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What's Standing in the Way of a Legal Tech Boom?

By Casey C. Sullivan, Esq. | Last updated on

There's no shortage of legal tech startups. There are entrepreneurs and innovators across the country looking to bring the latest technology to the legal market, from cutting-edge artificial intelligence applications, to basic document management streamlining. There are even social networks just for lawyers.

But what there isn't is mass adoption of new technology. Lawyers and law firms remain particularly slow to embrace new tech, making it harder for startups to gain valuable venture capital funding. Can obstacles to a true legal tech boom be overcome?

The Barriers to Innovation, Adoption

At Stanford's recent CodeX FutureLaw Conference, several practitioners, academics, and legal tech representatives discussed the hurdles facing emerging legal technologies. Some placed the blame on law firms themselves. The complaints were familiar: the billable hour encourages inefficiency, the partnership model makes top-down decision making difficult, and so on.

But there are other reasons for slow adoption, however. Currently, many legal products are focused at niche services such as document classification, billing, or IP management. The LawSites blog, for example, lists over 500 legal startups, offering everything from online arbitration to contract templates.

That leads to a glut of products, which makes adaptation of new technology harder. But it also causes problems with interoperability. Products simply aren't integrated in a way that makes them easy to adopt.

If greater adoption of technological innovation is going to happen, it might come via corporate legal departments first. Unlike traditional firms, many in-house legal departments are viewed as a cost center, not a revenue generator. That means they face greater pressure to reduce cost and bring on innovative, cost-effective solutions.

Or perhaps it will come from clients. As major legal clients become used to cutting-edge technology in their own business, they may start pressuring legal service providers to fall in line.

And, of course, a legal tech boom could be greatly aided by legal tech products that are better designed to the needs of firms. That means more interaction between legal technology innovators and actual lawyers. According to a study by case management software company Smokeball, only nine percent of those in the legal tech industry actually have a legal education. More experience with the actual practice of law, through bringing on lawyer consultants to working more directly with firms, could help improve tech offerings. So too could a greater focus on interoperability and broad platforms, allowing firms to move from piecemeal products to integrated solutions.

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