In recent years, the number of lawyers and technologists combining forces to develop new legal products through new startups has exploded
The legal services industry, by and large, has no Research & Development component. It’s not in the nature of law firms to set aside resources to pursue innovation. But there is no shortage of legal R&D going on. In recent years, the number of lawyers and technologists combining forces to develop new legal products has exploded.
The map below describes just a fraction of the many legal tech startups active today, sorted by type of service or application. The map is derived from the Discover Legal Technology database hosted by CodeX, the Stanford Center for Legal Informatics. That database currently tracks 558 legal tech startups from around the world, and there are probably dozens if not hundreds that haven’t been added yet.
Click to enlarge the map, or for for a downloadable copy, click here: Legal Tech Ecosystem
The Environment for Startups
This legal tech ecosystem has a number of characteristics:
It’s Extremely Fragmented and Diverse
Global legal startups are banging away at legal markets on several different dimensions:
It’s Subject to Hype Cycles
The more mysterious, the better. The legal media and especially the wider business media don’t get too excited about things like practice management, document automation or contract analysis, even though these areas of the legal marketplace might be the low-hanging fruit. The media attention seems to be reserved for the sexier topics, like blockchain, smart contracts or machine learning. The phrase “robot lawyers” has appeared in dozens of headlines about the future impact of artificial intelligence (AI) in the law, regardless of how misleading that term is as a descriptor of how AI development in the legal profession is likely to play out.
Legal tech startups know this, and they trip over themselves in their efforts to position themselves as the next great AI play and legal industry disruptor. But do not be fooled; some of the more successful startups that are gaining real traction tend to be from the more mundane applications including practice management and legal staffing.
It’s Rife with Caveats and Reality Checks
Legal tech “cannot change the laws of physics,” as Scotty on Star Trek might put it. One of the reasons that the tech startup scene was so slow in coming to the legal market is that the market itself has some inherent limitations:
Even with those caveats and limitations, however, legal entrepreneurs still see that there are significant needs and problems in the industry that can be addressed with the right mix of technology, business model adaptation and execution.
So, Who Wins?
If you are betting on who will succeed, bet on areas where the problems and needs have the biggest scale, such as:
Watch This Space
This is the kind of view of a dynamic industry that will be out of date a week from now. And it goes without saying that it’s incomplete — there are companies that could fit into that map, and arguably several additional categories or sub-categories that could be added, too.
Want to keep up? Watch this space. Indeed, others are watching, too — see Raymond Blijd’s work on LegalComplex, for more recent developments, sources and updates.
This content was originally published here.
