Research finds widening lawtech gap between larger and smaller firms 

Major new research into innovation in the legal sector carried out by the University of Oxford on behalf of the Solicitors Regulation Authority (SRA) has found that while adoption and use of technology has soared over the last 18 months, there remain barriers to adoption, particularly for smaller firms. 

Information was collated from nearly 900 survey responses from SRA-regulated law firms, interviews with more than 50 stakeholders from across the legal, technological, investment and government sectors, and wider analysis of information from leading online recruitment and investment databases.

Researchers found 87 per cent of firms now 'meet' clients via video conference and two thirds store data in the cloud. 90 per cent of firms, regardless of size or sector, reported that changes made to help navigate the pandemic had been made permanent.

The adoptions and use of technology was found to be highest among younger firms, those that used alternative business structures and those that work in areas where technology was already established.

Just over a third (37 per cent) of firms reported they used “more advanced technology”, such as automated documents, interactive websites and artificial intelligence. 

The development of bespoke legal technology was found to be largely focused on advances which will benefit larger corporate clients, with funding and scalability issues being the main barriers.

For firms working with individuals and smaller businesses, affordability, a lack of inhouse technology skills, and uncertainty over the benefit of making an investment were the most commonly-cited reasons for not pursuing access to more advanced or targeted technology. 

Researchers identified three key areas of focus to facilitate greater development and adoption of innovative technology in legal services. These were:
•    greater support and co-ordination among government, regulators and tech developers – especially in terms of encouraging innovation and identifying funding paths;
•    increasing public and law firm trust in new approaches and technologies; and
•    increasing the technological and innovation skills and knowledge bases within the legal sector.  

Chair of the SRA, Anna Bradley, said: “Supporting innovation and the adoption of legal technology is a key priority, as we set out in our Corporate Strategy. It can help increase access to justice for the public and small businesses, as well as supporting firms to be more efficient, benefitting everyone and the economy as a whole.

“These findings drive home the fact that when we talk about technology, we need to remember just how broad that term is and how far there is for some to travel. This is not just about artificial intelligence, virtual reality or future technologies. Some of the innovation which has the greatest potential to improve access to justice at pace is already available. Such technology can be applied widely and be used on a day-to-day basis to benefit both consumers and law firms. The challenge now is how we all work together to enable this to happen.”

Professor of Management Studies at the University of Oxford and research project leader, Mari Sako, added: “Technology and innovation have already changed, and will continue to change, the face of the legal services sector. Our research provides robust evidence of this.

“But we also found that benefits from legal technology are not evenly distributed across different market segments. Regulators, including the SRA, collaborating with other stakeholders could play a major role, not only to lower regulatory uncertainty but also to level the playing field across the market segments.”