Since 2012 there has been a boom in legal tech. Patent applications for legal technology globally increased nearly 500% from 2012 to 2016. Products such as document review tools have entered common vocabulary for many companies and law firms, and integrating such tools has provided a variety of benefits to firms and clients alike. Continued growth in the tech sector has resulted in developers branching out from document review tools to develop products that can perform specific legal tasks such as contract creation and risk management. However, there is still a lot of mystery surrounding exactly what legal technology is and how it can be harnessed to improve efficiency and cut costs. Here we will give a brief overview of the different types of legal technology and what kind of problems they can solve.
What is legal technology?
In the simplest of terms, legal technology is tech that has been designed to help lawyers carry out legal work. Classic examples of legal tech include research tools such as case law libraries, and document review tools which scan documents for particular clauses. In recent years legal tech has expanded to include applications that perform specific legal tasks, such as contract creation, negotiation, review and analysis. These newer technologies consist of relatively simple systems that automate certain repetitive aspects of legal work or employ more complex systems using AI to solve issues.
Types of legal technology
The variety of legal tech can seem overwhelming, so here is a brief explanation of the most common types of legal technology and when they are used.
- AI document review
- Natural language processing (NLP) software (software which analyses sentences as clauses rather than just grouping key words) is used to read legal documents to extract useful information at a clausal level.
- Useful for: due diligence in M&A, extracting lease data for large scale property transactions.
- Document automation
- Systems to allow clients to quickly and independently generate tailor-made and house styled documents.
- Useful for: dealing with documents suitable for automation such as documents drafted on the basis of a model or precedent.
- Compliance technology
- Using NLP to check that a company's legal agreements are compliant or need to be updated due to a change in the law.
- Can also include workflow products that guide users through the application of new regulations.
- Useful for: dealing with matters that may be affected by new regulations or changes in the law such as GDPR.
- Other technology
- Additional tools exist which deal with further issues.
- Examples include predictive systems, cost analysis tools, risk alerts, legal information expert systems.
What are the advantages of using legal technology?
Two major advantages of legal technology are that it reduces costs and improves efficiency. Using legal technology can reduce the amount of time companies spend on tasks which as a result reduces overall costs. Legal technology can also decrease the burden on certain departments such as compliance. Additionally, legal technologies developed by law firms can be used as a cost-effective option to receive legal expertise.
Legal technology has changed and will continue to change the expectations of companies and law firms. As investment in the sector is maintained there is sure to be development of new products aimed at improving efficiency and reducing costs.
Since 2012 there has been a boom in the legal tech. Patent applications for legal technology globally increased nearly 500% from 2012 to 2016.