The LegalTech Book E-Book

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 589

Veröffentlichungsjahr: 2020

Beschreibung

Written by prominent thought leaders in the global fintech and legal space, The LegalTech Book aggregates diverse expertise into a single, informative volume. Key industry developments are explained in detail, and critical insights from cutting-edge practitioners offer first-hand information and lessons learned. Coverage includes: · The current status of LegalTech, why now is the time for it to boom, the drivers behind it, and how it relates to FinTech, RegTech, InsurTech, WealthTech and PayTech · Applications of AI, machine learning and deep learning in the practice of law; e-discovery and due diligence; AI as a legal predictor · LegalTech making the law accessible to all; online courts, online dispute resolution · The Uberization of the law; hiring and firing through apps · Lawbots; social media meets legal advice · To what extent does LegalTech make lawyers redundant or more efficient? · Cryptocurrencies, distributed ledger technology and the law · The Internet of Things, data privacy, automated contracts · Cybersecurity and data · Technology vs. the law; driverless cars and liability, legal rights of robots, ownership rights over works created by technology · Legislators as innovators · Practical LegalTech solutions helping Legal departments in corporations and legal firms alike to get better legal work done at lower cost

Leseprobe

“The legal profession has always been conservative and rightly so. However, the transformation of industry after industry by the digital revolution means that in order to stay relevant to it’s clients, the legal profession must also embrace the technology enablers that exist in both the business and practice of law. The LegalTech Book, crowdsourced from leading industry experts and thought leaders, provides important insights into the use of technology in the law, as well as the debates surrounding its use. It is an invaluable resource to help understand the LegalTech ecosystem.”

Steve Schiff, Independent Disruptive Technology Consultant and Former CEO of ReMATCH LTD

“AI is already changing both the practice of law, the courts and the legal system through which we govern ourselves as a society. Automation is changing the nature of legal jobs, while AI increasingly allows us to identify patterns in human conduct – from financial decisions to risky behaviours governed by criminal or private law – in ways that both hold great promise, but also pose grave risks to the legitimacy and transparency of our legal institutions. Whether you are a legal practitioner, entrepreneur, executive, investor or academic, The LegalTech Book is an essential resource for anyone seeking to better understand how AI is changing legal practice, adjudication and the rule of law itself. Highly recommended reading for experts and non-experts alike.”

Professor Alexander Sarch, Head of School, University of Surrey School of Law

“Truly excellent legal technology depends on deep understanding and collaboration between many different disciplines. However, the mother tongue of lawyers, developers, data scientists, knowledge managers and ontologists, to name a few, differ from each other. The LegalTech Book brings together a vast array of contributors, each on the cutting edge of their respective LegalTech projects. It will undoubtedly foster the necessary understanding, as well as keys to being understood, to the end of excellent multi-disciplinary LegalTech collaboration. It is a must read no matter what your discipline.”

Garth Watson, Co-Founder and CLO, Libryo

“The largest and most impactful tech change to the world as we know it – I am free to say will be LegalTech. The ways the laws, regulations are brought to light, implemented and enforced will change the legal industry and our lives beyond what we know. This brilliant book and amazing minds of authors and editors behind this book bring the full light to us in a very powerful way.”

Milos Kresojevic, Founder, AI.Legal Labs

“While automation has played a role in the legal profession for some time, the legal industry is reaching a tipping point – not only are intelligent systems on the verge of taking over, but clients also ask for them.

This book provides an excellent insight into the new role that LegalTech plays in the workplace. Intelligent applications based on artificial intelligence, smart contracts, and advanced document management, are the next wave of technology transforming how lawyers, law firms and legal technology consulting firms work and learn.”

Djuro Stojanovic, Founder and CEO, Uhura Solutions

“Bringing together insights in an easily understood framework, this well-written and lucid book looks at LegalTech from a wide range of perspectives. The use of AI, smart contracts, RegTech, contract management, and digital due diligence are some of the areas of LegalTech which promise to reshape the legal profession for good. This excellent and timely book will be useful to experts in the field and of interest to general readers and policy-makers thinking ahead of time.”

Ana Odorović, Lecturer at the University of Belgrade, Faculty of Law, Research Affiliate at the Cambridge Centre for Alternative Finance, Judge Business School

“Technology is redefining whole industries and the legal sector is not immune. Technological innovation and adoption will be the major defining drivers as to which firms prosper and those which struggle to survive over the next decade. Clients are looking for technological solutions and technology enabled efficiencies and expecting firms to spend in order to deliver this. Those that do not will find themselves priced out of the market. The LegalTech Book will enable law firms to consider some of the innovations that are underway and develop a strategy to best position themselves for the changes that are about to come.”

Martin Bartlam, Partner, Head of Finance, Projects & Restructuring, DLA PIPER

“Legal tech is a growing movement globally. We are fortunate to have a world leading legal tech hub in the UK which complements the strengths of its internationally renowned legal sector. As an active supporter, the Corporation sees the potential for legal tech to be a game changer right across the economy. The role of technology in supporting and transforming the delivery of legal services has been accelerated as a result of the global lockdown in response to the COVID-19 outbreak. This includes a significant increase across all parts of the legal sector in the use of existing and emerging technology. The need is greater than ever for lawyers and clients to develop their understanding of the potential benefits of legal tech and increasing awareness and understanding.”

Catherine McGuiness, Chair of the Policy & Resources Committee, City of London Corporation

This edition first published 2020 © 2020 FINTECH Circle Ltd

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Library of Congress Cataloging-in-Publication Data

Names: Chishti, Susanne, editor. Title: The legaltech book : the legal technology handbook for investors, entrepreneurs and FinTech visionaries / edited by Susanne Chishti,    Sophia Adams Bhatti, Akber Datoo, Dr. Drago Indjic. Description: Chichester, West Sussex, United Kingdom : John Wiley & Sons, 2020. | Includes bibliographical references and index. Identifiers: LCCN 2020008305 (print) | LCCN 2020008306 (ebook) | ISBN 9781119574279 (paperback) | ISBN 9781119574286 (adobe pdf) | ISBN 9781119574354 (epub) Subjects: LCSH: Practice of law—Automation. | Law—Data processing. | Information technology. | Technology and law. Classification: LCC K87 .L459 2020 (print) | LCC K87 (ebook) | DDC 340.0285—dc2 3 LC record available at https://lccn.loc.gov/2020008305LC ebook record available at https://lccn.loc.gov/2020008306

A catalogue record for this book is available from the British Library.

