Customer-Centricity & AI: The New Paradigm in Legal Tech Innovation
Yesterday's legal tech sector saw product launches, funding, new hires, and acquisitions, with a major focus on AI, customer-centric services, automation, cyber security, and research partnerships in law firms.
Welcome to your Law Tech briefing for July 12th, 2023, covering what happened in legal tech recently.
TLDR; Listen instead:
Have less than a 1 min? Three takeaways from yesterday
- The legal technology sector's continues to shift towards integrating artificial intelligence tools points to a future of further digitalized services, including document management and other legal tasks. Legal professionals should remain aware of any concerns about AI's limitations in cybersecurity and the importance of strong data governance.
- A growing emphasis placed on enhancing customer experience signals a notably more consumer-focused future for the legal tech industry. In lieu of this, knowledge workers should strive to stay current with customer service trends and adapt to changes aimed at improving user interactions.
- The push towards automation is changing the traditional processes associated with the legal profession. This trend suggests that legal professionals should acquaint themselves with the potential of automation, particularly in areas such as the M&A sector, to build efficiency and accuracy in work.
Briefing
Yesterday marked another busy day in the legal technology sector, filled with product launches, new hires, funding announcements, and company acquisitions. Kutana+Brochet introduced a new strategy for legal professionals, aiming to improve client service. Meanwhile, the formerly-named Milestones (now rebranded as Hona) raised $2.1 million in seed funding for its automated case update service, and EDGE Group took its first steps into cybersecurity with the purchase of Oryxlabs.
Legal technology also found a voice in academia, with Lancaster University Management School securing a £1.8m grant for digital technology research and adoption in law firms.
Trends
Artificial intelligence took center stage yet again, from enhancing document management to identifying cyber threats, AI integration has become essential in the legal profession. However, alongside these breakthroughs come concerns about cybersecurity and data privacy. Apart from AI, the concept of automating payment processes in the M&A sector was also proposed to augment efficiency. Moreover, a shift towards customer-focused services is notable – Kutana+Brochet's hiring of Angela Crossland to spearhead customer-experience initiatives and Hona's expansion of its service to include two-way messaging and document exchange attest to this trend.
Analysis
From these developments, several implications for legal technology professionals arise. The focus on AI in legal tasks like document discovery and trial strategy points to the increasing role of advanced tech in the industry. Meanwhile, concerns about AI's limitations in cybersecurity and the need for strong data governance underscore the importance of due diligence in technological adoption. The continuous trend towards enhancing customer experience and interface suggest a more consumer-focused future for the legal tech sector. Furthermore, the move towards automation, illustrated by Boal's encouragement of payment automation in the M&A industry, signals a paradigm shift in how legal professionals operate.
The acquisition of Oryxlabs by the EDGE Group highlights the growing importance of cybersecurity in the legal industry, setting a precedent for other legal tech firms to follow. Finally, Lancaster University's grant for legal tech research represents an exciting development in academia's recognition of this sector's importance, likely leading to more school-industry partnerships and groundbreaking insights.
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Key stories
UAE's defense powerhouse, EDGE Group, has acquired Abu Dhabi-based Oryxlabs. This is the group's first acquisition in the cybersecurity sector, an area they previously lacked expertise in. Oryxlabs brings to the table knowledge in data science, AI, security research, and big data, which would complement EDGE's existing businesses. Buying Oryxlabs is seen as a logical step that would enable EDGE to solidify it's advancing technology solutions. The EDGE Group has been growing rapidly via an aggressive M&A strategy. Observers believe this acquisition will not only help to nationalize the country's defense sector but also fulfill the UAE's ambitions of becoming a pioneer in the cybersecurity field regionally and globally. EDGE's sustained growth and increasing portfolio underpin the growing importance of sovereign capabilities.
Lancaster University Management School (LUMS) has received a significant £1.8m grant from the Economic and Social Research Council and Innovate UK. The researchers will use the funds to speed up the uptake of digital technology among law and accountancy firms - a project to be known as Technology in Professional Services (TiPS). Building on prior research which had aimed to identify barriers preventing such firms from adopting digital tech and AI, TiPS will provide tailored assistance, making these services accessible to under-represented sectors and individuals. The project could offer wider insights into how to accelerate different forms of innovation adoption best. This initiative addresses a current need for a strategy to navigate the challenges of tech adoption in professional service sectors.
