Also this year, we learned that Atrium – the combination of a law firm and a legal technology company – had raised $65 million, followed by news that enterprise legal services provider (aka LSP) UnitedLex had received a significant investment, described as «one of the largest transactions with a legal services provider to date.» Another notable shock came in June when Thomson Reuters announced the departure of Susan Taylor Martin as chair of the legal agreement and her replacement by two co-chief operating officers, Brian Peccarelli and Neil Masterson. In the legal market, companies are increasingly imitating this strategy. Perhaps the best-known example of this is Clio, which in 2017 announced its goal to move not only practice management to the cloud, but also legal practice in all its facets, with its platform serving as the hub of an ecosystem for law firms through integrations with a variety of partners. This year, it went even further by acquiring an integration partner for the first time, hosting a $100,000 competition for the best new integration partner, and announcing plans to launch its own incubator. The use of the latest innovations in the fields of legal technology and regulatory technology – law tech or reg tech for short – will not only change the centuries-old legal profession, but will also allow people to conceptually change their interaction with the law. And it will impact billions of people around the world. This sentence sums up well the state of the entities formerly known as APL. Since ethical rules prohibit private companies from investing in law firms, we have companies that have developed sophisticated and extensive operations that do anything but explicitly provide legal services. And then they do organizational acrobatics so that they can also be effective in the legal services industry, like the Elevate/Elevate Next relationship announced earlier this year, which is supported by the recent acquisition of LexPredict. It was a year in which investments in legal technology reached $1 billion. True, half of that amount went to a single company, LegalZoom, and was a secondary investment. Nevertheless, as I wrote earlier this year on Above the Law, this indicates that big investors are no longer snubbing legal technology.
According to Bucerius Law School and the Boston Consulting Group in their study How Legal Technology Will Change The Business of Law, there are three main types of legal technology: For example, blockchain will profoundly change the way real estate is bought and sold. If you want to buy a home today, you will need to consult a lawyer or notary, depending on whether you are in a common law or civil jurisdiction. This person will do some checks, for example, to make sure that the house you are buying belongs to the seller, but also to verify that the title you are buying is free of mortgages, liens and other charges. This process is as costly as it is inefficient. And that`s not even the biggest problem. In many parts of the world, the legal title may not even exist. According to the World Bank, 70% of the world`s population does not have access to adequate land titles. To put it in economic terms, some experts estimate that the capital value of debt, where people do not have access to legal claims to land, house, car and other assets they own, is about $20 trillion. This puts people in a vicious circle of poverty, as it means that many people cannot borrow money using the land or house they have as security. They could also lose the roof over their heads that they believe they have paid for and own. They are at the mercy of corrupt officials who are bribed to change land titles.
Each of my year-end summaries gave a nod to the growth of artificial intelligence in the legal field. In 2013, I said that lawyers were finally realizing that AI could be an ally, not an enemy. In 2014, I said that AI is finally accepted as essential and banal. In 2015, I found that AI had become common in e-discovery and had moved to legal research. In 2016, I said that the legal industry had finally become smart when it came to AI, with its use skyrocketing. Once a technology has become ubiquitous enough, we stop calling it «technology» in the first place. Well, if that was the year the industry got smart about AI, that`s the year AI got smart about the industry, so to speak. This once-young technology is now one of the most dominant technology companies in the legal industry. Just look at where the investment money goes and how big that investment money is.
Of the $1 billion invested in legal technology this year, $362 million went to companies whose products use AI, according to LawGeex. Each of these categories has a rights-specific tool and a market leader widely used in a different industry. As lawyers, it is important that we recognize when a tool written for the general public is better than a tool developed by or for lawyers. The answer is not always obvious. While this taxonomy mostly deals with tools for use by people working with litigants, legal technology also plays an important role on the court side. The spread of technology and law is changing legal technology to have the potential to break the law, and it can become a way to talk about the exploitation of the legal system, as this is an emerging area. [8] What do you think of the most important developments of the year in legal technology? Add your comments below or share them with me on Twitter (@bobambrogi). There are more than 1.3 million licensed lawyers in the United States. This doesn`t even include the large number of paralegals and supervisors who do much of the monotonous and time-consuming work. Numerous studies over the years have attempted to predict the impact of legal technology on lawyers. Some suggest that a modest number of legal jobs will disappear, while other more extreme studies predict the structural collapse of law firms. The reality is more nuanced than that – many jobs will disappear because many of the monotonous, regular, and time-consuming jobs of lawyers will disappear.
But technology is still a long way from disrupting some of the real value-added work lawyers do, such as strategizing, negotiating, making reasonable judgments, or even visiting a client in prison. New jobs are also being created – think smart contract lawyers or regulatory data scientists. The next generation of legal talent must be prepared for these roles before this new reality. Factors driving innovation in the legal services market include: Kodak had the knowledge and power to use a digital camera and sell it in the late seventies. When Kodak executives learned about the invention, they told the two employees who invented it, «It`s cute, but don`t tell anyone about it» because it was film-free technology. Unfortunately, we will never be able to put the technological genius back in the bottle once it has been unleashed to preserve the old model. .