Legal Tech Summarized: What you NEED to know in 2021

In this first video of the #LawWiser legal tech series co-organized by LawWiser and our partner NEXL, Zolo Mundur, the CEO of Codelex Legaltech discussed the scope of legal tech and its importance in the legal sector with the legal technology experts from across the globe. Below is the script of her talk on Democratization/"Uberization" of the legal industry. Click here to watch the video on LawWiser.

DEMOCRATIZATION/"UBERIZATION" OF LEGAL INDUSTRY

I wanted to talk about a trend that I believe should be a part of the discussion of the future of legal tech and legal industry – which is the “Sharing economy approach or so-called “uberization”" in the legal industry.

WHY DID I WANT TO TALK ABOUT THIS TOPIC?

We’re living in a time of sharing economy. Many services and products we use daily are based on this model, including taxis, shopping, etc.  Sharing economy approach transformed the taxi industry in only a few years. And now that we already see examples of this approach in the legal industry, we should think about whether this approach has the potential to transform the industry and things we should know about it.

SHARING ECONOMY BASICS

As we know, sharing economy is a system built around the sharing of resources. The idea is to share the use of idle assets and services or to facilitate collaboration. Sharing economies allow individuals and groups to make money from underused assets. If you have an unused car, why not rent it to someone who doesn’t have a car but needs it? People sometimes call it the Just in Time/Just Enough approach. We are seeing the sharing economy in many industries, hotels, taxis, retail, finance, office rent, and so on. But sharing economy comes with its downsides, such as regulatory uncertainty and lack of oversight.

WHY SHARING ECONOMY IN THE LEGAL INDUSTRY?

Unmatched demand and supply

One of the key features of sharing economy is to put latent products and services to productive use, like Uber, so as to match the supply and demand, through some sort of matchmaking service. There are people who own a car and need more income. On the other side, there are people who need a cheap ride. Uber simply matched these people through their service.   

The delivery of legal services has a substantial problem with distribution. While there are many unemployed law school graduates, there are many people who face legal problems, but can’t afford lawyers. What a sharing-economy approach could do for the industry is to match demand with the supply by making legal services more convenient and affordable.

There is also more-for less challenge that. Clients are now less willing to spend, yet they expect more results.

Rise of legal tech startups and alternative legal service providers

The Legal industry and lawyers are traditionally accused of being slow to tech adoption and innovation. But, the rise of legal tech is challenging the old ways things used to be done for more efficient and cheap results.

Alternative legal service providers also playing an important role in this change. Before uber, we didn’t know that there could be better alternatives to taxi companies or that we could travel much cheaper. What happening in the legal industry is similar. Before innovative legal tech solutions and ALSPs, billable hours were the only choice. They gave alternatives to clients. They are also urging the legal industry to part with their old, inefficient, and expensive model.

Lawyers are not going out of business. They are not under attack here. But the traditional law firm model is and they are no longer the only game in town. We are already seeing a significant increase in alternative structures.

EXAMPLES OF SHARING ECONOMY IN THE LEGAL INDUSTRY

Matchmaking websites that connect lawyers and clients. For a client, the network would operate like a big law firm, able to deal with all sorts of legal or business problems.

ALSPs: Lexoo in the UK, UpCounsel, Priori legal, Axiom legal.

Another example of sharing economy approach in the legal industry is a lawyer-to-lawyer legal document marketplace Lexub that we’ve created. Lexub is like Amazon or eBay of legal documents.

I’m a lawyer by profession. Solo practitioners and small law firms have limited access to the internal knowledge base or services of big publishing companies or research databases. So, when they’re working on an unfamiliar transaction, they sometimes face the need to ask peers. On the other side, there are lawyers who have archives of quality legal documents that they can’t put to work. Lexub connects lawyers on the two sides of the transaction in an open marketplace. Why start from scratch when you can learn from the example of others?

THE FUTURE

Looking ahead, I think we will see more examples of sharing economy in the industry, and such services and products will not be limited by ALSPs or lawyer-client matchmaking websites.

The traditional law firm model will not disappear. However, because of the competition by alternatives, law firms must be more efficient, some people call it future-proof their law firms. Many firms have teams focusing on just that, to make their firm more efficient. Law firms should allocate some resources and consider implementing legal tech solutions that can help them work smarter, faster, and cheaper.

As for lawyers, they should keep an eye out for a more flexible and collaborative work style and know about the new career choices instead of working in law firms or in-house.