The concept of technology being the future and only future, is a popular one in the legal tech community. Similarly, the idea that technologically resistant firms will reach a point where they are no longer competitive or advanced enough to remain in the market. Vendors and tech-forward law firms alike boast the idea that those who fail to adapt, will ultimately cease to exist in the near future. Such an idea in today’s development climate does hold true to a substantial extent. The rise of sectors such as fintech and the metaverse, areas applicable in and around legal tech validates and perpetuates this idea that technology truly is the single way to the next era.
However, the less glamourous and rarely discussed flipside to this idea is the practicality. Such an idea of a ‘single way forward’ operates on the assumption that all countries begin this transformation on a level playing field. This assumption of course is incorrect considering that every country will sit in an extremely wide range of infrastructure, poverty, and literacy rates. This naturally raises a big question mark about the idea that only technologically advanced law firms will survive, as many law firms in the global view in fact fail to even have consistent access to the internet or electricity. Additionally, there may be a significant lack of people who are not only educated and qualified to work in a law firm, but at the same time have technological awareness.
When speaking to Jacob Beckerman, CEO of CoParse about technological transformation in countries beyond the first world, he poses two questions to ask. Firstly, will parts of the law becomes productized? And secondly, can the structural barriers to monopolisation be overcome? Jacob says “If both of these things are true, I believe a competitor will emerge and capture market share from existing players. In other words: a classic disruption story that forces the market to advance. Due to information asymmetries and switching costs, this new entrant will not capture >25% of legal spend, but rather will capture a significant portion of a specific segment, likely, SMBs and other cost-sensitive players, until other firms adapt.”
“If both of these are not true, then I believe we will see a slow transition of the sort currently happening. Technology-resistant firms will continue to do fine, albeit not as well as tech-enabled firms, and laggards will not lose too much market share.”
When asking Jacob about his current stance he says, “I believe the answer to both of these questions I have posted is ‘yes’. To the first question about productization, I find this self-evident given the repeated nature of legal work. To the second, I think this can be solved with new law firm corporate structures that permit sharing of scale-benefits of technology. A high margin, productized entrant that captures monopoly profits (in the economic sense) would actually be a boon for law, as it would not be a “cash business” and would be able to invest retained earnings in R&D to continue growing its scope like a BigTech company does.
Consideration of these humanitarian factors begin to form cracks in the foundation of the idea that technology is the only way forward. Yet, the notion is not entirely ‘debunked’ or false. Rather, the case is quite simply that the current conversation fails to acknowledge the realities of turning the whole world’s legal industries fully tech-enabled. The statement can still be true while acknowledging that the roles of both technological and human advancements go hand-in-hand as necessary to achieve this goal. Jacob touches upon ways that despite the obstacles, technological transformation is still possible in countries with less or limited access to resources.
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