ISBN 978-1-119-57427-9 (paperback)      ISBN 978-1-119-80497-0 (ePDF) ISBN 978-1-119-80498-7 (ePub)                 ISBN 978-1-119-70806-3 (obook)

Cover design: Wiley

Cover image: pkproject/Shutterstock

The LegalTech Book

The Legal Technology Handbook for Investors, Entrepreneurs and FinTech Visionaries

Edited by

Sophia Adams Bhatti

Susanne Chishti

Akber Datoo

Dr Drago Indjic

CONTENTS

Cover

Preface

About the Editors

Sophia Adams Bhatti

Susanne Chishti (Editor in Chief)

Akber Datoo

Dr Drago Indjic

Acknowledgements

1

An Introduction to LegalTech: The Law Boosted by AI and Technology

Executive Summary

We Are Voyagers

The Journey so Far

Speed of Travel

Direction of Travel

Scanning the Horizon

Where Are We Headed?

Notes

Mapping and Classifying LegalTechs

Why Is Classification Necessary?

A Mapping Frenzy

Approaching the Classification Effort

Gazing Into the FinTech Abyss

Links

Note

Educating for Disruption, Innovation and Legal Technology

Introduction

The Nature of Disruption and Innovation in Legal Services to Date and the Increasing Role of Technology

Where Do We Go From Here?

Conclusion

Note

An Introduction to Mapping and Classifying LegalTech

In-House Counsel Can Drive Industry Change Through Legal Technology

Introduction and My Journey to LegalTech

Adoption of Legal Technology – In-House vs Law Firms

Why Do Many In-House Teams Lag Behind?

The Business Case for LegalTech

Change on the Horizon!

Notes

The Role of LegalTech in Financial Services: A Case Study

Background

Legal Document Automation in Financial Services

Case Study

A Problem of Scale

Risk Mitigation

What the Future Holds

Notes

How Artificial Intelligence Is Transforming the Legal Profession

The Changing Face of the Legal Profession

Drivers of Technological Advancement in the Legal Industry

How Is AI Revolutionizing the Legal Field?

How Should Legal Departments Be Prepared for the AI Revolution?

What are the Implications of AI in the Legal Industry?

Conclusion

Notes

Can the Law Keep Up with the Growth of AI?

Big Data, Text and Data Mining – Can the Law Keep Up?

AI vs Privacy Laws

TDM vs Copyright Laws

A Global Concern

Alternative Solutions: Innovation-Friendly Laws

Technological Solutions

Notes

Fairness, Accountability and Transparency – Trust in AI and Machine Learning

Privacy – A Trade-off for Access

Surveillance Capitalism and Threats to Democracy

State Surveillance and Enforcement

Bias/Unfairness

Transparency

Accountability

What Next?

Notes

The Chiron Imperative – A Framework of Six Human-in-the-Loop Paradigms to Create Wise and Just AI-Human Centaurs

Human as AI Trainer

Human as AI User-Trainer

Human as AI Quality Control and Governance

Human as AI Explainer or Interpreter

Human as AI Creator

Human as Customer-User of AI Products and Services

Embodying Chiron as the Ideal AI Centaur

Notes

Lawyers' Ethical Responsibility to Leverage AI in the Practice of Law

AI's Black Box

Duties of Competence … and Supervision

Global AI Ethics

AI and Ethics: Hand in Hand

Notes

Dispute Resolution 2.0: The Era of BIG Data, AI and Analytics

Digitizing the Dispute Resolution Process

AI in Dispute Resolution

At the Transactional Stage

At the Time of Breach or Failed Performance

Document Review

Legal Research

Bundling and Administrative Tasks

Trials

Why All LegalTech Roads “Point” to a Platform Strategy

How Did We Get Here?

Digital Operations, Data and Platforms

The Promise of Artificial Intelligence

How Can We Keep Up?

Note

An Introduction to the Internet of Things

What Is the IoT?

What Is an IoT Device?

Security of the IoT

Blockchain

The IoT and the Law

Conclusion

Notes

2

Law and Data

Executive Summary

Technology and the Law – Data and the Law

The Paces of Change

Governance Beyond the Law

Technology or Application?

The Languages of Law, of Science and of Society

Data for the Wider Good

References

Notes

I Make the Rules, Why Should I Care About LegalTech?

So, Where Do You Start in Order to Have the Best Shot at a Successful Digital Transformation?

Legacy CMS

Investment in Technology or Outsourcing?

Bespoke or Off-the-Shelf?

Content Delivery Methods to Consider

Resourcing

Data Resilience and Security

Maintenance and Accessibility

Capturing Useful Data

Well-Defined and Structured Data Model

Content Augmented with Metadata

Taxonomy

Data Migration and Testing

To Conclude

From Legal Documents to Legal Data

Introduction

Legal Documents

Legal Data

Open Access

Natural Language Processing

Case Studies

Conclusion

Acquisitive Information Extraction Framework for Legal Domain

Introduction

Acquisitive Information Extraction Framework

Case Study: Named-Entity Recognition for Legal Documents

Results and Discussion

Acknowledgements

Notes

Legal Expert Systems

Relevancy of Questions

Explanations

Tech vs Law: Consent

The Issue

“Specific and Informed” Consent

“Freely Given”

An Alternative Approach

The Way Forward

New Privacy Laws Require Changed Operations on Commercial Websites

The Changing Landscape of Internet Data Privacy

Jurisprudence of Internet Data Privacy Regulation

The California Consumer Privacy Act of 2018

European Union's General Data Protection Regulation

Comparison of Two Seminal Laws

Notes

Dealing with Tensions Between the Blockchain and the GDPR

Introduction

Problems of Identifying Data Controllers and Processors on the Blockchain

The Right to Erasure on the Blockchain

Liability of Joint Controllers on the Blockchain

The Scope of the DPIA on the Blockchain Network

Data Transfers

Smart Contracts and Automated Decision-Making

Conclusion

Notes

Rise of the Legalbots: How In-House Teams and Business Lines Benefit

What Has Changed

The Legalbot – What Is It and What Can It Do for You?

