There is a big gap in the market for legal providers to serve small and medium-sized businesses (SME) via online services, as long as they are quick, cheap and easy to use, according to research.
The qualitative research by LawtechUK and the Legal Services Board (LSB), published last week, interviewed 40 SMEs, a quarter of which had already used lawtech.
It found SMEs ready and willing to seek online legal help, preferably backed up with access to lawyers when necessary.
LawtechUK reported in July there was SME legal need worth over £11bn. The qualitative research found businesses valued transparency and lower fees charged by lawtech companies compared to traditional legal services. Often they did not know they had a legal need.
Half the SMEs surveyed were interviewed in-depth – while serious issues needed traditional legal help, straightforward issues could be dealt with by DIY means, but there was a great opportunity for lawtech providers to occupy the middle ground with quick, easy-to-use, value-for-money services that carried legal authority.
The research “revealed a gap in the market” for legal technology firms to fill, particularly for the most common needs such as finding a provider and preparing documents.
Concerns raised by SMEs included that a low-cost online service would be too general for their needs and that contact with lawyers might jeopardise fragile relationships they had built up with customers and others, for instance if they ‘over-formalised’ business arrangements.
“I do feel it could have potentially blown things with that client completely if I’d moved maybe a bit too soon,” one small business said.
Another had few reservations, saying: “I have not come across lawtech before but after seeing the videos this is exactly the kind of service that I am looking for. I think getting a decision right away with the fees upfront and avoiding the hidden fees is perfect for my business.”
LawtechUK is a collaborative initiative by growth platform Tech Nation, the Lawtech Delivery Panel and the Ministry of Justice.
Jenifer Swallow, LawtechUK’s director, said: “SMEs make up 99% of all UK businesses and 60% of jobs, and are fundamental to our communities, yet too often they end up ‘going it alone’ when it comes to legal issues…
“Speaking to SMEs, they point to a clear role for lawtech, giving them access to legal support that is timely, affordable, convenient and reassuring – and, importantly, that increases their resilience over time.
“The debate is often framed around technology replacing existing services, but our research shows that lawtech offers new opportunities for legal service providers to meet the unmet needs of SMEs and make many people’s lives easier in the process.
“For lawtech innovators, our research shows that the SME market is one where transformative legal products can thrive, and support the tens of thousands of SMEs in need of their assistance.”
Matthew Hill, chief executive of the LSB, said the board encouraged “legal regulators to actively reach out to innovators to foster innovation that increases access to legal services.
He added: “We’d like to see them looking for opportunities to collaborate with innovators to identify and reduce barriers – be they technical, practical or about confidence.”
If they did, they could “build trust and confidence in the legal services market and help reduce unmet legal need”.