Author: Daniel Furlong

The only way to make sense out of change is to plunge into it, move with it, and join the dance.” – Alan Watts

In a recent 2024 article[1], it was reported that the impact of legal technology on the global economy in 2021 was around $127.7 billion. It is predicted this will increase to more than $225 billion by 2027. The article notes that the top two priorities of business support departments in law firms are increased utilization of technology and process standardization. Following this trend, we expect a rise in investments in legal technology, along with an increase in employee training for the effective use of these tools, within law firms.

In the realm of M&A, technological advancements over the past decade have already revolutionized the due diligence review process. Various machine learning solutions can now swiftly sift through vast amounts of data and summarize key provisions, identify risks, and validate assumptions. Technology also facilitates real-time collaboration through secure virtual data rooms, where sensitive information can be shared and discussed safely. Cloud-based project management tools streamline workflows, keeping parties updated in real time and aligned throughout the deal lifecycle. Technology solutions can also automate compliance checks, monitor regulatory changes, and flag potential risks early. These capabilities mitigate risks that could jeopardize the success of a deal. Companies using these tools have reported enhanced efficiency and accuracy in handling transactions.

Since 2023, there has been a massive interest in using generative AI in the legal sector. The same article notes that the generative AI legal market size was valued at $52.27 million in 2022 and is expected to balloon to a whopping $781.55 million by 2032. Applications of generative AI include generating provisions with legal documents, using predictive analytics to estimate case outcomes, and analyzing data to identify market trends, risks, and opportunities. We also see recent developments powered by a combination of AI techniques, as machine learning platforms begin to integrate generative AI into their solutions.

Despite the potential and promise, it has remained a challenge for most law firms to integrate legal technology into their systems, and several factors are to blame. One major issue is the limited time available to learn and implement new technologies while managing billable hours. As with any technology, it would be a struggle for law firms to find a balance between investing in expensive tools and managing legal tech’s constant novelty and unpredictability. Additionally, there is a widespread concern that AI might eventually replace legal professionals, a fear common across various fields.  

However, instead of fearing technology, law firms should realize that technology cannot take over a profession that is anchored in humanity and relationships. The heart of the legal profession lies in the human experience – the offering of expertise and judgment, the understanding of complexities and nuances, the interpretation of laws and rules, and the making of strategic decisions. These are the exact same things amplified by the use of legal technology. Law firms that prioritize legal tech will not only be more efficient and productive, they will also create stronger client relationships and help spotlight the talents and skills of its most experienced lawyers.

Equally important as embracing advancements, law firms must also have innovation plans and policies in place in adopting and using legal tech tools and AI. Law firms must prioritize training for their lawyers and employees, as effective adoption of new technology relies on it. Like any new endeavor, continued practice will reveal more efficient methods and more effective processes over time. As such, it is reasonable to expect the emergence of new roles or areas of expertise dedicated to training and implementing legal tech systems and practices within law firms. As the legal profession is centered in client relationships, clients must also be assured that law firms are using legal tech and AI safely, effectively and responsibly. Legal tech is the future that must be both accepted and planned for. It may not replace lawyers, but it can be revolutionary when leveraged effectively. Technology is here to stay and grow, and legal professionals who take the time to learn how to ride the tide of change will rise above.

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[1] https://www.lexisnexis.co.uk/blog/future-of-law/50-must-know-legal-tech-stats-for-2024

One unique aspect of working at ClearyX as an analyst is the Company’s encouragement to develop and refine “side projects”, based on our individual interests and expertise. In addition to our core transactional duties, each analyst is given the chance to spearhead these projects, which we refer to as “innovation projects”. These projects vary from enhancing operational workflows to developing automated tools. Analysts are empowered to leverage their unique skill sets, interests and backgrounds to design and develop their innovation projects. These projects exemplify ClearyX’s goal of transforming the delivery of legal services through innovation.

Leveraging my past experience working at a hedge fund, my innovation project involved building an automation tool for the bulk filing of Form 13G using purpose-designed legal technology platforms.  Filing Form 13G is a regulatory requirement with the U.S. Securities and Exchange Commission (“SEC”) to report a party’s ownership of stock that exceeds 5% of a company’s total outstanding issued stock. Each relevant must file a Form 13G with the SEC within a short period of time. This filing obligation, along with the short turnaround time, creates an administrative burden for entities that trade frequently, including financial institutions and investment funds. The creation of this tool was meant to address some of these concerns.

At ClearyX, we have access to both a robust suite of technology platforms and an experienced tech team with the necessary know-how. Through collaboration, we can use existing technology platforms to create custom solutions. In addition to developing practical tools, being involved in  innovation projects provides opportunities for analysts to hone their skills in project management, product development, and marketing. As I navigated through the stages of design, development, and testing, I not only improved my technical skills but also developed a deeper understanding of how these tools can enhance our legal processes at ClearyX, benefitting our clients and stakeholders.

Our team of analysts have varied legal backgrounds and each of us leverage our unique skill set in our innovation projects. My past experience at a hedge fund set me up for success in my innovation project. Furthermore, the team’s collective experience, including litigation, anti-trust law, M&A, and employment law experience is vital to tackling new projects and providing insight to stakeholders. Together, we bring a comprehensive understanding of the legal landscape, allowing us to tackle complex challenges and devise innovative solutions that drive success for our clients.