Conclusion: Legalbots – An Opportunity or a Threat?

Note

AI Is Changing Boardroom Dynamics

Notes

Cloud Computing Contracts

Note

3

Technology vs Law

Executive Summary

LegalTech in Our Daily Lives

Conclusion

The Evolution of the Legal Marketplace

The Evolution of the Legal Marketplace

Stage One: The Marketplace

Stage Two: The Managed Platform

Stage Three: Full Verticalization

The Marketplace Evolution

Note

Technology and In-House Counsel

The Role of the In-House Lawyer

Legal Technology as Point Solution

A Blank Sheet of Paper

Walking Forwards

Notes

Smart Home or Spy Home?

“Smart” Lifestyle:

Smart Challenges

Basic Defence Measures

Notes

Cybersecurity: Myths and the Hero's Journey

Introduction

Problem, What Problem?

Could Your Firm Survive Such an Event?

A Call to Action

Create Your Cybersecurity Strategy

Cybersecurity Myths and the Trials: Threats from Within and Without

Help From Unexpected Sources

Conclusion

Notes

Legal Talent Platform Economy – The Beginning of the End?

Can Intelligence Be Appropriated: Ownership Over AI

What Is AI?

From Inventor to Owner – The AI Dilemma

More Questions Than Answers

Notes

The Electronic Creation Right (ECR)

Artificial Originality and Creativity

Moral Rights and the Rationale for the ECR

Notes

4

Cryptocurrencies, Distributed Ledger Technology and the Law

Executive Summary

Distributed Ledger Technology and the Legal Profession

Distributed Ledger Technology: Factors for Adoption and Use Cases

Impact of Distributed Ledger Technology on Legal Services

Conclusion

Notes

Cryptoasset Regulation: Clarification and Guidance

Notes

The Legal Implications of Digital Security Offerings

FINMA Leads but SEC Rules

The US Supreme Court and Considerations of the “Howey Test”

The Life cycle of a Security Token

Global Regulation

Cryptoassets and Market Abuse

Definition and Classification of Cryptoassets

Cryptoassets as Financial Instruments

Market Abuse

Conclusions

Cryptosecurities: Traditional Financial Instruments on a Distributed Ledger

Distributed Ledger Technology and Share Registers

Cryptosecurities

Classification Matrix

Examples

Category C3 Cryptosecurities

Conclusion

Notes

The Use of Digital Tokens for the Boost of Supply Chain Finance

Introduction

The Use of Digital Tokens in SCF

An Example of How Digital Tokens Can Be Used in the Context of SCF

Conclusion: Tokenization as a Boost for the Supply Chain Finance Sector

5

Smart Contracts and Applications

Executive Summary

LegalTech's Impact on the Role and Job of a Lawyer

Notes

Smart(er) Contracts – Digitizing Contracts for a New Age

Introduction

Costly Contracting and the Need for a Digital Contract Standard

Imagine a World of Smart Contracting

Building Smart(er) Contracts

Conclusion

Notes

Smart Contract and Traditional Contract

Traditional Contracts Compared to Smart Contracts

The Interface with Blockchain

Getting Smart: Blockchain and Smart Contracts

Origins of Blockchain Smart Contracts and How Blockchain Smart Contracts Work

Potential Use Cases

Technical Limitations or Barriers and Regulatory Issues

Conclusion

Notes

Legal Prose to Code: Restructuring Contract Templates for Blockchain Automation

References

Notes

The Legal Framework of Pay-Per-Use Financing

What Is Pay-Per-Use Financing?

To Buy, to Lease or to Pay-Per-Use?

Pay-Per-Use Business Models

Bank Pay-Per-Use-Finances Asset

Customer Buys Service Level Agreement

What Are the Prerequisites for Pay-Per-Use?

Data Logistics

Design “Use” of the Asset

Risk Management

Supply Chain Settlement

Data Governance

6

Legal Technology: Increasing or Impeding Access to Justice?

Executive Summary

Legal Technology: Increasing or Impeding Access to Justice?

Introduction

The Crucial Role of LegalTech in Access to Justice

The Law Society of England and Wales

Notes

Digitizing Disputes

Introduction

Court Use of Technology

Summary of Disputes Focused Software

AI in Disputes

Predictions for LitTech in the Next Decade

Humanize with LawTech Lawyering

Introduction

Access to Justice: Clients

Access to the Justice System: Professionals

Conclusion

Notes

From Fair Hearing to

FairTech Hearing:

Improving Access to Justice in the UK Asylum and Immigration Process

Creating a Database of Key Terminologies

An Example Differentiating Sunni and Shi'a Muslims

Algorithms to Analyse the Threat of Persecution

Notes

The Dark Side of Technology in Law: Avoiding the Pitfalls

New Solutions, Old Risks…in New Forms

“I'm Sorry, Dave…I Can't Do That”: AI Complications

6

Silver Lining, of Sorts

Notes

Closing the Justice Gap – Technology is

Not

the First Step

Accessing Justice Through a Supported Court Process

Support Services – a Confusing Landscape

Step 1: Strategy Before Technology

Step 2: Technology to Support Lips

Summary

Finally…

Combining AI and Digitization of Judgments for Access to Justice

Notes

7

LegalTech Around the World

Executive Summary

Legal Implications of Artificial Intelligence in China

Background

Legal Implementations

Conclusion

Mapping LegalTech Adoption and Skill Demand

1

Introduction

Approach

LegalTech Markets Are in Their Infancy

Differential Demand for Machine Learning

Non-Lawyer Technologists versus Lawyer-Coders

The Future Impact of LegalTech Adoption

Notes

A Case Study of Adoption of Legal Technology in a Non-Western Market

Introduction – A Legal Revolution

The Western Legal Services Market Today

A Case Study of a Non-Western Market

Findings from the Research

Outcomes and Recommendations

Why Now Is the Time for LegalTech to Boom

Notes

8

The Future of LegalTech

Executive Summary

LegalTech's Legacy?

