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HomeEuropeELTA 2024 Predictions: Western Europe

ELTA 2024 Predictions: Western Europe

Austria

The situation as of mid-2023 is that few true legaltech startups have gained traction (fairplane.at, notarity.com). Legal Tech is fostered by the two major legal publishers via their databases and by law firms, the latter with differentiated success.

Currently we see the interest in AI powered applications rising, the topic has left its bubble and arrived in a broader target group, there creating a lot of uncertainty. For the next months we expect that the database providers will gain an even more prominent role in thriving innovation in terms of machine learning (AI) by offering AI-powered search instruments over their content. Secondly, large entities such as law firms, accountants or corporate legal will use the same technology to finally achieve profound access to their own content. Thirdly, the new Microsoft Copilot will enter the legal world, smoothly moving customers towards AI.

The large question mark is the legal framework, from the AI Act over data protection law, copyright law to professional ethics. And classic LegalTech might be eaten for breakfast by AI, at least until the first disillusion sets in.

Wolfgang Pichler

ELTA Ambassador Austria, Chief Evangelist, MANZ Verlag

Germany

The adoption of Legal Tech in law firms and other legal related corporates will further evolve in Germany within 2024.

Driven in particular by the need to improve efficiency, quality, and competitiveness in the face of growing client demands, regulatory complexity, and market competition, Artificial intelligence (AI) will (still) be the dominant topic in 2024. In addition, AI will be an emotional enabler to further generic digitalization, such as data extraction, redaction and complex document automation plus the establishment of (simple) legal workflows in-house.

Therefore, legal tech in Germany will focus on developing, applying, and implementing AI solutions that can benefit lawyers, clients, and society. In addition, new business models such as regulatory advising or advising clients on their AI strategy and implementation will be created.

AI will also be an enabler in the context of Legal Justice.

Therefore, AI will continue to attract attention and investment from legal practitioners, academics, policymakers, and stakeholders in the next years, as they seek to understand, adopt, improve, and regulate this technology. The dominance of big players, especially Microsoft, will make it difficult for legaltech startups to receive funding, but not to find clients. Fear of missing out is huge in the industry now.

Henrik Wehrs

ELTA Ambassador Germany, Legal Tech Manager Europe, Allen & Overy

Portugal

2024 could be an interesting year for Portuguese legal tech.

We hope that the new law on Professional Orders will stabilize and with greater liberalization new startups will appear in the area of providing legal services or, at least, facilitating them. In any case, it is important to note that the climate created by the Bar Association also scares entrepreneurs who are shying away from legal volatility.

On the government side, the strong digitalization of public justice services is expected to continue, although with confusing interconnections with the private sector, which limits innovation to state capacity.

Legal tech remains more or less the same with interesting growth although still with some inability to internationalize. At the moment, Portugal has startups such as Legau, Datalex, Arkeyvata, DocDigitizer, Lyme, My Data Manager, Portal da Queixa, Valdoc, Smarter Succession and Software Houses and Consultants such as InovaLegal, Roox, Genesis Studio and Legal Walkers.

Marisa Monteiro Borsboom

ELTA Ambassador Portugal

Gonçalo Piriquito

Cofounder APLT

Switzerland

While the majority of legal professionals in Switzerland acknowledge the ongoing transformation within the legal industry, breaking away from traditional frameworks and incorporating new technologies, remains a challenge for many small law firms. It is corporate legal departments, large commercial law firms, and a select group of forward-thinking legal protection insurers in particular who are taking the implementation of advanced technology in the legal sector seriously. These entities represent the most intriguing partners for legal tech companies, and this trend is expected to persist through 2024 and beyond. 

