A landscape in transformation

Malin Männikkö
DLA Piper, Stockholm
Malin.mannikko@se.dlapiper.com

Discussion on legal technology (legal tech) at the 7th Annual IBA European Start-up Conference roundtable on 13 November 2024.

The Operaterrassen (home to Stockholm’s Opera House), adorned with linen-covered tables, wall-to-wall carpeting and expansive windows facing Kungsträdgården (a park in central Stockholm), provided a picturesque setting for this year's IBA Start-up Conference roundtable discussions. I had been invited to moderate a roundtable discussion on the theme of legal tech, and Viktor Leisnert joined as expert from EQT (a global investment organisation). Despite the traditional setting, our roundtable offered modern insights into the future of the legal profession.

Enablers, disruptors and the hybrid law firm

Leisnert initiated the discussion by tracing the evolution of legal tech from simple enablers to powerful disruptors, ultimately aiming for the ‘almighty virtual lawyer’. Initially, tools like document automation and digital platforms improved efficiency by handling repetitive tasks and introducing standardisation. Now, generative artificial intelligence (AI) is challenging traditional legal roles, aspiring to match the expertise of a seasoned law firm partner.

Participants, on their side, noted trends such as law firms outsourcing tasks to paralegal firms and the rise of hybrid law firms. These hybrid firms blend technology with human expertise, automating routine tasks while relying on lawyers for complex issues and unexpected challenges.

Challenges

While participants shared examples of how they make use of AI today – from summarisations to drafting – noting the incredible time saving benefits. The question of why the almighty virtual lawyer hasn't emerged in hybrid firms yet appeared. While the answer might lie in the fact that the technology isn't fully developed yet, Leisnert, and many participants with him, discussed the legal industry's conservative nature and historically slow adoption of technology. Public narratives today suggest that there is a change in tech adoption, even in law firms, however the actual use of legal tech tool behind closed doors remains uncertain. 

Another challenge is the traditional law firm business model. Leisnert highlighted the potential for increased profit margins through successful tech integration, which is becoming essential for competitiveness. Some firms have even developed their own tech solutions – offering them as separate products for anyone to use – suggesting that diverse, hybrid models could be successful.

Technical challenges still persist. AI systems today often lack access to key legal databases, limiting their research capabilities. Usability issues are also common as many AI tools are not integrated into the platforms lawyers frequently use, like word processors and email clients. In addition, AI tools are at this stage primarily focused on individual efficiency gains which poses challenges in illustrating the true disruptive capabilities these legal tech tools may have.

Reskilling and the future

The discussions concluded with a focus on the upskilling of lawyers. One participant questioned whether a 20 per cent reduction in lawyer proficiency would be detrimental, sparking debate. Some argued that the question of training junior lawyers will resolve itself, while others maintained that the challenge has to be solved head on by law firms and legal departments. Most participants seemed to agree that at the end of the day, everyone has some individual responsibility for their professional development and that part of this is to progress in leveraging technology at work.

Conclusion

The discussions at the IBA Start-up Conference roundtable highlighted the pivotal moment for the legal industry that we are living in now, where technology is not just an enabler but a transformative force. As legal tech evolves from basic automation to sophisticated AI-driven solutions, law firms, legal departments and lawyers alike are presented with both challenges and opportunities. The integration of these technologies promises enhanced efficiency and profitability, yet it requires a shift in mindset and potentially business models. The legal profession must embrace this change, investing in both technology and the upskilling of its workforce to remain competitive. Ultimately, the future of law will be shaped by those who can adeptly blend human expertise with technological innovation, ensuring that the legal industry continues to thrive in a rapidly changing world.