Backlash

Time for a Reality Check

The Path Forward

Back to the Future: How LegalTech Is Changing the Law Firm

Technological Revolution: More Law, More Lawyers

The New Wave: More Law, Fewer Lawyers

The Rise of the Boutiques

Law Firms as Legal Ecosystems

Notes

How Much Disruption Can We Handle?

The Current Situation

The Cognitive Advantage

The Future Is Always Bright – How Do We Get There?

Notes

The Role of RegTech in Delivering Better Regulatory Compliance

References and Further Reading

Notes

Creating Supervised Independence for FinTech Companies via Regulatory Sandboxes

Notes

Patterns of Speech: A Future of AI-Authored Legal Reasoning and Arguments?

AI is Already Involved in Content Creation and Editing

An AI That Debates

Implications for Lawyers

Notes

From Innovation Frenzy to Productivity Steadiness

Where Are We Heading with Technology?

Changing Product Philosophy

New Solutions for New Professionals

What Will the Future Look Like?

The Humans Strike Back: The Fall of the Robots in LegalTech's Future

Human Beings First

Lawyers Are Still People

The Fall of the Robots

List of Contributors

Index

End User License Agreement

List of Tables

Preface

Table 1:

Table 2:

Table 3:

Table 4:

Acquisitive Information Extraction Framework for Legal Domain

Table 1:

List of Illustrations

We Are Voyagers

Figure 1: Change increasing in frequency

Figure 2: Change increasing in both frequency and amplitude

Mapping and Classifying LegalTechs

Figure 1: A classification example by Ethel

Acquisitive Information Extraction Framework for Legal Domain

Figure 1: Multipurpose document representation-based information extraction framework

Figure 2: Different types of case law templates

Distributed Ledger Technology and the Legal Profession

Figure 1: DLT areas of focus and use cases

Smart(er) Contracts – Digitizing Contracts for a New Age

Figure 1: Lexible screenshot

Figure 2: Future contract builder

Legal Prose to Code: Restructuring Contract Templates for Blockchain Automation

Figure 1: Connecting Legal Prose to Smart Contracts

Figure 2:

Mapping LegalTech Adoption and Skill Demand

Figure 1: Percentage of legal services sector and law firm job adverts containing key Le...

Figure 2: Percentage of legal services sector and law firm job adverts containing key te...

Figure 3: Share of lawyers and solicitor job adverts containing key terms for skills and...

A Case Study of Adoption of Legal Technology in a Non-Western Market

Figure 1: Key themes for the future of legal services

Figure 2: Recommendations for the Japanese legal services market

The Role of RegTech in Delivering Better Regulatory Compliance

Figure 1: RegTech's main features 

Figure 2: Tech and compliance regulation growth 

Guide

Cover

Table of Contents

Preface

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Preface

Global investment in legal technology (also referred to as “LegalTech” or “LawTech”) is about $1 billion and likely to increase. The industry is backed by angel and seed-stage investors and venture capital funds globally. LegalTech benefits established law and financial services firms who seek to leverage legal technology innovations to provide better services to their clients, reduce costs and increase efficiency. In fact, LegalTech will benefit any corporation which employs in-house lawyers. In addition, legal technology has the opportunity to positively impact our wider society at large.

This book covers a wide range of applications of LegalTech, including collaboration tools, document management, intellectual property management, e-Billing, e-Discovery, legal research and analytics, legal project management, governance and compliance and contract management, including contract review and due diligence. In terms of technologies and their use cases we will cover LegalTech adoption using artificial intelligence, machine learning, blockchain and distributed ledger technologies, robotic process automation and chatbots, among many more.

The LegalTech Book is the first crowdsourced book globally showing how much technology can achieve in the legal and financial services sector – a book that provides food for thought to newbies, pioneers and well-seasoned experts alike. The reason we decided to reach out to the global LegalTech and financial technology (FinTech) community in sourcing the book's contributors lies in the inherently fragmented nature of the field of LegalTech. There was no single author, group of authors or indeed region in the world that could cover all the facets and nuances of legal technology and its potential in an exhaustive manner. What is more, by being able to reach out to a truly global contributors' base, we not only stayed true to the spirit of technology startups and the LegalTech community, making use of technological channels of communication in reaching out to, selecting and reviewing our would-be contributors, we also made sure that every corner of the globe had the chance to have its say. Thus, we aimed to fulfil one of the most important purposes of The LegalTech Book, namely – to give a voice to those who would remain unheard, those who did not belong to a true legal and technology community in their local areas, and spread that voice to an international audience. We have immensely enjoyed the journey of editing The LegalTech Book and sincerely hope that you will enjoy reading it.

More than 110 contributors submitted 140 abstracts to be part of the book. We asked our global FinTech and LegalTech communities for their views regarding which abstracts they would like to have fully expanded for The LegalTech Book. Out of all contributors, we selected sixty-four who were asked to write their full articles, which have now been included in this book. We conducted a questionnaire among all our selected authors to further understand their background and expertise. In summary, our selected authors come from twenty countries. More than 70% of our authors have postgraduate university degrees (78%) and have strong domain expertise across many fields (see Tables 1 and 2), and 81% of our finalist authors had their articles published before.

Table 1:What is the highest educational qualification of our finalist authors?

Table 2:A list of all areas our authors have domain expertise in, multiple choices were possible

Tables 3 and 4 show that more than 36% of our finalist authors are entrepreneurs working for startups and scaleups (many of them part of the founding team), 31% work in law firms, 6% come from established financial and technology companies and more than a quarter come from service providers such as consulting firms servicing the financial services sectors.

Table 3:Authors selected by the type of company they are working in

Table 4:Size of companies our authors work for

Almost 42% of our authors work for startups with up to ten people and another 25% for startups/small medium-sized enterprises with up to 100 people. Thirty-three per cent of our authors are employed by a large organization of more than 100 employees.

We are very proud of our highly qualified authors, their strong expertise and passion for legal technology. They are either entrepreneurs or often “intrapreneurs” in law firms and large established organizations who all are committed to play a significant role in the global LegalTech revolution. These remarkable people are willing to share their insights with all of us over the next pages.

