Things are going well in legal tech. According to thia 2018 legal tech trends report, as of November 2018, 899 legal tech companies existed worldwide. That is an increase of 32% compared to 2017. Investments are also increasing to stand at almost 700 million US dollars, while the technologies have become more refined. It is even possible to trace a veritable breakthrough in the press's attention to subject these days. The fact that this major breakthrough came in the year of the big tech-lash and the year where GDPR put privacy op top of the agenda proves that the development is both strong and lasting. The question is, what comes now?
There is no shortage of futuristic scenarios and more or less speculative revelations about the destiny of the legal profession. And while some of these crystal ball epiphanies becomes a bit tedious, our Danish short-term predictions of the Legal Tech Trends in 2019 were such a success that we have decided to make an updated Nordic version in English.
We have gathered some of the key players in the digital transformation of the legal industry from Sweden, Norway, Finland, and Denmark to get a more complete perspective on Nordic legal tech. All contributors have answered the simple and yet urgent question:
"In 2019 we will move from hype to reality when it comes to legal tech. What first appeared to be a great opportunity for all law firms, from the boutiques to the giants, is starting to look different. In-house software development or the maintenance and support of any legal tech tool is not in the core DNA of law firms. At Dottir, clear emerging legal tech trends that we see include increased general interest in legal tech, law firms moving to cloud based services (to address mobility and remote working demands from their staff), the rise of fully virtual law firms, and increased digitisation of the work in courts and litigation. We also see the rise of various market place platforms offering legal services, together with other business consultancy services.
However, thinking a little bit outside the box, the biggest trend in legal tech in 2019 might also not really involve technology at all.There are several legal tech solutions in the market with great potential, but to be honest, most of them are currently not very user-friendly or engaging. Legal tech is still lacking the Slacks and Typeforms – well-designed and easy-to-use solutions that truly make everyone's life easier. Focussing on client-centricity and applying a human centred design approach to legal tech might change this. This approach demands that the users’ intellectual, social and emotional needs, wants, goals and desires are identified first and used as a basis to design and develop great (legal) tech solutions. Tech should never be done only for tech’s sake. Using both tech and non-tech solutions could ensure that law firms improve their ability to truly know their clients’ preferences and individual circumstances, which would in turn allow them to better serve their clients with top-quality services. Maybe this should be the biggest legal tech trend in 2019. We would start seeing and using legal tech solutions that the users really like and enjoy."
"Data is becoming more essential due to the increase of analysis and data-driven solutions in the legal market. Therefore, data security, privacy as well as confidentiality related issues will become more important. This year will bring a focus on not only capturing and using data but also protecting it. As a result of this, many law firms will take enhanced cyber security solutions into use especially shifting from on-premises to the cloud. With regard to the legal tech market, a large amount of investments have been made to the legal tech sector during the previous years and the number of different solutions in the market has risen exponentially. We will see acquisitions and mergers as a vendor strategy to deliver more integrated solutions to the law firms. However, wrestling with different platforms and applications, and risking error with duplicate data entries will remain as the main concerns of the risk management and the user point of view."
Simonsen Vogt Wiig
"We expect a lot from legal tech and there are many promising trends: Our standard documents need to be automated, our standard complex processes need to become self-service, the 'standard' high volume processes need to be optimized using machine learning algorithms. That is what many firms are doing right now, and we are all learning by doing. If I as CDO would disregard my 'users', I would say that these processes need to be offered to the customer community via a platform and if we think one step further than that, that these services and contracts could be offered via blockchain. These sentences are very marketable and trendy, but we probably gain the most of making sure that all core applications are used optimally, that people can work via different devices in the office as well as remote in a secure way. And that these legal tech applications will function amidst our standard portfolio of applications.
Another trend that we see is that a lot of special applications arise that facilitate the legal process, like speech-to-text, translation software, advanced comparison, touch and display software, to name a few. Different lawyers and practice areas have different demands and it is also legal tech to make sure that the core applications and these special applications work in an agile connected way and use the cloud where possible. I think therefore that a cloud-ready, flexible platform is a prerequisite to be legal tech."
"We expect to see solutions that are easier to adjust to different scenarios and solutions with better and more open integrations that enables ecosystems of programs. Today we see a lot of similar small software companies delivering services that has been developed to address a specific need of a specific lawyer or law firm. These solutions work very well in these scenarios, but law firms need to many of these solutions to cover their needs. Also, law firms are still in the first wave of utilizing new technology. They have started to use and adopt technology, but are yet to change the way they work and deliver their services. In order to extract the full potential lawyers need to change. Law firms that do not will slowly become more and more inefficient. We see a lot of solutions that make the current way of working more efficient, but not yet all that many that tries to deliver legal services in a different way. True innovation lies in delivering value in new ways. Next generation client portals is an example of a domain where we expect to see some major changes.