Legal tech providers have to operate within a relatively small market. Platforms that focus on scalable solutions for consumers (think: legal fracking) face the challenge that Switzerland has only 9 million inhabitants, who also live in three different language regions. On the other hand, price sensitivity is not as pronounced as in other countries. As long as the services are convenient and reduce any litigation cost risks or promise a quick solution, there is potential to find customers. Despite its small size, the legal market is highly lucrative. The combined annual revenue generated by the legal, tax, and audit sectors in Switzerland amounts to approximately €12 billion per year.  

The hype around generative AI has had a positive impact on the legal tech sector. Lawyers have become at least slightly more aware that technological solutions can increase their efficiency, and  citizens appreciate the convenience of using online services for legal matters. This current state creates opportunities for legal tech vendors to attract investors. Overall, these developments provide an encouraging foundation for innovative minds to propel further advancements in the legal tech field in Switzerland.

Ioannis Martinis

ELTA Ambassador Switzerland, Head of Legal Tech, Coop Rechtsschutz AG

Where is the change more likely coming from? If the legal market in Switzerland is rather small (~$3.2Bn, source Statista), one should look at the figures from a qualitative perspective.  Our experience is that change is more likely coming from (international) law departments than law firms who are to a very large extent still following the billable hour business model.  This is even more pronounced in Switzerland where you have primarily local practitioners with one or two exceptions.  By contrast, you have many regional head quarters of American companies (e.g., P&G, Mondelez International) that can “import” progress from their home country (deemed to be the most advanced, this is where CLOC and Gen-AI was born). 

Switzerland, regional or global hub sale strategy. This means that legal tech providers can integrate Switzerland as part of a broader sale strategy targeting the regional or global hub of Swiss companies (e.g., Nestle, ABB, Zurich Insurance).  This will enable them to roll out their solution in potentially all the countries where their clients are active.  There may be some regulatory restrictions, e.g., affiliated companies based in Saudi Arabia will need to have a data center located in this country. Another constraint may come from the matrixed organization of large corporations: legal tech companies will have to convince the head of legal ops based in the USA for example. 

AI making legal tech a burning platform?  The legal market is a hard nut to crack!  The head of legal tech in one large bank in Switzerland explained that he receives calls every week from his peers asking to buy this “cool” piece of technology.  When he asked what challenge you are trying to solve, there is no response…  The other feedback we hear regularly, is value for money issue: “people are using only two per cent of the functionalities of a 1 million annual license fees CLM”.  Will Gen-AI help solve those challenges?  It may subject to two conditions. First, legal professionals need to embrace change and surround themselves with experimented versatile professionals who can help them get data, know where they are and where they want to be. This requires involving the board of management to secure proper budget and alignment with the overall business strategy.  Second, Gen-AI tool needs material improvement. If drafting capabilities are outstanding, it does not embed the right level of qualitative (legal) data.  As Mr. Covey (Speed of Trust) explains, start with the end in mind, this is a journey…  

Alan Ragueneau

ELTA Ambassador Switzerland, CEO, Dentons In-House Solutions Europe

United Kingdom

In 2024, firms across the UK will look inward to guide legal tech adoption, searching for bespoke solutions to specific challenges. They will identify current processes, desired outcomes, and what potentially holds them back to cut through the noise from the plethora of legal tech solutions popping up. 

Firms will attempt to add tech solutions that integrate well with processes already in place. Challenges include a lack of integration options and siloed data, often mitigating benefits. Expect tech designers to adapt, providing more flexible approaches to how firms connect various data sources. 

AI and automation will continue at the forefront, with teams looking to simplify document review, legal research, analysis, and more, ensuring lawyers have business tools that fit their daily routines. 

Here in the UK Cyber & Data privacy will continue to hold the spotlight with firms dedicating more tools to manage and protect information, especially in highly regulated sectors like finance and healthcare.

Jeremy Small

ELTA Ambassador UK, CEO, Jameson Legal

Sophie Best

Senior Legal Tech Consultant, Jameson Legal Tech

Photo by Suzy Hazelwood: https://www.pexels.com/photo/shallow-focus-photo-of-world-globe-1098515/

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