Navigating a Growing LegalTech Marketplace

Oct 2021

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A long-held business hypothesis is that technology makes you better, faster, and more productive; it is accretive to business value. We have all seen technology that validates this, and witnessed how our organisations have reaped the benefits associated with successful tech adoption.

At KWM we recognise that acquisition is just the forerunner to a range of activities that come with the technology. Activities that support embedding technology within a business go beyond acquisition and include selection,  commercial agreements, fit for purpose implementation plans, integrations, scaling and product management.

Driving adoption of technology is one way we are creating value for our clients who are operating in cost conscious environments. Transformation at KWM drives technology adoption by looking beyond acquisition to consider data strategy, change management, service design, and business modelling.

There is an increasing volume and variety of LegalTech offerings entering the market, and the lack of clearly defined categories can add to the list of issues for business professionals to consider. It is early days with the categorisation of products still being settled, making the selection and volume of products hard to navigate. At the same time, with venture capital investment in LegalTech at a record levels  (more than US$1billion already), the growth and scale of the market is showing no signs of slowing down. To put the 2021 investment level into context, it is double the US$510 million invested last year and the previous high of US$989 million in 2019.

Given that technology creates business value and the growing wave of available LegalTech, why is the legal sector slow in its digital transformation journey?

“The greatest danger in times of turbulence, is not the turbulence; it is to act with yesterday’s logic.” – Peter Drucker

New technology is a catalyst to redesigning ways of working. This connection to the way people work and what they deliver means they are central to realising the business value of any newly acquired technology.

Technology rarely solves an entire pain point on its own. It usually forms part of a solution that augments the activities of business professionals and lawyers. This process of re-engineering or legal service design activities are needed to engage, observe and understand the intended and unintended impact on users. Given the skillsets and time it takes to perform this analysis, solution jumping is rampant. Organisations often fail to take advantage of one of the critical steps in change management, building awareness and deep user empathy and understanding.

“Timing beats speed, precision beats power.” – Connor McGregor

Barely a day passes when I don’t receive an email from a LegalTech vendor explaining why I need their product. The last line encourages me to schedule a call to discuss how we can access their technology.

It has been rare that when we seek to solve a pain point, serendipitously the right technology has landed in my inbox.

Precisely defining and prioritising your pain points or the ways of working you desire to improve, remove or innovate is at the foundation of selecting the right technology at the right time.

Top 8 tips for navigating LegalTech

Managing your current work level with the analysis required to acquire new technology makes it hard to know where to start. Below are my Top 8 Tips for navigating LegalTech for your organisation:

  1. Work with your Technology Team to create a shortlist of baseline requirements for acquiring new technology. This list should be straightforward to support you and LegalTech vendors to align with organisational criteria.
  2. As you receive emails from technology vendors, file them in a folder for ease of searching at the right time. This folder will start to form part of your market map of LegalTech.
  3. Ask LegalTech vendors who they deem to be their competition. This will help you create genres, and identify where their offering fits. It can be beneficial to categorise using pain points for ease of future reference.
  4. Some of the most significant gains can come from people and process redesign. Before selecting technology, you need to understand the pain points you are seeking to solve. Observe how the problem manifests in a variety of settings and for various people. Involving people within the business on this journey of discovery will provide the richest insights into your business requirements. These people will also become your strongest allies when it comes time to implement a solution, as they have been involved from the beginning.
  5. Breaking an activity into parts helps you to clarify which steps a technology could augment.
  6. Gather as much information you can about how often, when and who experiences the pain points. This information will help form your starting point.
  7. Collect and prioritise your pain points or the new ways of working your organisation desires. It is rare for prioritisation to be static. It should align with changing organisational and team objectives.
  8. Seek to understand if existing technology within your organisation can solve identified pain points – there could be system functionality or new solutions in a vendor’s product suite that could be leveraged.

In order to validate the starting hypothesis, (that technology makes you better, faster, and more productive), it is imperative that you measure the progress and impact of the solutions you implement. Refer to your business requirements and success metrics and, periodically analyse solution usage, access levels, time savings as well as outputs. Using this information, you can plot the progress and impact of your digital transformation efforts.

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