For a long time, the word “legal tech” seemed an oxymoron. 20 years ago, if you asked a lawyer “how do you organize your documents”, the answer was mostly likely “folders”, if they didn’t mean literal paper folders . However, the world has transformed. As technology starts to creep into the legal world, we have seen hundreds of startups mushrooming in legal tech, many of whom raised tens or hundreds of millions. According to this article, in 2019 alone, $1.9B was invested in legal tech. What are the trends in legal tech?
1. The front runners are e-discovery related tools
Smart lawyers or engineers (or lawyer turned engineers) quickly found the previous discovery model where you have paralegals or young lawyers read and tag documents and emails are antiquated. By using machine learning and artificial intelligence, the e-discovery space is the first to innovate and transform and where AI and ML are the most prominent.
2. Contract review and legal research tools
Second to follow suit are contract review and legal research tools. Although the law is complex, they are, after all, words that follow certain patterns. Using AL and ML, instead of having lawyers reading through each provision, now you can easily research, gather and tag relevant contract languages and relevant legal documents using SaaS. As a matter of fact, our friend at Appinventiv cited e-discovery and contract review as the most used applications in legal tech.
3. CLM and practice management tools are on the rise
The most modern law firms and the in-house departments of modern technologies companies also discovered there are better ways to work. You can store your contracts, tag them into different categories and even negotiate contracts with other parties using online tools. You can take in clients, start marketing campaigns, manage the bills and track lawyer’s billable hours using more sophisticated software.
4. Smart people have found niche areas to innovate
Not long ago, I received a parking ticket and decided to try DoNotPay. It worked like a charm. Granted, I paid them $30 for a year of service, but that’s better than paying the $75 ticket. More importantly, I didn’t lift a finger, other than uploading the few pictures I took at the time. I didn’t have to fill out a paper form, find a stamp and mail in my contest. There are apps that can help you notarize online. You can draft your wills and fight your delayed flight claims online. As the millennials continue to live a digital life on phones and computers, there are legal related tasks where now you can just text, chat and get resolutions.
5. The legal marketplace still needs disruption
While there are a few forward thinking websites where you can post your legal questions or try to find lawyers online, the space remains to be confusing, complicated and daunting. Why pick out a lawyer from a 100+drop down menu or write up a lengthy summary? Worse yet, you still need to wait to hear back, and have to talk on the phone! Who wants that? Why not just chat online and get connected to the right lawyers online, immediately! The legal marketplace still needs to innovate with machine learning, artificial intelligence, and big data. This is where we come in. We are the unique combination of legal tech and AI.
Leveraging CBinsight, we created this map of the most funded legal tech companies. Although we are still a very early stage startup, we are hoping to be the center stage of legal tech, soon!
Disclaimer: the below is our categorization and understanding of the legal tech landscape. This is our personal, subjective opinion. This is not a representation of any warranty or claim for scientific research methodology.