This book would not have been possible without the dedication and efforts of all contributors (both those who submitted their initial abstracts for consideration by the global legal technology and FinTech community, as well as the final authors whose insights you will be reading shortly). In addition, we would like to thank our editors at Wiley whose guidance and help made sure that what started off as an idea, you are now holding in your hands.

Finally, I would like to thank my fantastic co-editors Sophia Adams Bhatti, public policy and regulation expert, former director at the UK's Law Society and Head of Strategy and Policy at Simmons Wavelength Limited; Akber Datoo, founding partner of D2 Legal Technology LLP with a background as both a technologist and derivatives lawyer; and Dr Drago Indjic, co-founder of several startups and director of an alternative investment fund and the Oxquant consulting firm in Oxford. Editing a crowdsourced book naturally takes several months and Sophia, Akber and Drago were always a pleasure to work with inspired by their strong domain expertise and vision for the future!

Susanne Chishti

Bestselling Co-Editor, The FinTech Book Series

CEO FINTECH Circle and FINTECH Circle Institute

About the Editors

Sophia Adams Bhatti

Sophia is a Public Policy Expert with 20 years' experience across a range of sectors. Currently, she is the Head of Strategy and Policy at Simmons Wavelength where she is leading work at the intersection of technology, law and policy. She is driven by a passion of what law reimagined can deliver for clients and wider societal outcomes.

Previously, she was the Director of Policy at the Law Society of England and Wales where she was credited with supercharging its role in legal technology and most notably was the creator of the groundbreaking Commission on the Use of AI in Criminal Justice. Prior to that she has held senior roles at the FCA, CMA, OFT and GMC, and has worked in both domestic government agencies and international organizations, including the UN.

Susanne Chishti (Editor in Chief)

Susanne Chishti is the CEO of FINTECH Circle, Europe's first angel network focused on FinTech investments and founder of the FINTECH Circle Institute, the leading FinTech learning and innovation platform offering corporate innovation workshops to C-level executives and FinTech courses. She is also the bestselling co-editor of The FinTech Book, The WealthTech Book, The InsurTech Book and The PayTech Book (all published by Wiley).

Awards:

Fintech Champion of the Year 2019 (Women in Finance Awards)

Social Media Influencer of the Year 2018 (

Investment Week

)

Top 7 Crypto Experts globally 2018 (

Inc. Magazine

)

City Innovator – Inspirational Woman in 2016

European Digital Financial Services “Power 50”, an independent ranking of the most influential people in digital financial services in Europe (2015)

When completing her MBA she started her career working for a FinTech company (before the term was being invented) in Silicon Valley 25 years ago. She then worked more than 15 years across Deutsche Bank, Lloyds Banking Group, Morgan Stanley and Accenture in London and Hong Kong. Susanne is an award-winning entrepreneur and investor with strong FinTech expertise. She is a judge and coach at global FinTech events and competitions and a conference keynote speaker. Susanne leads a global community of more than 130,000 FinTech entrepreneurs, investors and financial services professionals (www.fintechcircle.com).

Akber Datoo

Akber Datoo is the Founder and CEO of D2 Legal Technology (D2LT), an award-winning global legal consulting firm advising clients on the use of technology and data to unlock business value through legal change. D2LT operates at the exciting intersection of FinTech and LegalTech.

After graduating with a first-class honours in computer science from Cambridge University, Akber began his career as a technologist at the investment bank UBS. Through this, he saw an opportunity for digital transformation across the legal profession and decided to retrain and qualify as a lawyer, working at magic circle law firm Allen & Overy. Akber founded D2LT in 2011 where he has overseen its growth across Europe, the US and Asia. He was appointed to the Law Society's Technology and Law Committee in 2016 and is the author of the Wiley textbook Legal Data – Banking & Finance, published in May 2019. Akber was highlighted as a “Market Shaper” in the Financial Times Intelligent Awards 2019, with D2LT winning an award for its legal agreement data strategy work with ISDA, the OTC derivatives trade association.

Dr Drago Indjic

Drago is Managing Director at Oxquant, a firm involved in consulting, research and training in AI and machine learning for many knowledge-based and data science industries. He is also a co-founder and an advisor to several technology (Soft-Finance, Technology Partnership) and financial (Richfox Capital, ETFmatic) businesses across Europe, and lectures part-time on FinTech and investment management at Queen Mary University of London, Regent's University, London, and London Business School.

Drago has been a EU expert since 1997. He has also worked as an investment portfolio manager and in research at several hedge funds, including his own hedge fund venture, a family office and at a sovereign wealth fund. Drago holds two engineering degrees, a Dipl Ing from the University of Belgrade and a PhD from Imperial College, London. He is also known as @dindjic on Twitter and other professional and academic networks ranging from ResearchGate to F6S. He is a member of the IEEE, the IET and a holder of various FCA CF authorizations over 20 years.

Acknowledgements

After the global book launch events of The FinTech Book, The WealthTech Book and The InsurTech Book, we met many legal and financial technology entrepreneurs, investors, law firms and financial services and technology professionals who all loved the books and wanted to learn more about how legal technology will impact the corporate sector and our world overall.

We came up with the idea for The LegalTech Book and spoke to our legal and technology friends globally. Entrepreneurs across all continents were eager to share their powerful insights. They wanted to explain the new business models empowered by LegalTech and the technologies they were working on to improve the world of law. Investors, “intrapreneurs”, innovation leaders at leading financial and technology institutions and thought leaders were keen to describe their embrace of the data and LegalTech revolution. Legal technologies will become part of our lives and also provide access to justice for millions of people.

The global effort of crowdsourcing such insights was born with The FinTech Book, which became a global bestseller across 107 countries in ten languages. We continued this success with The WealthTech Book, The InsurTech Book, The PayTech Book and The AI Book, which were published in 2020. We hope we can satisfy the appetite for knowledge and insights about the future of legal innovation with this book.

We are aware that this book would not have been possible without the global FINTECH Circle community and our own personal networks in the legal industry. We are very grateful to more than 130,000 members of FINTECH Circle for joining us daily across our website www.FINTECHCircle.com and our Twitter accounts and LinkedIn groups. Without public support and the engagement of our global LegalTech and FinTech communities, this book would not have been possible.

