What could the Brexit crisis mean for the legal tech industry in the United Kingdom and by repercussions, around the world?
Legal Geek, a UK-based blog that covers legal technology development there, wrote a striking piece that discussed how such impact as a less-qualified workforce, lower tech investments and higher transactional costs could have legal tech entrepreneurs looking elsewhere in the wake of Brexit.
Legal Geek writes:
If the crisis will strike law firms once again, what will be the consequences on law tech? In particular what is going to happen to L2L startups — the acronym by the way stands for lawyer to lawyer — meaning those tech companies that create solutions for law firms.
A couple of options.
One: legal tech could prove to be the solution for lowering costs and help law firm to survive or even thrive in dire straits. I’m thinking of the 2008 legal crisis which witnessed (or maybe triggered?) the birth of the first law tech startups. For some law firms, tech and innovation became a way to improve efficiency and reduce costs. Document automation, e-discovery, contract analysis are a way to make the same work more quickly, better and for less money. Brexit could even make more law firm embrace the lean, high-tech, low cost model made famous by Axiom law or Riverview law.
On the other hand, technology is an investment, and investments are a cost. And some legal tech solutions still cost a lot: cloud computing and some machine learning softwares for instance. Last year, a survey carried out by Lexis Nexis among 250 law firms pointed out how 82% of them planned to invest in tech to be more effective in the following 18 months. Will it still be the case?
I guess this depends very much on two factors: the cost indeed of legal tech solutions (some are cheaper, some are less) and the propensity to risk of lawyers (which, ok, by definition, are quite risk-adverse). But the fact that the legal market may go through hard times with Brexit is not,per se, a negative factor for law tech. It could even be an opportunity. It could.
According to Legal Geek, “a full-fledged Brexit (out of the EU, out of the EEA) is likely to paint a gloom future for UK law tech startups” and many tech entrepreneurs (including legal tech innovators) are looking to other locations, such as Berlin, to become tech start-up havens.
Going forward, this continuing development is worth keeping an eye on.