Is There a Difference Between LawTech and LegalTech?
Short answer, yes there is.
Simply put, LegalTech is a technological solution created for lawyers in law firms, businesses or corporations to help them simplify and automate their own operations..
LawTech is more disruptive, in that it aims to bring law to small business and people directly by enabling them to self-serve.
Lex Machina is a LegalTech technology that aids lawyers to get information about cases quickly and efficiently by providing information about judges, parties and opposing counsel which would otherwise be unavailable in traditional research tools.
Rocket Lawyer on the other hand, is a LawTech technology which provides online legal services to individuals and small to medium-size businesses i.e. to consumers.
In other words, LegalTech is designed for lawyers, whereas LawTech is designed for consumers.
So which one is best?
The story on LegalTech
LegalTech is using technology and software to help lawyers provide legal services more efficiently. This can make lawyers’ lives simpler and easier as it automates repetitive legal processes, dynamically creates documents and offers AI solutions to enable lawyers to see patterns that human brains can’t in order to be more effective in their jobs.
So what’s in it for the client?
If there’s one thing lawyers are known for, it’s their high cost. But the high costs the client needs to pay are not solely for the provision of legal expertise. In fact, in a survey released by Thomas Reuters in 2016 it was shown that administrative tasks take up a third or more of many a lawyer’s day. So a third of all costs are in fact for admin.
The field of law is plagued with administrative tasks and a need to perform extensive legal research for even the smallest of queries. These often repetitive tasks can easily take up a big portion of a lawyers’ time, which results in a lawyer spending a disproportionately small amount of time practicing law. These tasks include time reporting, billing, filing, document review, document assembly and project management.
Clients are not the only ones who are suffering in this scenario. Lawyers are highly trained professionals and so having to spend so much time on mundane tasks combined with applied pressure to bill for a minimum amount of hours a week, does not do wonders for the motivation. Solicitors must account for every 6 minutes of their time, which can be pretty stressful particularly when they are asked to bill around ten hours a day (no nine to fives here!) It is no wonder that solicitors have the highest burnout rate compared to any other profession in the UK. 32% of UK lawyer job seekers are applying for non-legal roles — up from 24% in 2007. More than a staggering 90% of junior lawyers say they feel stressed and under pressure at work, with more than a quarter describing stress levels as ‘severe’ or ‘extreme’.
Arguably, with the use of technology, lawyers can be freed up to do what they were trained for years to do: practise law, and in the process, charge their clients less as they need to spend less time on delivering their work. Clients do not want to have to pay for tasks that do not add value and so the use of LegalTech should in theory benefit the client in that lawyers can now charge less for mundane, non-value-add tasks.
But this of course creates a conflict.
If lawyers are becoming more efficient, how can they make up their billable hour target?
Well, the short answer is, they can’t.
So why would they use it?
Well, in law firms, they don’t use it as much as they could or should! LegalTech can help lawyers with many processes:
- Documents and data which may be stored, shared, reviewed and visualised;
- Documents which may be reviewed and data extracted using Artificial Intelligence;
- Collaboration and negotiation of documents by coordinating with parties involved, including third parties; and
- Automated legal analysis and drafting.
LegalTech is changing the way things are done but law firms are not queuing up to use it.
The only way LegalTech will make sense to the traditional law firm, is through a change of commercial model, and for most ‘old-school’ law firms, this isn’t looking like it’s on the cards any time soon.
So who would use LegalTech?
Is an In-House Lawyer the New Age Lawyer?
In-house lawyers are being asked to do more with less. So what does this mean exactly?
Unlike a law firm there is no pressure to recruit new clients as your client is the firm itself. So, you are not driven by billable hours because the law firm pays for your salary. In addition, your hours do not need to be as long as those in law firms since you have one client to serve. Does this mean that you work and learn less?
No. This just means that in-house lawyers do not have half as much administrative tasks to do on the job. Their focus is purely legal which drives them to produce an excellent standard of work.
New age lawyers are not simply motivated by a high salary, it is important that they are stimulated with what they do and what they produce is meaningful. In this year’s Europe Innovative Lawyers report they analysed in-house legal teams’ innovations alongside that of law firms. The results showed, that in-house lawyers not only demand change in the industry but often they are the ones that lead and create it.
So it is safe to say that in-house lawyers are developing new skills specifically in the technology area.
