Brick by brick

Lawtech regularly returns to the perennial challenge of tech adoption. Generative AI has been the focus of multiple discussions and articles (including in the Gazette). Although it can pass professional exams and is incorporated into multiple new software offerings, legal services’ appetite for and investment in innovation is mostly not reflected in lawyers’ day-to-day work. However, this is likely to change as mainstream tech companies use it to enhance familiar platforms (see box). Long procurement and adoption cycles are a problem for start-ups and are slowing down the digital transformation of courts and legal services that made impressive progress during and directly after the Covid-19 pandemic. The adoption challenge is a key strategic priority for the new regime at government-funded initiative LawtechUK.

New directions for LawtechUK

On 1 April the operations of LawtechUK were transferred to CodeBase, the UK’s largest technology incubator, and Legal Geek, which runs major lawtech events and initiatives in the UK and internationally. Its (re)launch event at CodeBase in Edinburgh on 18 May announced a series of structured programmes supporting lawtech start-ups across the country and internationally. After introductory speeches delivered remotely by Christina Blacklaws, LawtechUK Panel chair, and justice minister Mike Freer MP, we heard about LawtechUK’s new directions and strategic priorities.

While the two previous iterations of LawtechUK benefited from prominent leadership, Martin Boyle, VP of transformation at CodeBase, Aleksandra Wawrzyszczuk, acting head of LawtechUK, and Jimmy Vestbirk, founder of Legal Geek, promised to stay in the background, putting the lawtechs front and centre. They introduced a new programme covering four key themes: education, innovation, thought leadership, and community. Mentorship is an important thread bringing the community together.

On education, Boyle outlined three new programmes which will launch in the summer:

• Lawtech Basics, for everyone, an online, self-guided programme;
• Lawtech First Steps, for prospective founders, focused on how to test ideas, form networks and make connections; and
• Lawtech Next Steps, for founders who have gone through the First Steps programme and are looking to gain traction for their product, by engaging with others who are further ahead in their start-up journey.

On innovation, Boyle outlined how CodeBase will help LawtechUK act as a bridge between start-ups and incumbent lawtech/legaltech companies. When LawtechUK was first launched in 2019, there were not many opportunities for start-ups to meet potential buyers and partner organisations. As Boyle explained, the long procurement cycle is particularly challenging for early-stage start-ups. LawtechUK is introducing an eight-to-10-month programme to help start-ups sell into bigger entities. Mentoring is an important thread running through the training and innovation programmes which are designed to connect founders with businesses that are ‘two to three steps ahead in the manual rather than much bigger companies’.

On thought leadership, Wawrzyszczuk outlined LawtechUK’s existing efforts to promote emerging technologies and the digital economy through ongoing research projects and public consultation. She promised some surprises as LawtechUK builds out across the UK and other common law jurisdictions.

Legal Geek’s Vestbirk then explained the important role of communities in building out LawtechUK geographically and strategically, promoting education, innovation, and diversity, and ‘getting the tech into the hands of end-users’. Community events and activities will be supported by a new website. Another big thought leadership project focused on digital communities is an updated version of the Legal Geek map of the UK’s lawtech ecosystem. This will uncover areas of opportunity and gaps in the market and cultural issues, such as diversity of founders, and a broader regional spread. CodeBase will work with founders and university partners to fill the gaps and solve the problems identified by this initiative. This will be supported by a ‘roaming incubator’ supported by 11 hybrid events across the country, focusing on grant activity, investor programmes and UKJT. Liam Angus and Balraj Singh reiterated Barclays Eagle Labs’ renewed focus on lawtech, having been awarded a £12m digital growth grant to support UK technology start-ups and scale-ups.

The start-up challenge

We then heard presentations from four Edinburgh start-ups at different stages of maturity. Exizent, which launched last year, is designed to improve the bereavement experience by providing a single platform to handle the legal and financial administrative requirements following someone’s death. As co-founder Aleks Tomczyk explained, this is designed as a white label resource for law firms to offer their clients.

Co-founder Andrew Byers presented Alta IP, which launched last year (at Eagle Labs) to help businesses leverage their intellectual property portfolios. Valla, which was part of the LawtechUK Sandbox in 2021, is a consumer platform. It helps people generate their own case documents, so that they can consult a lawyer later in the legal process, thereby saving time and expense.

CEO Danae Shell described Valla as an IKEA or Xero for legal – you can do most of the work yourself, thereby saving money. Valla leverages its 65,000 social media followers and Shell’s TikTok videos help to present legal issues in a straightforward, consumer-friendly and approachable style.

Amiqus, presented by senior commercial manager Richie Stewart, is a compliance and identity verification platform. It is already used by nine of Scotland’s top 10 law firms and is looking to expand across the rest of the UK.

At the end of the Q&A, the four presenters were asked, ‘if you had a magic wand and you could fix one thing about the buyer/ seller market place what would it be?’. Adoption was on everyone’s wishlist. As Valla is a B2C product, Shell wanted to work with HMCTS digital, ACAS, Citizens Advice, and legal advice clinics on market education. The rest were looking for ways to encourage law firms to embrace new technology. ‘If it’s not broke, don’t fix it, but how do you know it’s not broke until you try some alternatives?’ asked Byers.

'Start-up products often are not mature, commercial models. Law firms have giant tech ecosystems, so if I was developing a point solution I would make sure it was seamless rather than another icon on the screen'

Richard Hodkinson, Freeths

Procurement perspective

When it comes to IT procurement, start-ups and scale-ups need to consider the way their prospective clients work too. At Future Lawyer Week, a panel of law firm decision-makers discussed procurement processes. While the conversation was not focused on start-ups, the points raised are worth considering for market entrants. It is possible for a start-up to gain traction in large firms, which have the budgets and lawyer numbers to trial new products alongside (and ideally integrated with) their core tech stacks. But this means working through sometimes lengthy procurement and risk management processes.

Adam Curphey, senior manager of innovation at Mayer Brown, highlighted the relevance of budget cycles – for example, some firms use the calendar year, others may use the financial year. Joe Cohen, head of innovation at Dentons, has developed a streamlined Master Service Agreement (MSA) with a single view of all suppliers, and uses the Prevalent third-party risk management platform to speed up procurement. For Andrew Powell, CIO at Macfarlanes, the length of the procurement process will depend entirely on the scale and risk profile of the project. Another complication is the different teams involved – innovation, IT, procurement.

IT needs to fit

Separately, I spoke with Richard Hodkinson, CTO, and Nick Pryor, director of knowledge management at Freeths. While UX (user experience) is important, the first step is to make a product desirable to the target market, and for larger firms integration with core systems is an important consideration, they advised. ‘Start-up products often are not mature, commercial models,’ explained Hodkinson. ‘Law firms have giant tech ecosystems, so if I was developing a point solution I would make sure it was seamless rather than another icon on the screen.’ As well as the strategic imperative of producing a return on investment, Pryor highlighted some universal conditions of entry, including compliance with ISO27001 security standards.

The procurement/adoption challenge is a problem for many tech start-ups, and although law firms have become more innovative and agile, there is also a lot of competition for their tech budgets. It is therefore worthwhile for market entrants to understand their prospective clients’ systems, processes and budget cycles, and the details of MSAs and integrations, early in the sales cycle. While this may not speed up procurement, it will help them to be taken seriously, as well as managing expectations on both sides and establishing a positive and hopefully lasting relationship.