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I L T A N E T . O R G
be as free to innovate because it is still figuring
out what needs to be done and how to do it. This
tension also plays out on the micro level with
individual lawyers in firms. The junior lawyers—
commonly thought of as the most tech-friendly—
are often consumed with learning the law and
the job, such that they are less able to appreciate
and embrace innovation. As a result, it's often
the experienced, more senior associates who are
the real innovators. These established
practitioners know the law, understand
the necessary results, and grasp
innovation's value in reaching those
results more quickly and efficiently.
Competitive Pressure
Countering an established legal
market's inertia is one of the most
significant innovation drivers: business
competition. Competitive pressure is
perhaps the primary driver of innovation
in the UK legal market, which has had
to grapple with the Big Four accounting
firms, among others, ever since the
passage of the Legal Services Act 2007.
The Act allowed external ownership of law
firms, known as Alternative Business Structure
(ABS). That pressure has led to some widespread
practices, such as firms developing consulting
arms to aid clients with legal technology. In a
recent example, Mishcon de Reya has launched
its consultancy, MDRxTECH, to "provide clients
with digital transformation advice and legal
engineering services."
The competitive picture is similar in India.
A part of the market is dominated by legal process
outsourcing firms (LPOs), and independent
practitioners and law firms must decide whether
they wish to compete or collaborate. Komal Gupta,
Head of Artificial Intelligence and Innovation
for Cyril Amarchand Mangaldas (CAM) in New
Delhi, explains, "LPOs are a class apart in using
legal technology because their outsourcing work
is only possible through technology. Their lawyers
are always going to be tech-savvy, and that's driven
some changes." In response to the competitive
landscape, CAM has adopted dedicated technology
for contracts and due diligence review, eDiscovery,
and legal research, as well as proofreading and
document automation.
In other emerging markets, there may be
a question of who firms should consider their
competition. For example, Truter says that in Africa,
"The majority of our customers are international
clients that operate with the best international
law firms, so that's who we benchmark ourselves
against. That's why we're trying to be first movers
with AI, transaction management tools, and other
innovative approaches."
Jumping over an ocean to Australia, similar
pressures are at work. The legal services industry
there is valued at $21 billion and—due to the
rise of legal services provided by the Big Four
accounting firms and disruption from more
agile, streamlined "NewLaw" firms—has become
intensely competitive. This has led
to intense pressure for innovation
and legal technology. While many
Australian firms are taking a cautious
approach, Australia's thriving legal
tech startup scene enjoyed more
than $1 billion in investment in 2018.
Sandler notes, "Culturally and from
a legal system perspective, Australia
is well placed to take advantage of
startup and legal operations growth
in these geographies, and we have a
competitive legal market with few large
players, which forces many to engage
with innovation and transformation.
As such, I think we are seeing a strong
focus on innovation in Australia within law firms
and are starting to see in-house teams really focus
on this as well."
Investment in Innovation
Unfortunately, despite the availability of legal
technology offerings, legal departments across
Australia tend to underinvest, allocating only
4 percent of their internal expenditures to
technology. Without investment, innovation
can stagnate. Conversely, with the right strategy
"Competitive pressure
is perhaps the primary
driver of innovation in the
UK legal market."
