The law is the second largest professional services sector. It can experience a comeback through firm consolidation, which then opens doors for Enterprise Content Management (ECM) use. In fact, consolidation opens the demand for technology as a whole, both in the United States and the United Kingdom. The entrepreneurial rise of the law sector has brought an entirely new set of technological and operational standards.
The future role of technology in the law sector
There’s no question that the entrepreneurial facets of law are continually increasing, which has opened the door to make the law more accessible to consumers through up-to-date technology. Many sectors have embraced technological enhancements, but the law has consistently lagged in this area. That said, as the sector becomes more entrepreneurial and more consolidated, ECM is poised to offer better accessibility to the law to consumers. This will put technology at the forefront of the law for the very first time.
Why is law such a great place for entrepreneurs?
The law sector is a $300 billion industry and has become one of the best places for entrepreneurs. With more lawyers than are needed by the market, consumers of all sizes—from individuals to multinational corporations—are looking for more affordable legal services. While adopting emerging technology is basically the standard in other sectors, it has yet to be widely adopted in the legal field. The combination of these two facts makes it a great place for entrepreneurs to enter.
In 2013 there were a total of 31 venture capital deals, which shows us that the market is not nearly as saturated as some might think. There is still plenty of space for new players, and there are some trends the experts want us all to be looking out for.
- Startups will lower the cost of standard legal services. It’s true that no two legal issues are the exact same. It’s also true that there are tons of DIY legal alternatives out there for relatively simple things like incorporation documents and short contracts. If attorneys want to be able to compete with technology on these issues, they’re going to have to come down on price. Startups generally have very low budgets and they’re simply not going to invest in expensive legal services if there are DIY sites out there that can do it for them. The reality, of course, is that there are downsides to using these sites, and there is room for attorneys to convince potential clients that legal services are worth the cost—but first those costs must come down.
- Firms are going to consolidate. Thanks to a wide range of document review technologies and sophisticated legal software, certain tasks that once took hours can now be done in minutes. This may sound like good news, until you consider that law firms bill by the hour. Startups are likely to continue to pay for real legal advice from an expert, but the old law firm method of hiring junior associates to slowly learn their trade no longer works. The entire structure of law firms is changing. Experts suggest that in the next decade or two the industry will primarily consist of no more than 20 top-tier firms.
- The model of law firms will continue to change. It’s already started, but this technology demand is going to lead to even further changes in the way law firms are modeled. The services sector in general is moving toward a number of changes, starting with the way people find attorneys, how law firms find the best talent out there, and the ways in which attorneys collaborate and offer legal services. Operational cost savings are possible for those who can see these new opportunities and find ways to provide meaningful solutions. There’s no question that law firms are going to have to change if they want to remain competitive.
- The move to lawyers as entrepreneurs will continue. Whether it’s a choice or a necessary reaction to changes in the economy, the old adage of layers hanging up a shingle is returning—with a vengeance. However, starting a law firm these days isn’t that different from starting up a tech company. Of course these lawyers have the extra responsibility of ethical scrutiny and following regulations. More and more we’re seeing attorneys on social media, writing blogs, taking on speaking engagements, and utilizing technology to create a practice and operate with maximum efficiency on a tiny budget. They’re then able to offer their high quality services at prices their clients can afford.
Other issues face startup law firms, like finding ways to market their firm, financing their startup, and meeting technical regulations, all of which are more challenging in the legal sector than they are for non-legal companies. However, for the firms that embrace technology instead of shunning it, the world of entrepreneurship brings nothing but opportunity.