News focus: LawtechUK proposals for legal data are a tall order

‘Lawtech is not a panacea’, cautions the latest in a series of reports on the fast-growing sector. But a casual reader of Shaping the Future of Law, published last week by the government-backed LawtechUK initiative, could be forgiven for suspecting the opposite. Not only will digitally enabled legal services mean that the ‘legal moments that shape our lives can be affordable, fair and smooth’, they will save small businesses billions of pounds a year.

Lawtech also ‘gives us the tools to advance the rule of law, support the [environment, social and governance] agenda and set new standards, to benefit society and our economic prosperity’.

Given that the report is published by an industry body and based on the input of a who’s who of technology evangelists, bullishness is to be expected. The report, accompanied by a separate economic analysis, predicts that by 2026 lawtech could be an industry worth £22bn a year, employing up to 12,500 people and generating an overall ‘gross value added’ of £800m-£1.2bn.

While acknowledging that digital transformation of the legal sector ‘has been slow to date’, the report suggests we are now at an ‘inflection point’.

To nurture the sector, LawtechUK sets out seven priority areas for policy. Some, such as ‘Increased investment in lawtech R&D’ are predictable enough. So is the observation that legal education and training is out of step with the real world. ‘It is remarkable that legal basic training has changed little in the 45 years since I read law at university,’ says Sir Geoffrey Vos, master of the rolls.

Other policy proposals may be more challenging for the legal establishment. A notable one, reflecting the background of LawtechUK director Jenifer Swallow in financial services, is the strong call for legal data to be opened up for re-use across the sector, along similar lines to what has been achieved under so-called open banking. This initiative, introduced following a Competition and Markets Authority order, enables bank customers to authorise a regulated third party to access their financial data. Among other benefits, this allows clients to switch providers more easily, promoting competition. Open banking has also nurtured a burgeoning fintech sector.

The vision is that something similar can be done in law. ‘Investing in Open Legal along similar lines to Open Banking will bring a step change in data structuring, access, portability and use, towards shared sector goals in the service of business, society and the economy,’ the report states.

This may be a tall order considering the differing professional cultures across the sector as a whole: the report glosses over the fact that nuggets of valuable legal data are qualitatively different from those of financial data, and even more jealously guarded.  

Realising the value of such data, for example to assess the likelihood of litigation or detect compliance exposures, ‘will require changes to data collection and accessibility’, the report notes. Those changes in turn will require a ‘collective effort from organisations, government and regulators to establish common approaches, governance and standards to enable responsible, secure and equitable access to data and unlock its benefits’.

LawtechUK stresses that the recommendations in Shaping the Future of Law do not represent government policy. In a message introducing the report, justice minister Lord Wolfson (David Wolfson QC) steers clear of promises, congratulating the authors on ‘an important contribution to the debate’. However the report is clearly in tune with government initiatives such as the HMCTS reform programme, the planned national digital repository of court judgments (a key data nugget), as well as the master of the rolls’ vision of an integrated ‘funnel’ of online dispute resolution processes. Lawtech startups are also likely to benefit from the government’s £375m ’Future Fund Breakthrough’ to be unveiled this week. 

The LawtechUK report is the latest in a clutch of visions of the digital future of legal services, many based on interviews with the same cast of experts. Unlike the Law Society’s Future Worlds 2050 report published last month, it does not directly predict a collapse in employment in the legal profession. The Solicitors Regulation Authority is expected to publish its contribution to the debate, a report on how IT helped firms through the pandemic, by the end of this month.

Introducing the report, Swallow said: ‘The law is critical in all our lives and businesses and it should be easy to engage with and affordable and effective for everyone. Lawtech is how we make that happen.’ The £22bn market opportunity ‘only scratches the surface of the true impact we can have through digital transformation in law’.