Legaltech — the Digital ®Evolution
Even lawyers are not immune to technological change. Legaltech describes the use of modern, computer-based, digital technologies to automate, simplify, and — it is hoped — improve legal discovery, application, access, and administration through innovation. Looking at the pace of technological advancement, the next five years are critical for law firms to adapt to the new environment. The digitalization of recent years has not left law firms unscathed and has significantly changed the day-to-day work of lawyers. However, the consequences of the current challenges will be much more profound.
The U.S. is (arguably) home to the most startups in the industry. In Europe, broader interest in legaltech has only recently emerged, but it is growing strongly. Although there are many white spots on the map, it can be assumed that this is a global phenomenon, especially since many startups are not necessarily tied to one jurisdiction with their service. Overall, however, reliable industry figures are lacking, so it is difficult to make a generally valid statement. The very heterogeneous business models of the startups make this even more difficult. However, the size of the legal services market fires the imagination of investors and founders alike.
Some legaltech companies are taking advantage of so-called machine learning technology, which is designed to ease or remove labor-intensive processes for lawyers. Often, for example, the review of contracts for certain clauses and their summary is part of the legal due diligence in M&A transactions undertaken by associates or paralegals. The use of such technology can contribute to significant time and cost savings here. So far, the technology has been limited to pre-filtering information according to certain criteria, leaving the actual analysis to the lawyer.