GlaxoSmithKline, a pharmaceutical company, helped build a research and development unit into a whole new business which will treat disease.. So what does this mean? Well lawyers at GlaxoSmithKline had to not only apply their legal knowledge but learn about healthcare and technology and apply it to their knowledge of intellectual property rights.
The legal team at CME Group collaborated with the Royal mint to create a blockchain based platform to trade digital gold.
What this means is that lawyers in this industry are proactive rather than reactive. It is clear that they are the future innovators of the legal world, they are open to new ways of working, new ways of learning and do not pigeon hole themselves into one area of law but rather adapt themselves to the technological changing market.
What is LawTech?
As for the real wave of change in the legal market, that is when LawTech comes into play. LawTech is more about helping businesses and consumers self-serve. The idea is for individuals to have a DIY legal product or legal service where individuals are empowered and enabled with the knowledge (which human lawyers would normally do), and they can actually get that from a machine instead.
Therefore, the distinction is that the technology of these LawTech businesses would for the first time get rid of the expensive administrative work, which they would be able to do themselves instead of relying on human lawyers by using automated processes which would enable businesses to avoid expensive administrative work.
To use a practical example traditionally to rent out a property you had to engage a lawyer to help draw up a contract and then set up an appointment with your tenants so that they can sign the document. Nowadays, DocuSign has become an everyday tool which provides a secure service where legally enforceable contracts can now be promptly signed online without needing to engage in the help of lawyer or schedule an appointment.
LawTech is a way of delivering law as opposed to supporting legal services. LawTech start-ups cater for clients from all industries in giving legal advice to the client. LawTech is hence, not law firm centric.
The rise of Alternative Business Structures (ABSs) have marked a new legal culture who have coined the term as ‘digital disruptors’. ABSs equipped with IT expertise, use DIY law tools to offer legal advice to small businesses, who would have instead relied on solicitors. Some popular DIY law tools are Rocket Lawyer as mentioned above and chatbots like DoNotPay, a tool that has the ability to challenge parking tickets.
Since Rocket Lawyers provides online legal services, account holders have access to online legal forms which are custom made by answering fill-in-the-blank questions. Moreover, this legal document can be regularly updated with the current law by Rocket lawyer. Therefore, LawTech is argued by some that such a platform is created by lawyers and hence it is still a service provided by lawyers. However, a counter-argument to this is that the start-up is still delivering substantial legal services that is related to technology, by making it accessible to all account holders and empowering consumers so they themselves ensure that their documents are legal, instead of relying on solicitors.
This naturally takes us to how LegalTech is different to LawTech. In this scenario, as opposed to the use of LawTech, the consumer is not relying on the solicitor, and the solicitor, in this case, is the service that provides the technology.
Once the distinction between LegalTech and LawTech has been clarified. There are two main camps of varying opinion when it comes to this legal technology discussion.
On the one side you have lawyers who would rather halt this technology as they believe that this will eradicate their jobs and on the other end, there is the opinion that yes software will displace tasks of lawyers but rather than being fearful of this, it is an opportunity for lawyers to use their education for much more meaningful work instead.
So, although speculation is made as to this hindering the job prospects for future lawyers, this would for the first time since the dawn of time create the ability for lawyers to reinvent themselves and make the practice of law more efficient and less expensive, whilst giving them more time to fully apply their mind and produce the best results.
However, it cannot go unnoticed that these two terms although headed in the right direction are still in their infancy. For law firms to have enough money to adopt such technologies, for lawyers to change their traditional mindset and adopt this new approach, and for clients themselves to also trust online platforms instead of human interaction will all take time to emerge in the industry.
Hybrid for the future?
Thus a quick solution, for the time being, would be to create a hybrid of both, so that LawTech and LegalTech can coexist with one another and both lawyers and consumers can continue working together in a more efficient and cost-effective manner.
The aim is to enhance innovation, and in both fields the driver is technology. This hybrid would therefore try allow for consumers to use this technology that LawTech provides, like DocuSign, to do the tasks which are administrative in nature, enabling lawyers to be truly innovative in their use of their time much like in-house lawyers.
This would inevitably mean a ditching of the traditional billable hour model. As such, lawyers would be able to make use of LegalTech in all of its functions, whilst also implementing LawTech to give aspects of law to the consumers hands, giving back the ‘real’ legal work to lawyers to focus on producing efficient results.