ClearyX fosters a collaborative environment where analysts, project managers, and tech experts work together in unison. This synergy accelerates project development and enriches the learning experience for all involved. Innovation projects create a unique opportunity for analysts to make a tangible impact within the organization and introduce meaningful improvements that benefit our clients and stakeholders. The culture of innovation at ClearyX underscores our commitment to excellence and continual improvement in the field of legal services.

I would like to think I am not the only one who gets the impression that, with regards to legal tech, life is moving pretty fast. For clarity, legal tech broadly encompasses the use of software, applications, platforms and other technology to provide legal services and support the practice of law. Within this sector, new developments are reshaping the practice of law, while generative AI dominates all conversations on the future of the legal industry (and everything else for that matter).  Add to this a healthy amount of legal tech news sources reporting on all the latest trends, and the task of keeping up with what is happening can feel overwhelming for already overstretched legal professionals.

Despite these challenges, legal professionals are well-advised to stop and look around once in a while to avoid missing out on what is happening in legal tech.  For starters, more and more U.S. states, as well as Bar Associations/Law Societies in Canada are imposing technological competence obligations on lawyers. Attorneys now need to familiarize themselves with new technologies and products in order to be able to accurately assess their benefits and risks.  Aside from complying with professional duties, becoming technologically savvy will help legal professionals evaluate the strategic value of new technologies and capably meet client demands to use the most efficient and/or cost-effective tools. Increasingly, clients are also asking attorneys to serve as advisors and/or providers of technology solutions as part of their legal services. Beyond that, legal professionals should stay informed to understand and adapt to the potentially revolutionizing effects legal tech may have on the business of law and the legal profession.

In order to stay informed in a manageable way, I find it helpful to both establish routines and make learning about legal tech an interactive activity.  As mentioned before, there is a plethora of legal tech news sources available on the web.  It is a good idea to take a look through different blogs and news sources, pick your favorites, and then set up automatic updates at a pace that fits your schedule.  This keeps information that aligns with your interests and/or criteria flowing at a controlled pace. Beyond blogs and news sources, there are interesting legal tech podcasts for those looking for something to listen to, and their built-in episodic formats automatically manage the flow of information. Not sure where to start? Plenty of websites have compiled lists of what they consider to be the best sources of legal tech news. I suggest perusing their list and browsing the different options, but keep an eye out for the sources that pop up on different lists as those are likely to be the standouts.

For more interactive learning, I recommend attending legal tech conferences.  Numerous companies and associations offer conferences and seminars specifically focused on legal tech throughout the year.  These events provide opportunities to learn more about Legal Tech from expert panels, roundtables, product demos, as well as providing networking opportunities.  Listening to creators of legal tech solutions and people that are both using the technologies and are committed to transforming the legal industry is quite stimulating and helps foster an openness to technology, which is necessary to navigate the world of legal tech.  ClearyX has had the opportunity to sponsor a few amazingly informative conferences, including CANLIF Toronto, Legal Innovators California and Legal Innovators UK. Another way to further embrace technology is to take courses on an area of technology or an intersection between law and technology, that may be of particular interest to you. At ClearyX, for example, we have collectively enrolled in Harvard University’s introduction to computer science, CS50 for Lawyers. There are also plenty of AI training courses for lawyers, both free and paid, for those more interested in keeping an eye on AI. This more “academic” approach to learning about technology can be a good way of acquiring a deeper understanding of legal tech and bringing an innovation mindset to the confines of the legal world.

It is important to remember that legal tech is in a constant state of development and the question is not if it will impact the legal industry and the legal profession but to what extent it will continue to transform the practice of law. By creating a framework to stay informed with what is happening in Legal Tech and leaning in to technology, legal professionals will be well-placed to navigate changing times not by chasing trends or mimicking others but by making educated decisions on what best fits their business, client and/or career needs.

To learn more about legal tech, how it impacts your sector, discuss pain points ripe for an efficiency make over, or find out how ClearyX is utilizing technology to reimagine legal services, feel free to take a step forward and reach out.

*No AI was used or harmed in the drafting of this blog post (except for the picture below).

(Microsoft Designer-Image Creator)

On October 3, 2023, ClearyX analysts Kaitland Goulet and Egi Troka attended the Legal Innovation Forum in Calgary, Alberta. This year’s theme focused on how leadership and collaboration are driving change and delivering value in the evolving legal ecosystem. The following are key takeaways from the panels.  

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Driving Alberta’s Economic Innovation: Alberta has a culture of enterprise, having one of the highest number of new businesses in Canada. Legal leaders play a significant role in driving innovation as advisors and connectors who apply a business lens to risk tolerance. Innovation is driven by highly engaged, multi-disciplinary teams that complement each other’s skills and operate in a safe environment where opinions can be freely expressed. Innovative lawyers are collaborative and optimistic for change, having empathy for people’s problems and a passion to solve problems.

