Are digitalisation and legal technology finally creating a global market for legal services? It seems so, as evidenced by the boom in legaltech. The legal services industry, worth $901 billion, has been slow to digitalize compared to other service industries like finance. However, the fintech wave is being followed by a shift to legaltech which is expected to be just as disruptive.
Current Developments
Recent initiatives in the industry have shown that legaltech can be used in many different ways. Ironclad is a US-based company that develops automated contract management software. This software helps legal service providers to review and document contracts. The cloud-based apps offered by Everlaw, a US legaltech company, allow workers to work together on legal projects more effectively. Evisort, Disco, and Luminance all have implemented AI to assist document analysis in rebranding the legal discovery process to ‘eDiscovery.
Many law firms use legaltech providers to manage client accounts and documents. Law firms are often behind the technology curve, which means that they have limited opportunities for legaltech. As an example, AI-assisted lawtech has a low acceptance rate but one that will undoubtedly rise in the future.
Many law firms use legaltech providers already, primarily for managing client accounts and documents.
Barriers to Adoption
There are still some barriers to legaltech adoption. These obstacles must be understood if digitalization of the industry is to happen. These are three key points:
Infrastructural changes Smaller law firms find it more difficult to practice legaltech because of the many changes that are required for a company’s infrastructure. These changes often require structural reform and budgeting that is beyond their capabilities. Partnerships with senior lawyers are a common way for small and medium-sized law offices to get funding. Partners may not agree with the idea of legaltech adoption.
Education needs Adopting legaltech can be difficult. It is also important to find someone with the technical and legal knowledge necessary to use the software. The quality of education is different across countries, so firms need to carefully consider where they should locate. Access to high-skilled workers, however, is essential.
Understanding: There are many complexities surrounding legaltech. Many people are not aware of the relationship between legaltech and client confidentiality. Some law firms resist legaltech adoption because they are familiar with traditional methods and see legaltech as unreliable and susceptible to error. This is evident from the low adoption rates for AI-assisted lawtech.
The Right Place to Live
Despite these concerns, legaltech is growing rapidly in key markets like Asia and North America. In Asia, 73% of legal service providers want to increase their legaltech adoption rates. However, the best location for Europe-focused law firms is likely to be Ireland.
With the highest level of STEM graduates per capita in the EU and high rankings in the share of employment within the knowledge-intensive service sector, Ireland is enjoying the fruits of its investment in high-quality education. Between 2014 to 2020, Irish universities saw domestic enrolment increase by 17.4%, with first-class honour graduates increasing to a total of 23.5%. Some 25% of Irish graduates are from law, business, and administration courses. This means that Ireland has the ability to supply a highly-skilled workforce for the legal services sector.
Despite these concerns, legaltech is growing rapidly in key markets like North America and Asia.
AI Investment and Other Future Technologies
To create a large, skilled workforce that can benefit businesses, the Irish government has made substantial investments in the AI sector. It is evident that the Irish government wants to be a center for AI workers. EUR700million has been committed to research centers, supporting 1,000 students to obtain PhD degrees over the past five year. another EUR100 million has been invested to support 700+ PhD students.
Ireland is the country with the most EurAI fellows per head. They also have the highest percentage of AI-using enterprises in the EU. The WEF regards Ireland as the AI Rising Star based on the quality of AI research and available talent pools. Ireland is a country that has the workforce necessary to help law firms transition to digitalisation.
European Union Membership
It is also a benefit for Ireland to be a member of the EU. The EU membership of Ireland is also beneficial. However, the EU is gradually harmonising laws across its member states to make it easier for law firms and other businesses to operate in cross-border settings.
IDA Ireland offers several services to make it easier for you to move to Ireland for work. These include visa and work permit fast tracking and inter-company transfer. These services are available to all high-skilled workers worldwide, not just in the EU. However, locating your law firm in the EU allows you to access 27 countries and 440 millions people.
Common Law Advantage
Common law can be more advantageous for commercial and business use than continental-style codified law. It allows for more flexibility and encourages innovation. Common law practice is a benefit, especially since the legaltech boom began in the US. It allowed legal firms to provide cutting-edge services to clients and worked hand-in-hand to the common law system.
Ireland is also unique within the EU as the only EU member state that has a prominent financial center that follows common law. This makes Ireland a great location for EU law firms and for anyone looking for access to the EU with a common law prerogacy.
These merits have been taken advantage by many law firms, allowing Ireland to foster a strong international legal community within its borders. Over the past four years, DLA Piper, Bird & Bird and Dentons have all established offices in Dublin.
Current barriers to legaltech are based on the limited digital expertise of law firms. The future will focus on creating user-friendly products that simplify legal processes. Legaltech could eventually open up legal services to everyone, with digital applications becoming more accessible than only the largest law firms. This should allow law firms to be free from their physical locations, which is a potential benefit for Ireland in the future.
Niamh Bristlin, Territory Manager UK
Shaftesbury House, 151 Shaftesbury Ave, London WC2H 8AL, UK
Tel: +44 02073 799728
Niamh Breslin is Territory manager UK for IDA Ireland. Based in the London office, she is . She assists UK companies in all sectors to grow their operations in Ireland.
Industrial Development Agency, (IDA) Irelandis a statutory agency that was established under the Industrial Development Acts of 1986-2019. This agency is crucial in attracting and keeping foreign direct investment to Ireland.