Having been in the legal tech sector for the best part of my professional life, I can say that it is amongst the most resilient industries. This is despite all the transformative changes – and not least due a rapidly shifting regulatory landscape over the last 20 years or so – that this industry has experienced.
As 2023 kicks off with much talk of a global economic slowdown, rising inflation, public sector turmoil and the lingering effects of the pandemic – exercising caution in business is a rational thought. At the same time though, it is easy to succumb to these uncertainties and adopt an overly guarded approach to business.
Legal Tech Opportunities
Looking through the Ascertus lens, in particular for legal tech, there are opportunities for the taking in 2023. Some trends to watch out for are:
- The Middle East is an emerging market for legal tech adoption. Notwithstanding the controversies that surround this region, there is significant appetite in the legal sector in this market to adopt the latest technologies for business growth and advantage. For instance, law firms in this geography recognise the value that cloud computing offers, and the sector is keen to leapfrog to most current solutions and systems. It is an astute approach on their part.
- LegalOps will make inroads in to the corporate arena in Europe. Thus far, law firms, primarily driven by profitability and superior client service, have looked to adopt LegalOps. In 2023, corporate legal departments too will actively adopt this approach – driven by productivity and efficiency gains – to better service their organisations. Many of the legal departments we speak to are planning to keep certain aspects of their work in-house and only outsource select matters to law firms. This in turn is driving adoption of best practice processes and systems, because with growing in-house teams, new lawyers joining corporate legal departments from law firms are expecting the same quality of technology that they are already accustomed to using. For an optimised LegalOps function, software-as-a-service model is now a given – as is a single, secure, and centralised location for data. Since the pandemic, we are routinely talking to legal departments about a cloud-enabled document and email management function – and the mindset towards data security and cloud is one of practicality, attention to detail and risk management.
- Technology adoption, driven by compliance with rapidly evolving data privacy and protection regulations. Only a few years ago, it was quite common for corporates to have very large legal departments with relatively small supporting compliance teams. Today compliance teams dwarf the legal departments. The pace at which data privacy laws are evolving and expanding, technology providers too will need to ensure that not only are they up to speed with these stringent regulations, but that the technology they provide also offers the organisations the capability for effective compliance.
We find that European countries, in particular the Nordics and Germany, are stricter than most when it comes to data privacy and protection, and therefore expertise in this space will be crucial. Furthermore, in addition to working with compliance and legal departments, increasingly tax teams in corporates too are keen to deploy document and email management technology. In a hybrid working environment, a cloud-enabled document and email management function has become a core component of business infrastructure.
So, in my view, whilst the economic forecast may not be as positive as we would like it to be, there isn’t room for doom and gloom either – nor is there any need for a knee-jerk reaction that is characteristic of big tech, of the likes of Amazon, Salesforce, Microsoft and such. Organisations – be they legal services or technology providers – that have a strong business foundation, a commitment to their business goals and an open, flexible mindset, will almost certainly spot and leverage new business opportunities to strengthen their future. And technology will support and aid growth – facilitating new ways of working, and helping to overcome operational challenges – just as it has done during difficult and uncertain times previously, with the pandemic being the most recent.