A Game of Trust and Beliefs
The integration of technology in the roots of the legal industry is a difficult task, especially in a country like India where the practice of law is more traditionally charted in comparison to other countries which follow a more modern approach to practising law by following the key points of technology per se. Provided that the approach may be different but not wrong because not every country shares the same history, resources and legal systems. The Indian legal industry operates to practice law more traditionally wherein the in-person lawyer-client relations, human involvement, and interpersonal beliefs matter a lot. To club it all, the term “trust” plays a vital part and is largely associated with humans/lawyers in this legal industry.
After the wave of the COVID-19 pandemic in India, the adoption of technology to the practice law has gained a lot of attraction as it not only helps in saving the costs to operate a law firm or chamber but is also much more convenient for the legal practitioners as well as the clients. That being said, the after-effects of the COVID-19 pandemic have escalated retrospectively for the traditional practitioners as well as judges. The perspective has changed a bit from those who used to give hard weightage on filing of documents in person to Electronic-filing, from the physical storage of extensive documentation to electronic storage of documents, from pen and paper to word processors. This is coupled with the various instances wherein the judges from the Hon’ble Supreme Court of India and High Courts have shown interest towards the use of technology as an effective tool to embrace the legal system in India.
Legal tech may be convenient to a young lawyer or tech-friendly lawyer but may be difficult to a traditional practitioner or someone not ready to adopt that change. Nevertheless, the ideology to adopt change in a very lucid format has been followed by the legal industry to a certain level. Adding to the circuit of technology and artificial intelligence (“AI”), legal tech is one of the waves which may bring efficient changes and ways to see the legal system and practice of law in India.
Legal Tech, Alternative Legal Services & Legal Outsourcing
Legal Tech, alternative legal service providers (ALSPs) & Legal Outsourcing: these three terms are rather sharing a common interface of legal innovation but have different functions to go forward in the Legal Industry. First, the interpretation of the term legal tech must be studied by associating it with general technology and advancements in the legal industry. On the other side, legal outsourcing (as the term suggests) capturing efficiencies by using external labour could be done in different forms i.e., from a law firm hiring a legal tech software/consultant to a law firm hiring a counsel. Wherein, the ALSPs means legal services but with an alternative plan, structure, and format than a law firm.
The ALSPs are embracing the present practice of law in India which includes legal tech like eDiscovery, contract reviews by AI, Due Diligence, and legal research, etc. as a way forward to adopt change. The author believes that even though they have different stands, they should be read harmoniously because they have a common objective to change the legal industry for the better. They will not only help in white collar crime investigations, discovery and inspection of documents, government requests for investigations, collection and review of litigations, regulatory inquiries, and evidence management but also assist in niche subject areas like Competition Law where eDiscovery technology and processes could help the Director General of Investigation in the investigation of evidence and review of high volume of documents which otherwise takes a lot of time.
Liberalization
The context of liberalization conjoins the ambit of the opening of the legal industry to non-lawyers. The traditional notions of the practice of law have been stretched further to non-lawyers like ALSPs or Legal Tech teams (which may operate in the form of a law firm), legal tech startups, legal process outsourcings, contract agencies, independent ALSPs etc. all of whom function with a common goal to provide more robust and cost effective solutions in the practice of law than what are traditionally offered by law firms and chambers.
In this context, there are three main schools of thought in so far as the integration of legal tech to the practice of law is concerned:
Traditional School: Those belonging to the traditional school are concerned that technology like legal tech, artificial intelligence (AI), and ALSPs would affect their practices and disturb the legal sector in overall terms.
Modern School: On the other hand, this school allows the integration of tech with the legal practice. This school also extends a welcome to non-lawyer positions in law firms like chief innovation officers (CIO), separate legal tech teams etc. which function in similar structures as any other team of that particular law firm.
Both the schools stand by their respective positions and ideologies. However, digital transformation has taught us that things could be more convenient and easier when we adopt technology. Lately, we have seen a lot of procedures specially the ones in the government departments becoming more flexible and convenient with the adoption of technology. From a day-to-day perspective as well, a number of tasks like buying movie tickets, shopping online, consultation with doctors etc. have gone digital. The fundamental advantage in the adoption of technology to any activity is that of “accessibility.” Accessibility has a lot of value in the modern world where people/clients seek convenience before considering anything else. Hence, the idea of cost-cutting starts at the very beginning.
Therefore, to serve our clients better, the idea of technology should be associated with the practice of law so that it is made more accessible. This will also encourage legal startups in the practice of law and promote employment opportunities in non traditional roles like Analysts, CIOs, Practice Developers, etc. Similar sentiments were echoed by the Hon’ble former Chief Justice of India S.A. Bobde when he remarked that, “Access to Justice now depends on access to technology.”