The authors you will read about have been chosen by our global ecosystem purely on merit, thus no matter how big or small their organization, no matter in which country they work, no matter if they were well known or still undiscovered, everybody had the same chance to apply and be part of The LegalTech Book. We are proud of this because we believe that legal technologies will drive the corporate world and will ultimately make our society a fairer place. The global legal, finance and technology community is made up of the smartest, most innovative and nicest people we know. Thank you for being part of our journey. It is difficult to name you all here, but you are all listed in the directory at the end of this book.

Our publisher Wiley has been a great partner for The FinTech Book Series and we are delighted that Wiley will again publish The LegalTech Book in paperback and e-book formats globally. A special thanks go to our fantastic editor Gemma Valler. Thank you and your team – we could not have done it without your amazing support!

We look forward to hearing from you. Please visit our website https://fintechcircle.com/LegalTech-book/ for additional bonus content from our global community! Please send us your comments on The LegalTech Book and let us know how you wish to be engaged by dropping us a line at [email protected].

Sophia Adams Bhatti

Twitter: @adams_bhatti

Akber Datoo

Twitter: @akber_datoo

Susanne Chishti

Twitter: @SusanneChishti

Dr Drago Indjic

Twitter: @dindjic

1An Introduction to LegalTech: The Law Boosted by AI and Technology

Executive Summary

LegalTech has seen a huge boom over the last few years, and although still short of revolutionizing the legal services market, there is much to play for. In this part our authors explore the journey of LegalTech, alongside the role that artificial intelligence (AI) is playing now and might play in the future.

The part begins with an overview of how the market came to be where it is, and goes on to explore the classification of technologies, the role of education and skills, the perspective of the in-house counsel and how in one sector, LegalTech, plays a part. The role of AI in the law is explored from both the regulatory and legislative perspective as well as how tools deploying AI and machine learning are beginning to change the delivery of legal services.

In “We Are Voyagers”, Liam Brown charts a short history of legal technology, examining the waves of advancements and the speed of change. Alongside this he also sets out some of the key drivers such as digitalization and economic efficiencies as well as a looks over the horizon as to what we might expect next.

Ever felt a sense of confusion when talking about LegalTech – what is the difference between all these tools? In his chapter, “An Introduction to Mapping and Classifying LegalTech”, Alessandro Galtieri seeks to help demystify this by providing a helpful no-nonsense explanation of key terms and areas of development. Before this, Daan Vansimpsen provides a useful outline of how to handle the plethora of LegalTech solutions on the market.

Struan Britland and Elly May in their paper “Educating for Disruption, Innovation and Legal Technology” consider the nature of disruption and what sorts of things those involved in training the talent of the future need to be thinking about now.

Paul Massey examines the pivotal role of the in-house legal team, looking at both the role of the in-house team in the ecosystem as a whole alongside how LegalTech is being adopted by the in-house community.

In a case study, Brie Lam looks at the interesting convergence of LegalTech and financial services – necessity may well have been the mother of invention the author argues, and looks at interesting lessons for the wider deployment of LegalTech.

Laura Stoskute in her chapter examines the impact on the legal profession of AI and how legal teams should start to prepare for the future.

Charlotte Gerrish and Lily Morrison examine in their chapter the question of whether the law can keep up with the growth of AI, using copyright as an illustration of the difficulties to be overcome.

In “Fairness, Accountability and Transparency – Trust in AI and Machine Learning”, Cemil Cakir examines the impact of AI on fundamental rights. This chapter is followed by Brian Tang and his analysis of the importance of “human in the loop”. Turning from societal debates to the role of the individual, Laura van Wyngaarden addresses the debate of the ethical responsibilities of lawyers and the deployment of AI.

Paula Hodges and Charlie Morgan move the debate to the practical realm of the application of big data, focusing on the changing nature of dispute resolution.

Ben Stoneham looks towards the future in his chapter on why all LegalTech roads point to a platform strategy. There are hundreds of point-to-point solutions out there, but how do we move from this to a more consolidated and coordinated set of options?

And finally, Simon George provides a small glimpse into the world of the Internet of Things (IoT), and argues that despite all the drawbacks and concerns, businesses and consumers alike will continue to fuel the demand for IoT devices.

We Are Voyagers

Liam Brown

Chairman and CEO, Elevate

You are headed somewhere. That somewhere is your future. To navigate there successfully, you need to know where you started, decide where you want to go, be realistic about the resources at your disposal and understand the forces acting on you along the way.

I hope you get there. And I believe LegalTech can help you, but it won't if you don't choose wisely – or you don't choose at all.

I care a great deal about LegalTech. I'm the founder and leader of a law company that builds legal software and provides legal services augmented by technology. My company's strategy depends upon LegalTech, and I constantly scan the horizon for trends, insights and ideas that will be useful to our customers.

On the fear of missing out sea of LegalTech, today's shiny new object may end up on tomorrow's scrapheap of “brilliant ideas that were ahead of their time”. But sometimes new legal software becomes a business tool that we use every day, and which we come to take for granted.

I recommend we each develop our own framework for evaluating LegalTech so that we can plan our route and course-correct as our journey unfolds. I'd like to share my own perspective, as someone with a vested interest in this topic.

The Journey so Far

As Bill Gates said, “In the next ten years, business will change more than it did in the previous fifty.” Technology has brought massive change to almost every industry, and the pace of change is increasing.

Consider the last fifty years of LegalTech history:

50 years ago

All legal documents were paper, all phones had cords, the internet didn't exist, the majority of lawyers couldn't type and books were the only way to search case law.

45 years ago

A very small percentage of lawyers were able to search case law electronically, using the Lexis UBIQ terminal (introduced in 1973).

40 years ago

Law firms began using fax machines, and IBM was about to introduce the first “personal computer” (in 1981).

35 years ago

A few lawyers were just starting to create documents using personal computers, mostly on systems where file sharing required physically moving floppy disks from computer to computer.

30 years ago

Networked databases were enabling law firms to index complex litigation matters that previously would have been nearly impossible to handle manually.

