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Barriers to LawTech adoption:
Uncertainty in the market

 
 
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Jeremy Coleman (Head of Innovation and Legal Technology) and Pat Cullen (Legal Technology Programme Manager) from Norton Rose Fulbright, on whether uncertainty in the legal market is hurting LawTech startups, the challenge of meeting firms’ high standards and the rewarding relationship of working with startups at an early stage.

Is uncertainty in the market creating barriers hindering the adoption of technology in the legal industry, including LawTech?

[Jeremy Coleman] I think there is pressure on organisations to consolidate their vendors. There are real impacts, both in terms of cost and time, to managing a large stable of vendors.

General uncertainty because of COVID and the world moving at an incredibly quick pace has generated some reluctance to engage with startups because firms have confidence with the big players, the household names in the market. The track record gives them confidence.

What are the other barriers currently impeding LawTech startups?

[JC] For any large organisation it is difficult to take a new technology from a pilot to enterprise-wide use. This can be further complicated when the technology provider is a startup. Scaling the use of tech within a large organisation requires a significant investment of time, resource, communication and a commitment to proper change management. Startups will often not have the resources to support an enterprise roll-out, because that requires continual training and support; we are paying for both of the “S” in SaaS.

Another barrier that we keep seeing LawTech startups fall at is appreciating just how high law firm information security standards are and the extent of information required to satisfy our internal infosec teams. We need to understand where data is being stored and how it flows between systems, every detail, mapped out, every third-party component and module included. It is not fair, but startups will need to stand up to the same scrutiny as larger vendors.

The next hurdle is the contract. A three-page terms and conditions is cause for concern and will just not cut it. We appreciate that is costly and time-intensive to get a proper contract in place as it is to obtain security certifications, but this is what is required to deal with a large law firm, who are themselves a custodian of client data.

How can we close the gap between larger firms’ compliance requirements and a LawTech startup’s more limited resources?

[JC] It’s a good question but there’s no easy answer. I think if a startup understands the lawyer’s role in the large commercial space and the demands and constraints that are on the law firm to perform this function, that will go a long way to building confidence.

For example, the high security standards that law firms have are not ours, they are imposed on us as suppliers of professional services to other much larger organisations. We have a lot of large clients and all of them have slightly different views on information security standards. We have to take all of these different standards and create something that accommodates all those different standards and then apply them to our own suppliers.

Extensive information security packs should be available and ready for review early on in any conversation with a law firm. It is so important to demonstrate to a law firm that you understand what kind of data you are proposing to hold and that you will apply the same attention to its protection as the law firm itself. Certifications, such as ISO27001 will also help. We know it is expensive and time-intensive to do this, but it is necessary.

Single Sign on is a key feature that all SaaS vendors should now have available. We already require it from all our SaaS vendors. 

The ability to export is really important. A lot of LawTech proposes to eliminate or automate burdensome administrative tasks, but a lot of the admin-heavy tasks are done that way for a reason. Further still, these tasks will usually need to be done in a particular order and at a particular time in the transaction. If for some reason the solution does not work or goes down at the critical time, having a backup or some way to extract the documents or information, means that the lawyers can, if needed, revert to the manual way of doing things.

Detailed usage reporting helps us have increased confidence in a supplier. We never start a relationship with a startup on an enterprise basis. The way we grow the userbase is by demonstrating ROI. If the organisation is getting real value from the money we have invested in your technology, then we can invest more and scale to more users. If we cannot see who is using it, how much they are using it and in what ways they are using it, justifying additional investment is difficult.

 

What are the challenges of adoption once you have cleared the initial hurdles and have a foot in the door at a firm?

[Pat Cullen] That's when you have to start considering personalities and psychology. Does the organisation take change management seriously? What methods of changing behaviours are you going to employ? Are you going to use a top-down approach where a senior partner or practice group leader sponsors or champions the use of a product? That’s usually the fastest, but most lawyers do not like to be told what to do and these kinds of champions are hard to find. The more common way is the bottom-up approach, through hearts and minds, which is hugely more resource and time-intensive but can be more effective over the long term because people are getting to make their own decisions.

You also need to think about the range of activities required to drive engagement and adoption. It is easy to schedule some training sessions, but vendors need to be able to help firms sustain adoption over a long period of time, usually several months. As well as training tailored to the audience, vendors should also be prepared to deliver use case ideation sessions, one-to-one sessions with key stakeholders and time on firm-wide townhalls. Creating content that can be delivered to these audiences isn’t easy but is essential to sustaining and growing the adoption of your product.

Firms also like to know how well adoption is going. Be proactive about presenting usage measurement and analysis to the firm. That gives readily understandable feedback on progress. Just as important is the qualitative feedback you can only get from talking to users and gathering their thoughts and insights first-hand. Make it easy for the firm by creating questionnaires and interview scripts for them to tailor for users.

 

If that process is successful and a firm creates a relationship with the startup at an early stage, what are the benefits? Other than the product itself.

[JC] When we make decisions about which LawTech startups to work with, it is not just about the tech. We also look at it as an investment in the people behind the business; it is a long-term relationship we are building.

If we can engage early enough with a startup then we can coach, influence, and be part of the product-development journey. That is rewarding for us because education and learning go both ways.


 

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