Lawtech tipping point “likely to come from non-lawyers”

Swallow: Non-lawyers will see the opportunities

Non-lawyers will disrupt the legal technology market such as to create a “tipping point”, probably in the next five years, the outgoing head of LawtechUK has predicted.

Jenifer Swallow leaves the government-backed initiative, which aims to support tech transforming the UK legal sector, in the summer, having set it up two and a half years ago. Her successor has been chosen; it is a woman but her identity has not yet been announced.

The organisation has produced a ‘what we have achieved’ summary to mark Ms Swallow’s departure. It focuses on a number of areas, such as the lawtech sandbox, which connects lawtech start-ups with regulators and decision-makers in a supportive environment.

Other achievements include a proof-of-concept online dispute resolution platform, the UK’s legal statement on cryptoassets and smart contracts, an online learning and resource hub, various reports, guidance and projects on such issues as multi-party data access.

Speaking to Legal Futures, Ms Swallow, a former general counsel at money transfer company TransferWise (now just Wise), predicted that the tipping point would come from the use of structured data.

“It’ll be one of those things that when it comes, it hits you like a train,” she said. It would be an innovation that made access to the law “super easy, because you’re just in your Word file or wherever you are used to being and you’re producing data underneath that is structured…

“Obviously that opens up the opportunities for datasets, for predictive analysis of risk, for sharing data, insights [and so on]. I find that exciting.”

Change would most likely come from non-lawyers who spotted an opportunity, rather than from within the legal profession.

She gave the example of two start-ups chosen by LawtechUK to enter its sandbox program: employment problem resolution platform Valla and smart contracts platform Hunit, which enables agreements to be digitally signed and issued to a distributed ledger-based network directly from Microsoft Word.

Valla was created by two women who had “no legal background whatsoever” but had grievances inside their workplaces and built a product which anybody with an employment dispute could use to help build their case. Hunit was developed by serial entrepreneurs who had seen a “multi-million market opportunity”.

Venture capitalists were also taking more interest in the law and providing the necessary capital.

“I think we’ll be very surprised at where [change] comes from. What we typically see so far is the pattern of somebody who’s got experience with the law and somebody who’s got experience of technology and they come together to address the problem…

“I think some of the really exciting [future] founders will not necessarily follow that paradigm.”

So far, a lot of concentration among start-ups had been in the area of contract automation and discovery tools and other tools aimed at clients with deep pockets. Tools aimed at consumers, and to a lesser degree SMEs, would be more focused on volume, Ms Swallow predicted.

“It’s a different model, so needs a slightly different mindset”, which is why people who were not lawyers were likely to come in and disrupt the market, she suggested.

She anticipated change would “fall off in terms of pace” now the impetus brought about by Covid has subsided.

The pandemic had forced “us to be able to do everything by remote work at a crazy pace”, which moved the market on. “But of course we know that videoconferencing is not innovation and is not the future of law”. A key role of LawtechUK was to keep up the momentum.

A key question was the future of the UK jurisdiction in the digital world. Other jurisdictions offering English law solutions were challenging the country’s primacy and it remained to be seen whether the UK had done enough to assure the centrality of its role.

Ms Swallow said the positioning of the jurisdiction was a key challenge for LawtechUK’s next phase. Her successor would also have to tackle work on the SME and consumer/mass-market area.

Asked whether the legal profession was capable of changing as other industries had done in terms of embracing technology, she forecast that much of change would come from consumer demand and need not be difficult nor require a lot of investment.

“I would say incremental progress is still progress. My high street firm moving from sending me letters to sending me emails, to sending me something on a portal, is innovation. And that’s fantastic and actually doesn’t [cost much money or time].”

Everyone was capable of change, she stressed, adding: “It’s easy to be lethargic when there’s nobody forcing you to change but actually the sophistication of clients is increasing…

“The truth is that if [lawyers] don’t respond, they will be out of a job because people will stop instructing them.”

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