumps out are the number of IT teams that have effectively lost the innovation battle and that applies to the biggest law firms. The challenge of keeping the lights on and dedicating time to new tech means that a growing number of firms have split business as usual and innovation, creating a new infrastructure, with roles such as innovation manager on the rise.
In order for firms to really progress the innovation agenda there needs to be a coherent, joined up approach and we will be looking at how to achieve that at our Legal Leaders conference in Gleneagles at the start of March.
Next year we can expect to hear more of the alternative legal service providers that are taking over the back office of major law firms in order to help them invest. It would be a surprise if there are not more firms opting to float – we wait with interest to hear updates on DWF – as a means to invest in technology.
No summary of 2018 would be complete without a mention of the Big Four, which have had a huge year when it comes to legal services. It is no coincidence that our biggest story of 2018 was EY’s acquisition of Riverview Law.
PwC struck an alliance with Fragomen in the US, and in the UK KPMG has said that it plans to double its legal services capability to 3,000.
What the Big Four are doing well is providing clients with the Amazon experience, and we know from the sorry state of the high street how that story goes. Next year I have no doubt that we will see more clients moving their repeatable volume work to the Big Four, even if that work is fairly complex.
caroline.hill@liti.co.uk
Editor in chief, Legal IT Insider