26 years ago

The first law firm website was launched.

24 years ago

The Law Society of England and Wales denounced Richard Susskind's prediction that email would become the primary mode of communication between lawyers and clients.

20 years ago

LegalZoom was launched online (2001), and the first Blackberry device was launched.

15 years ago

The first version of the Electronic Discovery Reference Model was published. The beta version of Google Scholar was released a year later (2004), making hundreds of millions of cases, filings and research articles searchable and free.

13 years ago

The first iPhone was released, followed by the first iPad three years later. Lawyers began using smartphones and tablets for work.

10 years ago

Technology-assisted review (TAR) was first used. US Magistrate Judge Peck issued his first opinion endorsing TAR two years later.

7 years ago

Blockchain-based “smart contracts” began to appear.

6 years ago

Information processing volume in the cloud surpassed the on-premise volume in traditional IT environments in companies and firms.

3 years ago

Investment in legal technology was $233 million; the following year (2018), it catapulted to $1.7 billion.

2 years ago

95% of all lawyers were using smartphones for work.

1

1 year ago

The Global Legal Blockchain Consortium grew to 250 members, including large companies, law firms, software companies and universities, all collaborating to develop standards that will govern the use of blockchain technology in the business of law.

and

The first LegalTech “app store” launched with backing from 18 of the largest law firms in the US and UK.

Reflecting on this, I find myself surprised and inspired by how much the legal world has changed technologically within my own lifetime. Being an entrepreneur, I see this as an incredible opportunity. As evidenced by the recent investment boom in the LegalTech market, I'm clearly not alone.2

Speed of Travel

Ray Kurzweil, a leading futurist, illustrates the accelerating rate of technology change with a great deal of supporting data in his essay, “The Law of Accelerating Returns.”3

A simple way to visualize this concept is to picture changes as a series of waves that are increasing in frequency, like Figure 1.

Figure 1: Change increasing in frequency

The more frequently changes occur, the more their effects overlap, amplifying the net impact. Conceptually, this can be visualized as a wave increasing in both frequency and amplitude, as shown in Figure 2.

Figure 2: Change increasing in both frequency and amplitude

Looking at both of these illustrations, it's easy to see what Bill Gates meant in predicting that business will change more in the next ten years than it did in the previous fifty!

Direction of Travel

If we agree that the speed of change is accelerating, it seems prudent to figure out where it's taking us! Rather than predicting specific destinations, let's think about the general direction of travel.

Digital – if not today, tomorrow

Businesses are becoming increasingly digital, from how they interact with customers and suppliers to how they function internally. Digital is replacing paper and manual processes. A 2018 survey by Gartner of over 450 CEOs and senior business executives found that 62% have a management initiative or transformation plan to make their business more digital.4

The law department must keep pace with this tsunami of digitization, which leads to three challenges: (1) selecting, implementing and integrating legal technology to better support the business; (2) getting legal and business professionals to actually use the LegalTech to achieve incredible outcomes; and (3) managing risk in an increasingly digital world that is creating previously unimagined new legal issues involving social media, cryptocurrency, cybersecurity and privacy.

Economic drivers in the business of law (and LegalTech)

Demand for legal services will continue to grow for the foreseeable future, fuelled by many factors. The worldwide regulatory environment is becoming more complex, requiring greater legal awareness, guidance and oversight. Advances in science, from genomics to drones to driverless vehicles, not to mention a more connected, always-on fabric of people and devices, will generate new legal issues that we have yet to imagine.

Despite this growing demand for legal services, legal departments will continue to experience increased pressure to spend less. That dynamic will drive demand for new ways of getting legal work done, including using legal technology as a force multiplier instead of paying more lawyers to work harder.

The most progressive general counsels already run their legal departments with business discipline, increasingly relying on technology. More will follow their lead. They use tech to measure their activity, cost and outcomes in order to predict and manage more effectively. They will continue to do more with less, turning increasingly to legal automation and self-service legal tools to support the rest of the business. Legal operations as a discipline will flourish, driving ongoing improvement in efficiency and quality by reimagining how people, process and technology are used. Legal departments will work more closely with procurement to systematically ensure greater value in exchange for outside legal spend. A few legal departments will shift from being a cost centre to being seen as a strategic asset of the business.

Follow the money

Building technology requires funding and resources, so we must consider access to capital to anticipate where and how LegalTech will develop. As previously mentioned, investment in LegalTech surged in 2018 to over 700% of the prior year and was already at $1.2 billion as of September 2019. Investors have developed keen awareness and become believers in the opportunity for LegalTech.5

These investments took a variety of forms, ranging from substantial late-stage raises by mature LegalTech companies to modest venture investments in startups. In other words, some institutional investors are betting big on established players, while others are betting on the promise of new entrants or “the next big thing”. Investment like this will likely continue, fuelling development and innovation at all stages.

While law firms are restricted in their ability to take outside investment, pure-play LegalTech companies and law companies (like Elevate) have many sources of capital available to secure funding for growth.

Scanning the Horizon

As we voyage, we see new blips appear on the LegalTech radar with growing frequency. Do they represent ships under full sail, or shipwrecks beneath the waves?

Historical analogues

Technology has been developed and adopted more slowly in the legal industry than in most other areas of the business world generally. Many factors contributed to this, ranging from the caution of lawyers as market buyers, to the forces acting on investment capital, such as the (relatively) small size of the legal market. Regardless, since many other sectors have already undergone more dramatic technological change, we can study and learn from them. Asking ourselves “What worked (or didn't) and why?” gives us insight into what's unfolding in the legal sector.

Generational change is upon us

German physicist Max Planck said that science advances one funeral at a time. So too for LegalTech. Users of technology are human, and humans can be finicky, irrational creatures. As Richard Susskind has famously joked, “It's very difficult to tell a roomful of millionaires that their business model is wrong.” The emerging tech-savvy generation of lawyers is emotionally invested in the LegalTech future they believe in, compared to the current generation of lawyers comfortable with the status quo. Even so, if the benefits of a new tool aren't immediately clear to the user or the user interface isn't intuitive, software languishes in disuse.

