Shaping the Future of Law - The LawtechUK Report 2021

Purpose

The law is critical in all our lives and businesses, and to our shared society, economy and jurisdiction. But the mechanisms through which we access the law today are typically opaque, expensive and slow. In our report ‘Shaping the Future of Law’, we highlight the opportunities ahead for the legal sector and shine a light on the priorities on which the legal community can focus, to effect digital transformation in law, without delay.

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Value

We detail in the report the benefits of widespread use of technology and data in law and the vital role of lawtech in meeting user needs. Lawtech can help reduce the compliance burden on businesses, improve decision-making and risk management and increase efficiency, through document automation, AI review tools, online dispute resolution, digital documents and structured collection and use of data. For consumers, lawtech can provide greater access to legal services, and better, faster, more affordable outcomes, through DIY applications, asynchronous online services, on-demand advice and dispute resolution tools.

• Unmet demand from UK SMEs and consumers, valued at up to £11.4bn annually.
• Cost savings for SMEs of using lawtech products and services of up to £8.6bn each year.
• Productivity gains through increased use of lawtech by legal service providers, worth up to £1.7bn annually, which can be extended through tech adoption and the buying power of in-house legal departments.

Growth

Lawtech is poised to meet this demand, with the ~200 UK lawtech companies attracting a total of £674m of private investment up to the end of 2020 and employing 7,100 people. We see these companies on a fast-track trajectory of growth, growing at an average rate of 101% over the last three years, outpacing other applied tech sectors, including climatetech (5%), fintech (20%), and healthtech (47%). With the market maturing and consolidating, these companies can be attracting up to £2.2bn in investment per year by 2026 and contributing up to 12,500 jobs over the same period.

Notably, the fastest growth in lawtech is seen in the regulatory compliance category, growing by 214% between 2018 and 2020, addressing the increasing legal compliance burden for businesses. The vital consumer and SME categories are also accelerating in growth, seeing a 74% increase over the same period, demonstrating the wider market opportunity of lawtech.

The legal sector is at an inflection point for digital transformation - the technical capability and growth in lawtech is now able to meet the growing market demand, combined with fast adoption of certain technologies in the legal sector during Covid-19, and increasing emphasis on the needs of users and society at large. With government investment in innovation at an all time high, the commitment to build back better post-pandemic, and the focus on digital infrastructure and court reform, the UK has a unique opportunity to secure its position as a global leader in law for the future, through investment in lawtech.

Collaboration

Cross-sector support is needed to harness the opportunity, as has been seen in other sectors such as fintech. In this knowing, we call in the report for shared focus and collaborative action, across the legal community, regulators, policy-makers and businesses, to accelerate investment in and adoption of lawtech and to ensure the future of UK law meets the changing needs of business and society.

Whilst lawtech is not an end in itself nor a panacea, it provides opportunities both for improvement and for transformation and is a common theme around which the legal sector can convene and through which it can evolve.

Focus

In the report, we highlight seven priority areas:

1. Increased investment in lawtech R&D
2. Growth of new markets
3. Improved collection and availability of data, towards ‘open legal’
4. Greater connectivity across the sector
5. Increasing technology awareness and capability
6. Policy and regulation that supports tech adoption
7. Sustainable growth anchored in the purpose of law

With concerted effort across these seven priority areas, we can achieve twenty years' progress in five.
We look forward to a review of our collective progress one year on from now and to seeing movement towards a cohesive plan. The biggest opportunities are those we take as one and without delay.

Jenifer Swallow, LawtechUK Director at Tech Nation comments:

“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 sector is seeing incredible growth - with lawtech startups and scaleups growing at 101% over the last three years, and adoption levels increasing during Covid-19 across our courts, legal businesses and in-house legal teams. Building on this growth, working collaboratively across the sector, we can realise the full strategic opportunity of lawtech on an accelerated timeline, and deliver results no one organisation could achieve alone - for the benefit of regular people, businesses, the UK economy and the wider global ecosystem.

The £22bn in annual economic contribution of lawtech evidenced in this report only scratches the surface of the true impact we can have through digital transformation in law.”

Our work

At LawtechUK, we have a targeted work programme, supporting cohesive action in the sector and ourselves tackling elements of the seven priorities outlined in the report - including through cross-community R&D collaboration in the Lawtech Sandbox, our work on data access and smart contracts, provision of resources and technology training courses on the LawtechUK Hub, and our research and other programmes. Separate government initiatives focus on legal support and access to justice for citizens.

Appreciation

Much appreciation goes to the many who contributed to the report, demonstrating the collaboration in the legal community there to be harnessed.

We welcome feedback and ideas via our Twitter, LinkedIn or our website and to collaborating with many through our work from here.

The report does not represent government policy.