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Future of the Legal Ecosystem: In 2023, lawyers can take control of their practices and increase their productivity as GenAI tools are embedded in products and workflows. Companies like Simplex Legal and Goodlawyer are leveraging these tools to improve service delivery, with a focus on efficiency, accuracy, and cost-effectiveness. These tools can handle repetitive and tedious work, reducing errors and distilling buried insights. Use cases include the summarization, extraction and interrogation of a full suite of documents. The best legal tech tools are being created by people who are deeply embedded in the area of practice being targeted, as they know the area, pain points and where to look for inefficiencies.

The structure of the legal industry is changing. Investors are pouring more money into legal tech as the demand is driven by clients who request responsiveness and immediate results at a cheaper price. Law firms are feeding Alternative Legal Service Providers (ALSPs) work. It is estimated that approximately 80% of ALSP’s revenue is coming from law firms, while the rest is from the Big4 and other sources. Meanwhile, law societies are using “sandboxes” to foster innovation, allowing for rule exemptions in regions like Arizona, Utah, and several Canadian provinces.

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Mastering Change Management: The reality is that individuals are either inspired or forced to change. Stakeholders in the legal industry have taken an entrepreneurial approach to change management. They encourage ongoing discourse and follow market demand to understand problems and craft appropriate solutions. Law firms have found that incremental change, rather than fundamental change is a more realistic and successful approach. When faced with resistance to change, the best approach is to ask why this resistance exists to help improve the change process and obtain better adoption. Regardless of the approach taken to innovation, lawyers’ duty of competence includes technological skills.

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Solving for the people puzzle: There is a disconnect between law school and legal practice due to generational and situational differences. Law students and young lawyers have different career aspirations and perspectives. Lawyers are moving to in-house opportunities much earlier in their careers than what is traditionally expected, largely due to beliefs of improved work-life balance, value alignment and flexibility with an in-house career. Millennials and GenZ employees tend to desire increased transparency and communication from leadership, as they were raised by families who included them in “grown-up” discussions. The pandemic has also transformed physical workplaces, adding another layer of complexity. Yet retention issues are often dismissed as a cost of doing business in big law firms, leading to a lack of motivation to foster a positive work culture. Ultimately, lawyers should focus on the impact they want to make, rather than chasing a dream job at a specific workplace, to have greater career satisfaction.

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In conclusion, the forum highlighted that technology will not replace lawyers but will equip them to deliver better value. As the saying goes, “Technology will not take your job away, but a lawyer who is better equipped to use technology will.”

The traditional assumption has been that an individual graduating from law school will almost always enter private practice, climb the law firm hierarchy and reach the coveted status of equity partner. Why else would you go through the trouble of attending all those early morning constitutional classes, and the effort of being called to the bar? By many accounts, a sizeable number of lawyers are currently unhappy with private practice. Surveys conducted by the American Bar Association indicated that 24% of lawyers who passed the Bar in 2000 were no longer practicing law in 2012[1]. Surveys conducted by the International Bar Association indicated that 33% of lawyers under 40 were considering pursuing a different area of the law, while 20% were considering leaving the legal field altogether[2]. Fortunately, many lawyers can increasingly leverage their legal training to pursue alternative legal employment, including quasi-legal positions, alternative service providers including legal tech, ADR/mediation, policy work and education to name a few areas.

The first evolution in the shift away from private practice can be credited to the proliferation of ‘in-house’ counsel positions in the early 1990’s, created largely by banks and insurance companies to try and manage legal costs. Companies have continuously scaled up their in-house legal departments to manage many of the tasks that would otherwise be outsourced to private firms, leading to large in-house legal teams now being  the norm and not the exception. Departing the world of climbing the law-firm ladder, and the immutable law of billable hours, is a change many lawyers are happy to make.

The second evolution came with the growth of ‘quasi-legal’ positions in the mid 2000’s, most notably the creation of specialist positions in the e-Discovery space. With law firms looking to control litigations costs and employ processes to manage the potential thousands of documents that would eventually be turned over in the discovery process. Legally trained specialists were needed in this rapidly evolving e-Discovery space. This specialization allowed lawyers to focus on one key part of the litigation journey, in turn developing novel processes to increase efficiency and reduce client costs. Since this adoption, almost every large international law firm now has a dedicated e-Discovery department.

The legal profession is evolving, and the latest leap forward is the use of AI. Legal technology is advancing at an exponential rate and law firms will need to adapt to stay competitive. This growth in technology will also lead to a simultaneous growth in roles for people who have legal knowledge and the ability to embrace the growth of new technology and processes. ClearyX is at the heart of this evolution! For example, Due Diligence Analysts specialize in all aspects of transactional diligence, while Transaction Managers manage multiple projects simultaneously, both utilizing innovative processes and the use of technology.

It is clear that the profession will continue to grow and change, in turn will creating new alternative legal positions and new ways to leverage the power of a law degree. The future of law has never looked so bright!

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[1] https://www.abajournal.com/news/article/twelve_years_after_the_jd_20_percent_arent_practicing_law

[2] https://www.law.com/international-edition/2022/02/01/over-half-of-young-lawyers-considering-quitting-by-2027-iba-research-finds/?slreturn=20230618104714