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The Rise of Legaltech - what’s all the hype?

Written by Garth Watson
on December 14, 2016


Many are saying that #legaltech (if you're on Twitter) is where fintech was about 8 years ago. This was when fintech was just getting a name and where many fintech startups were, well, starting up. Today there are established fintech startups taking on just about every single division of large financial institutions. Legaltech startups are catching a similar wave.

This wave is breaking in London. Legal Geek boldly asserts "We are making London the best place in the world to launch a LawTech startup". Hype or no hype? Well, the Law Society got behind the 2016 conference, which was a resounding success, as did Freshfields and Thomson Reuters. Artificial Lawyer summed up the conference really well in this blog as did the Law Society Gazette.

Lawyers jobs threatened?

Many lawyers are concerned that their jobs may be under threat by the likes of artificial intelligence, machine learning, and natural language processing. Debates have raged on the impact that these technologies will have on the lawyers. Lawyers love to debate, and are paid to argue and give opinions. So these debates have been fun.

Technology has already impacted the practise of law. Think typewriters. And technology will continue to impact the practise of law. It will help lawyers in many ways and it will also help those who may otherwise have consulted a lawyer to help themselves. It will also give access to legal answers to those who would not normally consult a lawyer (both individuals and companies), either because of the cost or because of other factors.

However, the question, "how will technology impact lawyers?" is too broad. It helps to break the question down a bit. Not every lawyer does the same kind of thing, and lawyers in different stages of their careers do different things. Some lawyers are in house lawyers, and others work in the legal profession. Different types of lawyers will be impacted differently by technology, and so will lawyers at different stages of their careers.

For the reasons discussed below, we believe that lawyers involved with legal compliance and regulatory law will be positively impacted by this breaking wave of legaltech. We also believe that legaltech will positively impact anyone who needs to know the simple answer, to the often overly complicated question: "what does the law require me to do here, now?"

It's early days, but don't underestimate technology

We recently attended and exhibited at Websummit in Lisbon. "Where the tech world meets", they say. 70 000 odd people attended it this year. If you can beat the crowds, you can't beat it! There was a fintech stage, but there was no mention of legaltech... at all. The wave is breaking in London, but not yet globally.

Part of the debate around technology replacing lawyers has been that legaltech is some way off being able to do what lawyers do. The argument has merit.

The thing is, we are often surprised by exponential stuff. We underestimate it.

What is 2 multiplied by 50?

Of course you know that.

Now, what is 2 to the power of 50?

Are you surprised that you didn't know the answer? And are you surprised at how large the number is?


Computer processing power is doubling every 2 years. That's Moore's Law at work. So what will computers be able to do in 10, 20 or 50 years and how will they affect the practise of law?

We need to think a bit bigger if we are not to be surprised.

So how does this all apply to legal compliance and the practise of regulatory law?

Most law is not that complicated. It's seriously simple and clear

I'm a lawyer by profession. While practising I realised something. A lot of what lawyers do is "rules based thinking" and legal research. It's not 100% of the time that a lawyer is confronted with really difficult questions. Of course, difficult questions do arise and these questions require excellent legal brains. It’s just that this does not happen in all instances.

Most of the time the law, especially regulatory law, is as clear as day. Everyone can understand it. The problem is that the clear applicable regulation is often hidden and obscured in many different places, such as Section 19(1)(a)(iiii)(f)(e)(e)(s) of Dusty Statute, 1985 and Section 12(4)(f)(ffff)(h)(o)(u)(r)(l)(y)(ra)(te) of New Regulation You Need to Know, 2016.

The thing that makes this simple law complicated is that it is found in incredibly obscure places and it's often presented in impressively complicated ways. The clear law that applies to you is hidden amongst a whole lot of other law that doesn't apply to you. It only adds to the complexity.

Legaltech will help overcome this regulatory complexity. Everyone should know, in simple terms, what the law requires them to do in any context, and companies should be able to know, simply, what the law requires of them in any situation. Isn't knowing what the law requires of one a basic human right? Why is it so inaccessible to many?

At other times, law may be unclear, and its meaning may be contested, and argued. When the law is unclear:

  • disputes and arguments happen
  • lawyers are consulted
  • litigation happens
  • sometimes cases are reported in the media and dramatised
  • series like LA Law, Ally McBeal and Suits etc. are made, and
  • a whole body of law, the common law, based on these fringe disputes is added to.

This makes us think that most of law is complicated and unclear. It is not. Unclear law just has much better PR than the massive body of clear, simple law.

Legaltech, not lawyers, will be the guardians of regulatory law

Here come a few bold statements in line with William Gibson's quote: "the future is already here - it's just not very evenly distributed".

There are times when lawyers are needed. But lawyers should only be used when they are really required. When regulatory law is clear and simple, yet obscure, legaltech will have this covered. When the question, "is there any other legal provision out there that applies to our operations?" is asked, lawyers will not be consulted, legaltech will have this covered.

So if we asked the question more narrowly, "what impact will technology have on the practise of regulatory law?", given the above the philosophy of clear and unclear law, and given exponential nature of technology, including legaltech we believe that the first domain of law to be positively affected by legaltech will be the practise of regulatory law and compliance law.

Technology is great at rules based thinking, its great at memory, its great at recall, and it's getting better and better at learning rules and principles and applying facts to rules and principles.

Most of the time legaltech will be able to answer the question "what does the law require us to do here?" The result of this is that regulatory lawyers (both "in house" and in law firms):

  • will be able to focus on using technology to cut down on legal research and the hours of identifying applicable legal provisions for legal compliance, and may well be able to move to a more sustainable subscription based billing model by the implementation of legaltech for their clients.
  • will be able to focus on doing the work that lawyers are best at, and enjoy, namely giving considered opinions, value judgments and nuanced arguments in the instances where the law is unclear.

Sounds like a win-win.