What Is Legal Technology? (+How LegalTech Is Changing the Legal Industry)

Patrick Szakiel
Patrick Szakiel  |  June 11, 2019

The legal industry is famously slow to adopt new technology, so its digital transformation has therefore been slow to coalesce.

 One of the reasons for this glacial pace is that law firms make money based on billable hours. Any increase in efficiency means less pay for firms. But several things have led to a rise in popularity for legal tech. These include the increase in in-house counsel hiring, a massive increase in reviewable documents, the American Bar Association’s call for lawyers to stay abreast of relevant legal technological advances, and increased competition for clients.

What is legal tech?

Legal tech has been around for some time. Electronic records systems were the first types of legal technology, but the term has come to refer to the start-up fueled digital transformation of certain aspects of the legal services industry. 

Types of legaltech

There are several major types of legal software, which include everything from in-house legal operations products to social discovery tools. Each subset of legal technology serves a specific use case within the legal industry. Together, they provide comprehensive solutions for legal teams.

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Legal practice management software

 Legal practice management solutions operate many vital back-office tasks. These include document storage and sharing, CRM capabilities, appointment scheduling and more. In addition, legal practice management software often integrates with other back-office tools like accounting and billing software.

eDiscovery software

 eDiscovery software automates much of the document review process for lawyers. These solutions identify case-specific documents at higher accuracy rates than those achieved by human review. As electronic communications and their inclusion as legally admissible evidence increase the document load, eDiscovery is playing a growing role in discovery work.

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Conflict check software

 Conflict check solutions quickly scan whether a potential case or client presents a possible conflict of interest for an attorney or firm. The goal of these applications is to ensure that attorneys and law firms meet their requirements when it comes to professional responsibility.

Legal operations software

 Legal operations software is designed to manage in-house legal teams’ administrative and back office tasks. These solutions function a great deal like legal practice management software, but are specifically made to serve the unique needs of in-house teams.

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Legal research software

 Legal research applications provide a database of legal knowledge from which lawyers can pull information. Legal research solutions help lawyers build a case more easily by providing improved access to relevant information.  

Social discovery software

 Social discovery solutions search social media platforms for information relevant to specific cases. Legal professionals can create watchwords and triggers that allow the application to grab and save posts. The information is then stored as an unalterable record and is typically legally admissible in court as evidence.

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Legal billing software

 In an industry where billable hours are king, billing software is extremely important. Legal billing solutions automate much of the billing process. These applications will likely be able to collect time-stamped data regarding all client-related activities carried out within connected applications.


LegalTech conflicts

 Lawyers subsist on billable hours. Every six-minute block of time is accounted for in a lawyer’s day, and they have minimum billable hours they must meet. The entire goal of legaltech is to make lawyers more efficient, which means less time needed to carry out their tasks. Increased efficiency means fewer billable hours and more difficulty meeting the minimum set by their employer.


Lawtech v. legaltech

 Within the legal technology sector, there are two distinct subgroups of solution providers. One is legaltech, focused on enabling lawyers to do their jobs better. The other is referred to as lawtech, which is consumer- and business-focused technology. Lawtech’s focus is on creating self-service applications for end users to procure legal services and knowledge without having to hire a law firm.

 Examples of lawtech solutions include legal marketplaces, which consumers use to match with a suitable lawyer or law firm. Lawtech solutions also include platforms which consumers can use in lieu of legal services. These DIY, self-service law applications provide channels through which consumers can carry out legal tasks on their own.


LegalTech catalyzing the drive toward in-house counsel

 There is a trend toward corporations leaning more on in-house counsel to carry out the majority of their legal tasks. Legaltech, specifically legal operations software, helps these in-house lawyers to be successful. They don’t have to worry about securing clients or billable hours, and can focus on producing an excellent standard of work as efficiently as possible.

 Because they are not shackled to the billing practices of a traditional law firm, in-house legal teams are pushing for technology adoption, implementation and innovation. They want to do their jobs more efficiently and effectively, and legaltech can help. While lawyers at traditional firms may be reluctant to adopt time-saving technology, in-house counsel is quick to jump on the opportunity to become more efficient.


The future of legaltech

 In short, legaltech will catalyze the evolution of the legal industry; it has already begun to do so. As more portions of the legal profession are automated, the model will change. Already, corporations are looking to in-house counsel, consumers are looking to self-service digital legal kiosks, and law firms are arming themselves with AI-powered insights.

 Functionality like legal analytics, specifically judicial analytics (which analyze a judge’s prior actions and deliver strategic insights for lawyers) will start to have a large impact on the industry. Technical competence for legal teams will become an entrenched ethical rule for the vast majority of states, driving more education and more investment in legaltech.

 The legal profession’s monopoly on legal information will shift and the general public will take ownership of their interactions with attorneys.

Looking for legal technology solutions for your law firm or legal team? Check out our eDiscovery software category to parse through hundreds of user generated reviews and select the right solution. 

Patrick Szakiel
Author

Patrick Szakiel

Patrick Szakiel is a Research Specialist at G2 Crowd. He focuses on the vertical software space, with particular emphasis on the legal and education industries, and recently helped launch G2’s Greentech space. You can find Patrick on LinkedIn.