Lawtech chief signals new direction with funding boost

Access to justice and modernising small firms will be the focus of the next phase of the LawtechUK initiative following a £4m funding boost, according to the initiative’s new head. 'We need to look at where the market is not doing its job so well,' former Freshfields associate Alexandra Lennox told the Gazette over an early morning coffee in London’s Spitalfields. 'The larger firms tend to know what they’re going in this space.'

For Lennox, the new focus means nurturing innovations that help ordinary citizens and small businesses gain access to legal advice - a gap repeatedly pointed out by the Law Society and others, especially since the erosion of legal aid since 2012. 'We need to look from the end user, the client’s perspective,' she said.  

LawtechUK originated in 2018 when the government set up a panel of experts amid a surge of interest in the digital transformation of the legal sector, which was seen as trailing behind other parts of the economy in adopting new technology. Its first phase, backed with £2m in government funding, got under way in 2020. Work carried out in that phase included building a 'sandbox' for testing innovations as well as work on online dispute resolution and so-called ‘smart’ legal contracts.

The initiative sought to overcome two big barriers faced by legal innovators: regulatory confusion and lack of access to data about real clients and cases. 

Lennox, a solicitor who began her career in M&A law before being seconded to Freshfields' innovation team, took the helm this spring. ‘Even as a trainee I was interested in how technology can do things better,' she said. 'Then I got interested in the clients' experience, and how the legal sector not changing as quickly as others.' 

LawtechUK's second phase is buoyed by £4m in Ministry of Justice funding announced this month. But Lennox points out that the second phase begins in an environment  'now very different to when we started out'. On the one hand, the pandemic stimulated the takeup of digital technology by firms and other parts of the legal system. On the other hand is a rocky economic outlook: inflation and rising interest rates seem set to dent investor confidence - and send demand soaring for affordable legal advice.

Overall, however, she is confident that 'the sector is maturing - people are now recognising how law tech can help.'

The changed environment is reflected in the phase two workstream. The Lawtech Sandbox will continue match-making innovators with mentors and regulators, with a focus on access to justice. It will be less choosy about participants, dropping the strict judging process applied to the first cohorts.  'This year we’re able to operate more widely, we have more mentors lined up,' Lennox said. 

The work on 'smarter contracts' - secured with blockchain encryption - will continue, showcasing real life examples of their use. 

Data continues to be a focus: one idea is to carry out a benchmarking exercise to assess the 'data maturity' of in-house legal teams. Meanwhile LawtechUK's UK Jurisdiction Taskforce, the industry-led body tasked with ensuring law keeps pace with new technologies, will be reporting on its consultation on the issuance and transfer of digital securities under English private law.

The next phase of work could also involve a change in ownership of LawtechUK. Since its inception it has been part of Tech Nation, the government-backed 'growth platform' for new technologies set up in 2010. The MoJ plans to begin the process of finding a new 'delivery partner' this autumn, to run the programme from January next year to March 2025. The procurement could attract interest from legal regulatory bodies keen to grow their empires.

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