Deal-maker or deal-breaker: the legal ins and outs of using AI in M&A (Inside Tech Law)
AI's increasing ubiquity in business operations is driving a surge in acquisitions of AI-focused entities. However, such deals come with unique challenges requiring rigorous due diligence. Buyers need to assess the source code for potential intellectual property infringements, look for biases in training data that could lead to legal issues, understand the liability risks posed by AI performance, and assess the transparency and trustworthiness of AI-driven decisions. Regulations around AI are nascent and vary across jurisdictions, adding uncertainty about legal interpretations of AI-related agreements. Companies must also consider the intellectual property rights associated with the data used to train AI systems. Privacy compliance and cybersecurity are other key issues. Therefore, hiring legal counsel with AI expertise is crucial in AI-related transactions. Legal complexities around AI are likely to increase alongside its rapid adoption.
All stories
Kutana+Brochet hires Document Excellence Group chair to head customer experience (Legal IT Insider)
UK-based document lifecycle management company, Kutana+Brochet, has hired Angela Crossland as a product and client services specialist. With 20 years of experience in the legal sector, Crossland will focus on prioritizing customer experience in the company's projects and will liaise between the company's developers and law firm clients. Kutana+Brochet was established when print software vendor Kutana acquired a significant stake in document template provider Brochet.
Legal tech firm Milestones, now rebranded as Hona, has raised $2.1 million in seed funding from Y Combinator, Ludlow Ventures, and Soma Capital. Hona offers an automated case update service for law firms, integrating with their case management software to facilitate client notifications and document exchanges. Since its 2021 launch, the company has grown to over 20 employees and $1 million in annual recurring revenue. The funds will be used to expand its customer base and enhance functionality.
Legal tech firm Milestones, now rebranded as Hona, has raised $2.1m in a seed funding round led by Y Combinator, Ludlow Ventures, and Soma Capital. The Utah-based company, founded in 2021, has broadened its services from linear cases to include two-way messaging and document exchange. Hona, which integrates with a law firm's case management software, aspires to be the default client portal for all legal practice areas.
Lawyers, Don't Fight AI. Supervise It To Enhance Your Value. (Technology Archives - Above the Law)
The article highlights the growing use of AI in the legal sector for tasks like document discovery and trial strategy. It underscores the need for AI supervision, including understanding its organizational application, risk assessments, and setting ethical guidelines. Strong data governance, AI system performance monitoring, and cross-departmental communication are also recommended. The article concludes that while AI will not replace lawyers, it will augment their work, notably in regulatory compliance and risk management.
Working Assumption: Factors Slowing AI's Impact on Jobs (Technology's Legal Edge)
A working paper published by OpenAI explores the potential impact of large language models (LLMs), such as ChatGPT, on the labor market. The paper finds that LLMs could affect at least 10% of work tasks for approximately 80% of the US workforce, with 19% of the workforce potentially having at least 50% of their tasks affected. However, the paper also acknowledges that external factors such as regulation, internal oversight and accountability, depreciation, workforce considerations, commercial benefit, and changing market expectations could counteract the presumed impact of LLM technology in reducing overall employee headcount.
How product counsel can support business growth (Legal Dive - Latest News)
The increasing need for in-house legal guidance in businesses, especially concerning new technologies and services, has made product counsel roles more crucial. These professionals understand the company's objectives, product, and strategy better than any other attorney, focusing on risk mitigation and creative problem-solving. They must navigate the complexities of privacy laws, such as the EU's GDPR and various US state data privacy laws, and consumer protection laws.
Culture, ethics audits can prevent malfeasance: study (Legal Dive - Latest News)
A study by AuditBoard reveals that companies are neglecting to assess their work culture, missing a chance to prevent corporate misconduct. The study indicates that while 68% of internal auditors see executive behavior as a significant risk indicator, 37% report that their companies do not formally assess or audit culture. The study's authors stress the critical role of a healthy organizational culture in long-term company performance and employee satisfaction.
Guest post: Payment automation – The key to closing deals faster (Legal IT Insider)
Ed Boal, head of legal at Shieldpay, advocates for the use of payment automation in the M&A sector to increase efficiency and speed. He asserts that digital payment solutions can expedite deal times and simplify closing processes. These technologies also help law firms meet client expectations, manage KYC requirements, and guarantee secure, precise transactions. Boal encourages the M&A industry to adopt payment automation for improved success rates.
