“Nothing is so painful to the human mind as great and sudden change” – Mary Wollstonecraft Shelley
The legal industry is changing. No more than 10 years ago, words like flexible, innovative, value-driven legal solutions would not have been in the vernacular of lawyers – and NewLaw, alternative legal service providers or law company’s did not exist. The practice of law was a privilege bestowed upon the select few who had money to study it, the resilience to endure the long hours and the tactical nous to implement historical doctrines that had stood the test of time. The new age of smartphone’s, smart tablets and even smarter service providers has created the phenomenon known as “NewLaw”.
NewLaw is a blanket term that has been coined to cover any legal service or solution that is the antithesis of BigLaw, or otherwise more plainly - describes any model, process, or tool that represents a significantly different approach to the creation or provision of legal services than what the legal profession traditionally has employed. The Global Financial Crisis, regulatory change, globalisation, changing power paradigms of general counsels and technology are some of the main drivers for the rise of NewLaw. Hot topic of the day is how technology can facilitate greater efficiency and accuracy to simple legal tasks and whilst change can be intimidating to those entrenched in the legal industry, it is also providing huge opportunities and potential. Legal consulting firms and other non-traditional legal structures are using technology combined with an astute legal mind to create more client-centric solutions. Asia, with the sheer volume and sophistication of its labour force, while a late adopter is slowly taking hold of NewLaw and we wanted to take a closer look at trends occurring across Asia, how this compares to the rest of the world and what the future looks like for the legal industry.
Trends across Asia
In June 2017 at The Legal Inno’ Tech Forum, the keynote speaker Mitch Kowlaski said, “The current legal services delivery model is at the end of its natural lifecycle. And the only people who don’t know it are members of the legal profession”. One of the major driver’s of such trends in Asia is the development of a global economy and that purchasers of legal products are demanding greater efficiency and a better product for a lower price. This is putting increased pressure on the long established “partner/associate” model and the development of a new model; where between 30-50% of junior legal tasks can be completed by using artificial intelligence.
In many jurisdictions this is seen as a threat to the legal services market, however in China they’re being praised for embracing the transformative power of Artificial intelligence. Firms such as Legal Miner are at the forefront of such change. Legal Miner combine data mining and legal analytics expertise to; “reveal the enigmatic Chinese decisions in an extensive, systematic and visual manner”. The key to their recent success is the collaborative workplace in which lawyers work in conjunction with technology experts to continually advance the system. Most significantly, the development is based on making the Chinese legal system more transparent and facilitating business ventures from overseas. The court system has also embraced the use of technology employing online legal assistance for court users and employing e-filing systems for documents.
In Hong Kong, Heidi Chu, Secretary General of the Law Society recently stated, “AI’s impact on the routine tasks of our day-to-day practice like timekeeping, legal research, contract review or due diligence analysis will only intensify in the years ahead”. Mr Chu went on to say, “Understanding and using technology intelligently to support the operation of our legal practices should be a priority in these changing times”. One company who has pounced on the opportunity in Hong Kong is KorumLegal. By focusing on the three keys of any in-house department – people, process and technology – KorumLegal delivers client-centric solutions at the fraction of the price of a major law firm or the Big 4. With lower overhead expenses than comparable contract lawyer solution providers, it can offer top rate talent at half the cost of a traditional law firm. And as the drive to be more efficient in-house continues to mount, KorumLegal has brought the best practices from the world of legal process management to deliver efficiency gains and fully integrated technology solutions to in-house departments across Hong Kong and the greater Asian landscape. The two key factors in the growth of alternative legal services providers in Hong Kong are (1) the integration of technology into the “DNA” of the company, right from its founding and (2) a revenue model that benefits from efficiency. The entrepreneurial landscape of Hong Kong’s business environment provides the perfect setting for NewLaw to flourish. A favourable time zone, access to advanced technology and a highly educated and progressive labour force suggests that these trends should continue and alternative legal service providers who embrace technological change in Hong Kong are likely to flourish.
