The future of legaltech is bright and inescapable. Law firms that embrace this changing landscape stand to survive and thrive, most of all those who carefully choose where to locate their business states Niamh Breslin, Territory Manager UK at IDA Ireland.
Early adopters of technology are now reaping the benefits of embracing digital solutions with respect to improving efficiencies, costs savings, and customer satisfaction. Certainly, law firms faced additional obstacles to other services sectors which resulted in the slower adoption of software and digital delivery so prevalent in the professional services sectors, not least in finance. First, and perhaps most fundamentally, the legal profession’s core role is to reduce rather than introduce risk. The idea, therefore, of implementing a new platform and changing historical practices and processes triggers immediate concerns. Yet, as technological developments evolve, this becomes increasingly more a mental than physical barrier for the sector. The tech industry is based on a process of trial and error, of course. But as errors are ironed out over time, the risk to the legal profession of digital adoption is reduced, as least to those flexible enough to perceive future digital adoption.
Second, is the cost of adoption. Incorporating technology into everyday practices requires an infrastructural change often relying on funding from partnerships and senior lawyers, many of whom are reluctant to make significant changes to the status quo.
And third, utilising the technologies relies on the ability of lawyers within the practice to acquire the technological knowledge to operate the software, which can require extra resources, time and money. And, such concerns also feed into the pre-stated mental barriers resisting adoption.
Where does the law market stand today?
But, as stated, things are moving. Traditional mentalities are being trumped by fast-evolving client expectations are fast evolving of supplier efficiencies with respect to technological adoption. Instant communications are now across the board within business-to-business practices, with no exceptions given for the legal profession. Clients appreciate that quality legal services cost money but have significantly raised their expectation of what can be completed in an hour, a standard all law firms are now judged upon.
Take, for example, the legal process of “Discovery”, infamous for its tedious and time-consuming nature involving the manual working-through of hundreds, if not thousands, of complex documents and emails. Technology has revolutionised this process by creating automatic search engines – ultimately rebranding this process to “eDiscovery”. Relativity’s technology, for instance, is widely used by lawyers to search and store various documents, automate contract review, regulatory work, and due diligence. As a result, this development has become increasingly popular in the US, with almost all the biggest 200 law firms in the US (by revenue) choosing to implement “e-Discovery” into their processes.
Artificial Intelligence is being incorporated to a similar extent. AI legal research tools such as Thomson Reuters Westlaw Edge™ can efficiency and quickly perform tasks and services that have traditionally utilised a law firm’s resources.
All of which means that “legaltech” – as it is becoming known – is expanding into key markets such as North America and Asia at pace. Indeed, in Asia, 73% of legal service providers are keen to step-up their legaltech adoption rate. But the big question is not who is suitable for this task, but where.
Choosing Ireland
Examining some of the largest global firms – such as Simmons & Simmons, Bird & Bird, DLA Piper and Dentons – it is noticeable that all have chosen to centre their European base in Ireland. This is not by coincidence but a result of the flourishing legal ecosystem within Ireland.
For instance, Ireland’s educational system boasts the highest level of STEM graduates per capita in the EU, a prime breeding ground for a strong tech workforce. Furthermore, 25% of Irish graduates come from business, administration, and law courses which equipped Ireland with both the quality and quantity of graduates required for the legal services industry. Alongside this, the Irish government has invested specifically in the AI industry, signalling its commitment to the future of technology’s role in all sectors. Ireland invested EUR700m in Research Centres, resulting in 1,000 students earning Ph.D degrees in the past five years with an additional EUR100m committed to support an extra 700 Ph.D. students. This has contributed to Ireland earning the highest number of EurAI fellows per capita and holding the highest share of enterprises utilising AI in the EU. Certainly, Ireland’s investment in both talent and AI makes it the optimal location for law firms embracing digitalisation.
Ireland’s relationship with the EU and US
More widely, Ireland’s membership of the European Union has mitigated the complications arising from an increasingly transnational world economy where there exists a diversity of legal systems. With increasingly harmonised laws within the EU, this has enabled easier operations for member states. Further to this, IDA Ireland, Ireland’s foreign direct investment agency, provides partners and support – including grant programmes for supporting investment projects, aid for bespoke training and management mentoring and incentives for R&D activity as well as environmental initiatives – to help companies who move to Ireland.
Furthermore, Ireland is the only member state of the EU with a prominent financial centre that practices common law. As the legal tech wave started in the US, this similarity has enabled working within the common law system a further advantage to creating a base in Ireland. In comparison to continental-style coded law, common law allows increased flexibility and innovative legal processes, proving beneficial for delivering innovative services for clients. Given this, and following the UK’s decision to leave the EU, Ireland has inevitably become the prime location for law firms within the EU as well as those looking to access the EU whilst maintaining a common law advantage.
The case for law firms to incorporate technology is fast becoming an easy win given its proven ability to ease and quicken legal processes. Companies of all sizes, who restructure and incorporate technology, will stand to benefit the most in the future. As the digital world continues to expand further on a global scale, the more key centres of excellence will emerge that will draw in talent in a self-reinforcing virtuous circle. Ireland is well positioned – and is indeed well on its way – to becoming such a centre.
Niamh Breslin
Territory Manager UK
IDA Ireland