"Up until now, legal tech has been a hype for many. It means that legal tech is something that a lot people talk about, but do not quite know how to use. Lately I have seen a maturation in the industry, at least here in Norway, where several law firms have begun to use legal tech in order to streamline some of the more ordinary tasks. I think, and I may not be completely unbiased, that 2019 will be the year where most people will use document automation. It is perhaps the most basic tool for lawyers to start using without having to change their habits too much - at least if they use Lexolve.”
“The hype surrounding AI will keep building up, fueled by a better access to “tangible” applications. Expect more cooperation on large projects between laser-focused LegalTech companies, each doing its part but doing it well. For the first time, prototypes of legal AI “rewriting” legal documents will be developed, built upon the well-tested document review infrastructure. These prototypes will prove themselves useful fast, although they will still be inaccurate in 10-15% of the time and limited to a specific document type. New kinds of neural networks and data extraction techniques will be developed, which means the increase in patenting of LegalTech applications. “Automation is not AI” discussions will be more frequent not only because of the widespread proliferation of legal AI solutions but also due to the shrinking gap between what used to be programmed explicitly (automation), such as key data extraction using hard-coded patterns, and what can be “figured out” on its own (machine learning). With new techniques and types of neural networks developed, the need for hard-coded software will decrease over time, with automation being gradually replaced by self-sufficient AI tools.
The pace of disruption will accelerate. Traditional legal markets will be heavily influenced by successes in neighboring jurisdictions which are more innovative and adaptive to change. Unwieldy LegalTech landscapes will become more vibrant mostly with the help of outside actors, who already have a good track record in practical innovation in their home markets. How close the above predictions are to reality – time will tell. For now, what we can know for a fact is that a neural network’s main function for making a decision is usually named “predict”.
"We expect the legal tech trend in 2019 to be a move from hype towards realistic solutions. For that reason, we also expect the focus to move towards the more low-hanging fruits through digitization of work processes and standardised counselling. Simultaneously, we will also begin to see concrete examples of AI in use, and these solutions will reflect a more realistic level of expectation in relation to the use of AI in legal tech for the next 3 to 5 years. We expect a the number of Danish legal tech companies to grow within new business areas. However, we also expect that a number of the many solutions developed in connection to GDPR will disappear from the market during 2019."
“In continuation of last year's focus on personal data and data ethics, the use of data will also be the most important topic in 2019. First and foremost, because accurate, truthful and complete data is a prerequisite for artificial intelligence and machine learning to function in the legal industry. Secondly, we need to focus on the fact that digitisation and technological optimisation must take place in a responsible manner that supports a democratic society. Here, the quality of one's data and, not least, the processing of it, is a decisive factor. The legal industry is going to play an important role ensuring that the rule of law and the democratic mindset is incorporated into the digital transformation of society. Since digitisation must take place in a responsible manner, so data ethics will also be a key concept in 2019. The large investments in 2019 will also reflect this."
"I think the legal- tech market is going to be characterised by an increasing degree of convergence. So far, most solutions meet a single need but they will now be gathered in larger setups. Many legal tech solutions have begun by refining a single feature. They will have to take a closer look at how their solution relates to other tasks, solved by other program - some of which will foster collaborations or be acquired, others will be built as whole products themselves. In general, we will begin to see more solutions that cover more than one flank, we will also see more acquisitions and a general consolidation of the market. In the long term, you will either eat or be eaten; so you need a well-developed roadmap as a legal tech supplier. It may well be that you are best at A, but there will be someone that also covers B and C; and why have several systems when you can have one? By the end of 2019, I believe we will also begin to see the first steps towards some real cases where Danish lawyers succeed in using machine-learning-based systems for legal task.
"In recent years, legal tech has primarily been about streamlining internal processes. Now the time has come to focus on the external, namely, how the law profession engages with their clients. I expect that the client-centric development will accelerate in 2019 with an increased use of digital platforms, alternative payment models and new legal products. I believe that the most sought after solutions will be those that can support lawyers' client relationships by facilitating communication, increasing transparency and adding insight to each other's business. Clients will get better insights to what the lawyers are doing, and the lawyers will get more data to make better decisions and deliver a more proactive service. It will improve clients' legal situations and increase lawyers' revenue so there are clear financial incentives to incorporate this approach here and now. I think it will be a huge boost for legal tech and digital transformation of the legal profession as a whole."
"Many of the major law firms have had an aggressive development strategy in recent years, but we are now gearing the business for an upcoming recession. We are going to look more at upscaling in insolvency, reconstructions, crisis management and so on. There will be a double agenda where we continue to make long-term investments in development, digitisation etc., while we also prepare ourselves for changes in the market demand in the short term. I do not think that 2019 is going to be a big disruption year. There are many startups that are trying to gain a foothold but the digital business models and services are still very immature, as is the technology behind these services. A few years ago we started working with artificial intelligence and process automation, and more people will join the movement in 2019. So, ; you have to decide whether you want to be 'first mover' or 'fast second'. It is time to make a digitisation strategy if you haven't already got one because there lies the answer."