Platform Africa 2023: Our take-aways (Inside Tech Law)
The Platform Africa 2023 conference highlighted the potential for Africa to emerge as a major data center market, given its young, fast-growing population and capacity for power generation. Despite challenges like energy infrastructure and land rights disputes, the continent could attract international investors to boost its digital sector. Sustainable energy and data center efficiency were also emphasized. However, government intervention is necessary to promote sector growth and resolve existing issues.
No More Shiny Butterflies: How to Choose the Best Tech for Your Law Firm (Attorney at Work)
The article underscores the significance of choosing the appropriate technology for law firms. It suggests that efficiency isn't guaranteed by merely adopting the latest technology but requires understanding and optimizing the firm's work processes. The authors, Karen and David Skinner recommend enhancing existing technology before introducing new tech. They also highlight the importance of correct implementation, including comprehensive training and troubleshooting during the adoption phase.
How AI Could Impact Your Doc Management System (Technology Archives - Above the Law)
The article highlights the transformation of document management in law firms due to AI, with insights from Jill Schornack of NetDocuments on generative AI's impact on document creation and storage. It emphasizes the need for a thorough evaluation of AI tools prior to their implementation, the influence of Microsoft on the AI upheaval, and the value of virtual platforms for teamwork. The piece indicates that AI is poised to change document management in the legal sector radically.
The AI tool ChatGPT, used by lawyers for legal research and document drafting, has raised cybersecurity concerns due to the inadvertent feeding of confidential data by users, risking client information. OpenAI has responded by enabling a chat history turn-off option. The article also points to a rise in law firm data breaches and subsequent class action lawsuits, urging law firms to allocate more than the current 1% of income to cybersecurity.
The increasing cyber threats due to technological advancement require advanced data protection measures. While Artificial Intelligence (AI) can identify and respond to cyberattacks swiftly, it has its limitations and can be prone to adversarial attacks. A combined approach of AI, human expertise, and traditional security measures can improve cybersecurity. Future developments in AI, machine learning, blockchain, and quantum computing could reinforce cybersecurity defenses further.
Calloquy, a platform for remote litigation and court reporting, has introduced new features to improve efficiency and security. These include an arbitration module for witness and evidence presentation, Single Sign On (SSO) for better cybersecurity, improved exhibit presentation, and a "Hot Seat" tech option for exhibit management. The updates also enhance cybersecurity for court reporters.
Renovus Capital Partners, a private equity firm, has acquired Keesal Propulsion Labs (KP Labs), a technology solutions provider for the legal sector. The acquisition will enable KP Labs to enhance its services and offer development opportunities for its team. KP Labs will join Renovus' legal service businesses portfolio, which includes HBR Consulting, LAC Group, and Wilson Allen. Despite the acquisition, KP Labs will continue to operate under its existing brand and leadership.
Most legal departments use discounted hourly rates, survey finds (Legal Dive - Latest News)
A survey revealed that discounted hourly rates are the most popular billing method for outside counsel, used by 83% of legal departments. Standard hourly rates are used by 77% of in-house teams. Other payment methods include flat fees (61%), capped fees (46%), retainers (38%), and blended hourly rates (37%). Success fees or incentives are the least common, used by only 12% of legal departments. The number of law firms engaged by most legal departments remained the same in 2022 as in 2021.
Legal tech startup, Dashboard Legal, has unveiled a resource management tool designed for lawyers. The tool, which integrates with Outlook, iManage, and NetDocuments, enables law firm partners to oversee case assignments and allocate resources effectively. It also offers a snapshot view of ongoing matters and involved lawyers. The tool has been well-received by partners.
US-EU deal eases companies' data-transfer risk — for now (Legal Dive - Latest News)
The European Union (EU) has agreed on a Trans-Atlantic Data Privacy Framework with the US, enabling companies to transfer and store data on US servers in compliance with the General Data Protection Regulation. This reduces liability risks for transatlantic businesses. The framework also aims to minimize US data surveillance and sets up a court for European data removal requests. Critics, however, claim the framework doesn't sufficiently protect against US mass surveillance and intend to challenge it legally.
Dashboard Legal, a legal matter management platform, has launched a partner view feature. This tool offers law firm partners a real-time snapshot of the status of all their cases and work distribution among associates. The data is sourced directly from the associates' platform usage, increasing partner engagement and fostering platform adoption. The feature, which was positively received in beta testing, will be further enhanced with weekly email updates and visual activity summaries.
