Legal tech refers to the use of technology software and solutions to support the legal industry and provide legal services. In an industry often considered dated and criticized for its use of traditional systems and methods, the development of the legal tech sector has revolutionized the practice of law worldwide. In 2021, the global legal tech market was valued at 18.4 billion U.S. dollars, with the market set to increase further in the coming years. An array of technologies are being deployed to provide legal services at a cheaper, more efficient, and improved standard. Artificial intelligence, natural language processing, and robotic process automation are just some of the tools used to facilitate this, both in business-to-business and business-to-consumer settings.
Law firms and in-house legal departments
Law firms across the world are now continuously being forced to consider ways of reducing their costs while creating new methods that are different from the competition is a further challenge. The introduction of legal tech solutions is one such way that a firm can save time and streamline work processes. In doing so, a law firm can improve the working environment for its employees, who in turn will be able to become more efficient and deliver a better service to the client. A client-first culture is now an imperative for global law firms, with technology an essential element to ensure success.
In-house legal departments are also developing a focus on their long-term innovation strategy. Often, the general counsel or chief legal officer within a firm may be sidetracked into completing more administrative work, the type of activity that could be automated through the aid of technology. In-house legal departments typically use legal tech tools for activities such as contract management, legal research, and records management. The adoption of technology within the legal services industry has been heavily influenced and, on occasion, accelerated by major global events including the 2008 monetary crisis and the coronavirus pandemic.
Alternative legal service providers (ALSPs)
Important contributors toward the growth of legal tech have been ALSPs. An ALSP can be defined as any business providing legal services without being a law firm. ALSPs usually provide specialized legal services, often at a lower cost and increased speed compared to traditional law firms. Technology adoption is an important attribute of ALSPs, one that is recognized more strongly than in traditional law firms. ALSPs vary in size, ranging from legal process outsourcers owned or procured by law firms and legal departments to smaller tech startups looking to disrupt the market. Among the largest and fastest-growing ALSPs that have been able to obtain legal services licenses are Deloitte, EY, KPMG, and PwC – otherwise known as the Big Four.
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