The legal services market is not known for innovation.
Over the last few hundred years, participants in this $800bn industry have enjoyed high margins, hourly fees and an elevated social status. Because there has been little economic incentive for innovation and, perhaps, because lawyers are risk-adverse by nature, things have not changed much.
But over the last few years, a wave of technological innovation has flooded the legal sector. $250m of investment was poured in in 2014 and this amount is growing fast, not only on the West Coast, but all around the world. Indeed, like fin tech before it, this innovation has even been given its own mantra: ‘legal tech’.
Legal tech startups have started to address some of the most significant pain points in the user journey, mostly by leveraging the cloud.
There have been some notable examples. DocuSign (recently valued at $2bn) and HelloSign have revolutionised the way we sign contracts, UpCounsel and Avvo are helping to connect businesses with lawyers online and Clio and Apperio are helping lawyers and clients make better decisions.
In a world where all but the most innovative of lawyers operate in a world of Microsoft Word, email and opaque billing, there is much to be done. And there is no doubt that cloud-based players like those mentioned above are having a marked impact on the lives of both lawyers and clients.
But what will the next generation of startups look like?
It is hard to overstate the role that artificial intelligence is likely to play. As techniques like natural language processing and machine learning become more and more mainstream, and accessible, we are likely to see increasingly meaningful applications of AI.
This is happening already. For example, Beagle is making the contract analysis process less painful, Ravn is helping lawyers understand unstructured data in legal documents in contract review cases and Ross uses the IBM Watson to aide the time-consuming process of legal research.
At Juro, we are taking this innovation to the world of contract workflow, giving legal counsel the data they need from contracts at the point they are getting contracts agreed. We think this is useful because in-house lawyers currently have to spend huge amounts of time building and adapting standard templates, finding precedents and often have no visibility into negotiation patterns.
We say that technology, underpinned by AI (such as natural language processing and machine learning), can do lots of this work. Good lawyers have nothing to fear from startups like Juro. Indeed, many will benefit from our technology, which should make their lives less about process (which most are not interested in) and more about legal analysis and judgement. Which is what they are trained (extensively) to do. In a fixed fee world, this can only be a help.