We’re seeing similar trends in Singapore with companies such as Legalese recently attracting US$418,000 in investment from venture Capitalist group Walden International. Legalese plans to invest the money into future research and development into computational law, “a computer science-based approach to the generation, management, and execution of legal paperwork”. This appears to be the most successful model for firms to excel in the legaltech space; the collaborative function of technological experts working in conjunction with legal experts is a very powerful and profitable business model. Singapore is very keen to be the central legal innovation hub of Asia. The FLIP (Future Law Innovation Programme) which is part of the Singapore Academy of Law is a great example of collaboration between government, legal innovation and technology. The programme through a LegalTech incubator offers support and resources to forward-thinking law firms and LegalTech startups to switch to a brighter, innovation-driven future and has made waves in its first year of operation. With the government providing a lot of support for LegalTech and NewLaw in Singapore it’s one of the most prominent hubs for legal innovation in Asia.
Around the world
The World Intellectual Property Organisation released figures in 2017, which mapped the filing of patents relating to new legal services technology from 2012 to 2016. In 2012, 99 patents were filed. This increased by 484% to a whopping 579 patents filed in 2016. This illustrates the dramatic growth in the industry with the leading players emerging as the US (38%), China (34%) and South Korea (15%), showing that whilst US remains at the forefront of legal tech, the Asians statistics are continuing to grow and with such a formidable and sophisticated labour force, these figures are only predicted to rise. It is important to recognise the UK as well, as another major player in the market. Parliament enacted the Legal Services Act 2007, now some time ago, with the core purpose of changing the business structure of law to include non- lawyers in significant positions of power. Effectively, this facilitates the ability for a multi-national to have internal legal counsel and a law firm to become a multi-national. This inherent “blurring of the lines” surrounding legal firm structure is emblematic of what is occurring in Asian companies as legal experts team up with non-legal, technology experts, to drive the future of legal services.
The prefix to this article mentioned the quote by Mary Wollstonecraft Shelley, the author of the novel Frankenstein (for those playing at home). You may be wondering what the author of a novel about the creation of a grotesque but sapient creature in a science experience experiment, has to do with legal tech, but it’s her insight into change that we’re most concerned with.
Change can be scary and for a junior lawyer who’s told that up to 50% of your tasks, may now be completed by a machine, the fear is only emphasised as you look back over the 6 years you spent at university and the monumental student loans, you’d “prefer not to think about”.
However, it is also lawyers at the pointy end of the spectrum who need to be wary of technological challenges. The market is full of alternative legal service providers, online legal resources and flexible and innovative alternatives to large law firms. Previously, law firms could hide behind inflated fees and rigid service structures, but as we’ve mentioned technology is changing the access to legal services and facilitating the growth of a new market where the client is king, overheads are low and lawyers are using technological tools to provide a far more efficient service. The good news is; there is huge opportunity for lawyers of the next generation who embrace this change, have a commercial appreciation and can use technology to contribute to the every-growing efficiency of the legal market. While NewLaw in Asia is only just beginning to prosper, the opportunities for growth are huge, just don’t be caught at the boardroom table with your highlighter in hand, wondering where all the work went.
About the Authors
Annalise Haigh transitioned from "BigLaw" into "NewLaw" almost a year ago and is a true believer in the capacity for new innovative legal solutions to improve the legal sector for the better. Her current role at KorumLegal epitomizes this belief.
Annalise wears two hats - as an Australian qualified lawyer, she is a KorumLegal Consultant assisting clients come up with innovative legal solutions and also as a business strategist, she works closely with KorumLegal's core business, managing the marketing and online community strategy.
Outside of KorumLegal, Annalise’s great passion is snowboarding.
Tom Hill qualified in Sydney, where he practiced in a large international law firm specializing in Insurance Litigation and advising on a range of General Liability claims.
Having relocated to Hong Kong in early 2018, Tom has worked as a Legal Consultant at KorumLegal advising a large multi-national bank and now advises on Commercial Transactions in emerging markets throughout Asia.
When he's not "lawyering", you'll find Tom playing in the Premier Hong Kong Rugby competition and he hopes to play for the Hong Kong National Side, once he becomes eligible in 3 years time.