Natural selection

As legal catches up with the rest of the business world, technology will prove to be a double-edged sword: it is simultaneously a tool to help us do more with less and a catalyst that drives even more change, requiring us to do more. This will create disruption, uncertainty, winners and losers, but that is hardly new. Humans are, after all, toolmakers and tool users. Technology is at the heart of our species; it's simply unfolding at a rate we've never seen before. As always, those who adapt will succeed, while those who don't will be subject to natural selection.

The tools themselves are subject to the forces of selection. Many tools do one thing quite well, but prove to be of limited use to address the next problem we will need to solve in the future (such as the next General Data Protection Regulation, Brexit, London Inter-bank Offered Rate, California Consumer Privacy Act or A606 challenge). Specialization can be a strength in some contexts, but a liability in others. In the long run, flexible, reconfigurable tool sets will be less vulnerable to obsolescence.

Where Are We Headed?

Most of us make decisions about the future based on our experience of the past, which is a flawed method for evaluating disruptive technologies when the pace of change is increasing.

In a TED talk about predicting technology trends, Chris Anderson, then editor of Wired magazine, said he found that almost all technology predictions come true – they just don't happen when they were predicted to happen.6

He explained his methodology for spotting trends, which uses the technology hype cycle, a conceptual model developed by Gartner. He tracks when promising new ideas hit an initially overhyped peak and subsequently bottom out, then he monitors for indicators that they are poised to resurge into widespread adoption.

Anderson says there are four key markers he watches for:

Critical price, making the new tech a viable option for buyers

Critical mass (market penetration), indicating that buyers are voting with their wallets

Displacement, demonstrating that the new technology is taking the place of something else

Commoditization (sometimes becoming nearly free), often near the end of a technology's life cycle

Monitoring the progression of these markers, he explained, is a reliable method for identifying the arrival of game-changing trends.

Obviously, some people are better at predicting the future than others, but I believe we can all develop greater confidence and success by developing a mental framework of indicators that any of us can monitor. And, of course, you can gain an advantage by tapping into other people's ideas – including those of the contributors to this very book. Enjoy!

Notes

1

  ABA Legal Technology Survey Report, 2018.

2

  Valentin Pivovarav, “713% Growth: Legal Tech Set an Investment Record in 2018”,

Forbes

, January 2018. Found online at

https://www.forbes.com/sites/valentinpivovarov/2019/01/15/legaltechinvestment2018/#3bea5adc7c2b

.

3

  Ray Kurzweil, “The Law of Accelerating Returns”, 2001. Found online at

https://www.kurzweilai.net/the-law-of-accelerating-returns

.

4

  Gartner, Inc., “CEO Views on Digital Business: Takeaways for Finance Leaders”, 2018.

5

  Bob Ambrogi, “At $1.2 Billion, 2019 is a Record Year for Legal Tech Investments – and it's only September”, 2019. Found online at

https://www.lawsitesblog.com/2019/09/at-1-1-billion-2019-is-a-record-year-for-legal-tech-investments-and-its-only-september.html

.

6

  Chris Anderson, “Technology's Long Tail” [Video file], February 2004. Retrieved from

https://www.ted.com/talks/chris_anderson_of_wired_on_tech_s_long_tail#t-231365

.

Mapping and Classifying LegalTechs

Daan Vansimpsen

CIO, Ethel

Why Is Classification Necessary?

Having already done quite extensive research into the existing FinTech, InsurTech and LegalTech applications and their providers, it's far from easy to classify them, but it is helpful to have some sense of order in order for both developers and users to understand the tools available and their uses.

Heaps of national LegalTech initiatives and associations have popped up over the past two years, and the internet has seen a number of LegalTech maps, albeit mostly incomplete and rapidly outdated (yet we should all be thankful to the creators for being catalysts!).

A Mapping Frenzy

There have been a few efforts globally which have mapped the LegalTech landscape. The most known probably being the Stanford CodeX index, partly due to the law school's frontrunner position with regards to LegalTech and legal design. If you want to gain a broader understanding and scope out existing initiatives, you might want to have a look at these directories first. Whether you're looking for details on funding, features or an overview per country, this is a great starting point.

Here is a list of others:

Stanford Law Tech Index – the biggest and most known database out there

Dealtech – providing the most elaborate company profiles

LawSites – a classifying attempt by Robert Ambrogi

Ethel LegalTech and design directory – the broadest legal innovation directory out there (mapping facilitators, LegalTechs and modern practitioners)

Legal Geek Startup Map – the quirkiest map you'll find

AngelList – a startup database overview with a focus on founders

Crunchbase – a database with a particular focus on founders, funding and related news

Legalcomplex and Legalpioneer – the most elaborate LegalTech funding research-oriented database by Raymond Blijd

Comparador Legal Tech – directory of LegalTech solutions for legal practitioners and citizens (mostly Spanish providers)

Legital LegalTech Library – a database with an extensive focus on features

Approaching the Classification Effort

This section provides a sort of checklist for setting up your own directory. Whether you want to perform research, benchmark versus competitors or want to build your own knowledge centre on LegalTech, you'll want to think about the following topics before diving in.

Defining the general scope

The first thing you want to know is which type of companies will be included in the list. So, let's first set out a company definition: a LegalTech company is one that applies technology to:

help facilitate the practice of law for lawyers and other legal practitioners, or

help consumers gain access to legal expertise and the judicial system.

And maybe consider excluding incumbent providers and instead focus on startups, in most cases providing a completely different value proposition.

Setting a geographical scope

Next up is defining the global scope. Limiting your scope to arbitrary or natural borders won't do your innovation strategy any good, so let's agree not to do that. Could continents be a good alternative? No, they're not. Technology has no borders. One of the directories mentioned above, however, decided to list solutions available only in Spanish or provided by Spanish companies. Taking this language-based approach probably won't do your innovation strategy any good either. But it makes sense if language is a business requirement you're limited to when selecting the best provider.

The ability to search your database

Probably the most elaborate LegalTech database in the world is the “Stanford CodeX Law Tech Index”, containing over 1200 companies at the moment of writing. To make it easy for everyone to search the list, the number of main categories has been limited to only nine. In addition, you are able to select the target audience and a series of tags.