Introduction

Legal Technology or ‘LegalTech’ essentially refers to the use of technology or software to aid legal services.  The aim is to improve efficiency and reduce costs and time taken, especially for routine tasks such as document review, etc. 

The general consensus is that technology and innovation is now a necessity rather than choice, in every professional field. However, the legal profession has been slow to adopt innovation, and has generally been resistant to change. Researchers from Oxford University found that the adoption of A.I based legal tech is abysmal in law firms in the United Kingdom. Only about 25% or so adopted any form of A.I-based technology, 16% applied A.I tech to due diligence, 12% for assisted review.

While there is a wave of change in the legal sector especially due to client demand, a perusal of data like the one mentioned above shows that the legal profession is reluctant to adopt legal tech. This despite the fact that adoption of legal tech would provide for an array of benefits, including accessibility to justice. With that background in mind, this paper attempts to analyse the reasons behind the reluctance of law firms for adopting legal tech. 

For ease of understanding, this paper has been divided into two parts: The first part provides a brief background to the need for and emergence of legal tech, and then delves into the social and technical challenges its adoption posits. The second part provides challenges in the legal system that hinder the adoption of legal tech and then discusses the potential that legal tech has in increasing accessibility to justice. The paper finally concludes by discussing how A.I could be more ethical, and the possible solutions to the challenges that are posed.

Background

The author broadly classifies three reasons or challenges for the non-adoption of legal tech by law firms- social, technical and ethical. These are the social nature of lawyers and the legal profession, the technical nature of the adoption required, and the ethical or legal considerations of adopting legal tech. 

In a study authored by Brooks et all published by Cambridge Journals, (hereinafter, “Brooks et all”) it is seen that the general pressure to change the legal sector mainly comes from clients. Large law firms have more expensive billable hours and thus, clients push for more innovation to cut costs and generate more value for money.  The study also finds that while A.I and legal tech will not directly affect the work that can only be undertaken by lawyers- the thinking, analysis, creative problem solving etc.- for a few decades, it will affect the work at the bottom of the pyramid. This includes the mundane tasks like document review, contract management etc.  It is also seen that in the UK specifically, the drive to adopt legal tech was started due to the emergence of Alternative Legal Service Providers i.e., non-law firms that were able to provide legal services such as IP management, litigation support, contract management, investigation support, document review, e-discovery and other specialised services, usually at a lower cost and on tighter timeframes than in-house teams. Such a shift acted as a catalyst for the disruption of ‘traditional’ legal services, especially because it was competition for law firms that came not from within the legal community.

Despite the emergence of such competition, law firms are hesitant to undertake the transition to the adoption of legal tech. This paper provides an analysis on the same, with the challenges broadly divided into social, technical and legal.

Social Challenges

Lawyers are risk aversive by nature, and since law as a profession is reactive in nature, risk aversion becomes a norm that seeps into everyday practice. Thus, when it comes to the adoption of technology too, law firms are reactive to market changes and client needs instead of anticipating the changes and adaptions. Brooks et all also found that lawyers, in general, believe that legal tech and A.I is not intrinsic to the work undertaken by them, and the changing trends aren’t applicable to them. This especially since the established norms and legal culture ends up creating lawyers who are extremely autonomous and not inclined to being managed- the risk aversive nature also means that there must be a high probability of success and rewards in undertaking disruptions that change the status quo. 

The status quo also operates on a system of billable hours, and this means that the focus is profitability and not a drive for innovation.  This also translates to the partners’ concerns extending only to how the work will be delivered and the resources to be employed for the same. The lack of incentives from the leadership to employ systems that challenge this status quo also stems from the fact that increased efficiency means decreased billable hours. This despite a global movement from civil society to increase efficiency in order to increase accessibility to justice. Lower-level employees too fear the loss of jobs due to the adaptation of legal tech, which means they are less reluctant to effectively utilize the technology, or propose such changes. Thus, throughout the employee pyramid of the law firm, there is little incentive for lawyers to adopt legal tech, beyond meeting client expectations. Brooks et all propose that innovation teams can be the solution needed to get out of the rut of slow adaptation, by accounting for risks and accurate client needs for legal tech. However, they too are dependent upon the top-level management, thereby necessitating a trickle-down change in mindset from above. 

Technical Challenges

Technical challenges mainly refer to, inter alia, investment risks, lack of technical skills and technological challenges that law firms would face in adopting legal tech. 

Thompson Reuters posits that before adopting new legal tech, law firms first need to consider a gamut of factors. This includes the actual cost to the organization (opportunity costs etc), range of desired outcomes for the organization, and, tolerance for ‘adoption risk’ which includes the time taken for the adoption, the uncertainty of success and of compatibility, and ability to remediate.  Similarly, Deloitte in its report mentions the general considerations before adopting legal tech that a firm must undertake. These include strategic alignment (i.e., is the legal tech in line and suitable for the operating function of the organization), the right team (i.e., the legal team’s existing knowledge and expertise must be blended with specific IT expertise to ensure optimum choosing and subsequent functioning of the legal tech), ensuring effective implementation and the ability for ongoing maintenance. 

Technological compatibility with the legal tech can be divided into two parts. The first being the general lack of technological skills with the employed force, and the second being an incompatibility of existing technology employed by the firm with the adoption of innovation requirement. 

Lack of legal skills often means that firms are not equipped with the trained personnel to manage and engage with legal tech. The key to addressing this issue is to bridge this gap, and firms oftentimes need to create ‘hybrid’ positions like legal knowledge engineer, legal technologist etc. 

Technological incompatibility can be addressed by ensuring the software and technology that has to be integrated is the right fit.  An additional issue that firms may face is interoperability,  i.e., the problems that arise when small and narrow changes are not compatible with the broader framework of the organization and technological goals. When this is not resolved then the data is not fully optimized, leading to a low success rate of the transition. 

Another challenge, which is tied to the social nature of the legal profession, is that adopting legal tech requires a huge investment, of time, costs as well as a risk of failure.  Because of this, a lot of firms do not wish to adopt legal tech, and when they do, the disruption must be justified by a very high positive impact.  This uncertainty of a high impact is a further deterrent to the adoption of legal tech. The organization of the data so as to effectively engage with the legal tech is a very time-consuming process in itself- at times organizing the data to be analysed by the legal tech could take up more time than the analysis itself. Unorganized or inaccurately organized data affects the quality of the work and opens up the firm to negligence claims if undetected.  

Thus, technical challenges to the adoption of legal tech form a major portion for the lack of adoption of legal tech. 

Conclusion 

Legal tech has the potential to revolutionize the legal industry. However, the profit-driven goals of law firms, coupled with technological incompatibility pose major hurdles for firms to adopt legal tech. Given how competitive the legal field is, law firms tend to prioritize profits, and while legal tech increases efficiency it reduces the billable hours. Moreover, unless there is a guaranteed high return, lawyers deem it too risky to adopt new legal tech. 

This, despite the fact that legal tech would greatly increase efficiency and ensure greater client satisfaction.

The second part of the series delves into discussing the legal challenges, legal tech’s potential for ensuring accessibility to justice, and how A.I could be more ethical thus enabling its adoption.