Insights from the application phase of the Lawtech Sandbox pilot

Our focus

At LawtechUK, we built the Lawtech Sandbox to provide a launchpad for tech pioneers, to help accelerate their development and bring us closer, faster to transformation in law.

We heard from many such pioneers during our research, about the challenges of innovating in the legal sector, including multi-regulator engagement, timely access to intelligence and decision-makers, and access to legal data – all areas in which there are barriers to the market responding organically. We designed the Lawtech Sandbox specifically to address these needs.

Applications open

After 4 months of concentrated design, build and consultation, we opened for applications on 4 November 2020, offering space for just 5 pioneers on a pilot programme. We did not know who would come.

We were blown away to receive 65 applications in the 10-day application window, with little marketing. Applications started within 2 hours of the announcement.

The 65 represented a rich array of market innovation across all categories of lawtech, with a concentration in contracts (20%) and legal business operations (36%). Some we assessed did not need the type of support the Lawtech Sandbox was designed for or which were unlikely to be achievable in the three month pilot, but the vast majority were well matched. You can see the range of innovation categories below.

Insights

65 applications in 10 days is a fascinating indicator for the lawtech sector overall, suggesting there is a high level of lawtech development, demand for this type of support, and organisations at an advanced enough stage to commit resources and be ready to get to work.

One of the design principles of the Lawtech Sandbox was for it to be available to all lawtech pioneers, regardless of the type of organisation, stage of growth or target market. The Lawtech Sandbox is entirely remote and we have seen through Covid the changing role of physical location in business success. It was therefore great to see applications from individuals, law firms, corporates, social enterprises and academia and to see 40+% of applications coming from outside London. However, it would be great to shift that concentration of applications in London and the South East going forward. It is worth noting also, that we turned several pioneers away at enquiry stage, based on the requirement in the pilot for the pioneers to be based in the UK.

65% of applicants were from the start up and scale up community and the majority of those focused on the business to business space (76%), rather than business to consumer (at 24%), with several looking at small to medium size enterprises. This tracks to the lawtech ecosystem overall, where we currently see much less innovation in B2C, although this, along with SME, is an exciting and yet untapped market opportunity.

We also saw a range of offerings focused on regulatory compliance and note the convergence of regtech and lawtech in this context – the distinction between the two decreases in relevance, the more the focus turns to business needs and outcomes.

28% of applicants had a female founder. This is above the tech sector average of 22%, but feels too low for where we should be in 2020. We did not measure ethnicity and other EDI figures as part of the application process. Should we carry the pilot forward into future phases, there is further work to do to support equality and diversity in lawtech.

Requests

We anticipated high demand for access to data and 72% of applicants requested this to help in their product development, particularly to train their software and increase its accuracy, but also to inform their product design and deployment. Wider market research was also requested, though this is not part of the Lawtech Sandbox pilot offering, as there are other ways in which pioneers can achieve that. A whopping 94% of applicants wanted the network service – to be connected with experts and decision-makers to collaborate on opportunities and surmount challenges. 88% wanted access to regulators, in particular legal regulators, the Information Commissioner and the FCA, but also other regulators and authorities.

Onwards

At LawtechUK, our objective is to support the digital transformation of the legal sector and the Lawtech Sandbox is one of our 4 inaugural projects to help, in practical ways, to achieve that. We move now to working alongside our 5 successful participants to help achieve their ambitions, accelerate their development, and tackle pervasive sector challenges along the way.