A Sound Approach – Regulatory Sandbox
The term “Regulatory Sandbox” is emerging with the added support of the regulators or government bodies of different countries. The concept in the legal context is rather simple to understand wherein these legal tech products can also give legal advice which is revolutionising the legal Industry. Generally, in this format, the regulators allow the use of technological solutions without much compliance to fit into the present regulatory framework. The objective here is to formulate a safe space for both businesses and regulators and consequently welcome and comprehend new technologies to avoid future problems. This will also provide businesses, especially those engaged in legal tech, with legal certainty.
Recently, the Scottish government has pointed out the need to be more flexible in terms of regulatory power to promote the use and awareness of these regulatory sandboxes. Further, they also stated that even legal tech should be regulated as legal services are at present. This will charge a wave of change in the legal industry for providing legal services in a more innovative manner to reach the masses.
The United States is known to bring the first-hand experience of a regulatory sandbox to promote consumer-friendly innovation and entrepreneurship for financial products in the year 2012. In the year 2016, the fintech sector got the first-hand experience to cherish these regulatory sandboxes which were planted by the United Kingdom’s Financial Conduct Authority. It is important to note that the concept of regulatory sandboxes is sector neutral. Hence, it cuts across all the sectors and not just the fintech sector including sectors like energy, health, and automobile respectively. The impact of these regulatory sandboxes was felt in the year 2020 when 73 sandboxes were in operation in multiple jurisdictions. It is valid to state that the concept of regulatory sandboxes has not evolved much in India but India does have proactive sectoral regulators like the Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDAI) etc. who believe in advancing innovation or investor-centric experimentation for “investor protection.”
In summary, the rationale behind the promotion of legal tech is to improve access to justice. Most lay people are not aware of their rights and consulting a traditional law firm or individual practitioner may be expensive, procedural and time taking at the same. This is where the role of technology cannot be understated.
Lawyers’ vs Legal Tech
One of the key premises behind the idea of using legal tech is very client-centric wherein the concept of traditional law firms or individual practitioners charging their clients on an “hourly basis” (where a client may suffer irrelevant charges) is done away with. Instead, a more optimum fee model designed on “product basis” is envisaged. Hence, client satisfaction where they look for more value for lesser money is taken care of. Law firms and individual practitioners following traditional practices should also have different plans for the client to choose from. This can be designed in the form of “legal service plan or brochure”. This would clearly create a win-win situation for both the lawyers as well as the clients. In addition, legal tech is of great research assistance to lawyers.
Legal Tech also helps the clients to get a clear-cut idea of the service output by knowing the turnaround time for the legal service processes. Those law firms or individual practitioners who (by embracing technology) can offer these insights to the clients would clearly get an edge over their competition. Lastly, legal tech should be seen as a companion and not as an enemy to the practice of law in so far as it is aimed to make their (lawyers’) work easier and more effective by means of innovation.
Legal Tech – Energy and Cost Saver
Considering the legal tech as a platform could be served with a cloud-based infrastructure by avoiding upfront infrastructure investments which helps to reduce hardware and maintenance costs. Some large volume of projects like reviewing a ton of contracts or due diligence with a closed deadline in a law firm requires more manual support by other partners and respective team members and time. But what if the firm has an established legal tech team or legal tech vendor by means of which extensive work could be done in hours without a sweat. In addition, the use of automation or AI in such a large volume of work with time restrictions could be completed with fewer chances of errors.
Most companies have a policy where in-house legal teams are to showcase a report mentioning all the litigation, compliance, and collaboration expenses with a law firm or individual practitioner and the reduction or means to reduce such costs in the future. But this is a back-breaking task for the in-house legal teams. Here too legal tech could play a vital part by providing legal services at lower costs than traditional law firms.
Further, Legal Tech will be helpful for newly incorporated law firms or legal startups by outsourcing non-core functions like Information Technology services and accounts, customer acquisition., etc. which may reduce costs.
Things to Consider
As stated earlier, legal services should be made more accessible to common people. But, areas like alternative disputes resolution and access to justice are still undergoing development in the context of legal tech. Further, the continuous addition of new legal data, practical skills and machine learning are some big-time concerns for the legal tech service providers. Adding to that, legal tech should be made simpler, more user-friendly with a customer support system enrooted within. Lastly but importantly, data privacy and confidentiality of the clients should be maintained with utmost priority. Essential fiduciary ethics should be followed by legal tech service providers.
(This article has been authored by Akshat Dahate, a 5th-year BALLB student at ILS Law College, Pune)
CITE AS: Akshat Dahate, “Legal Tech, Change and Adoption: Integration of Legal Tech in the Practice of Law” (The Contemporary Law Forum, 14 June 2023) <
tclf.in/2023/06/14/legal-tech-change-and-adoption-integration-of-legal-tech-in-the-practice-of-law/> date of access.