By LE Desk
May 1: COVID-19 has accelerated the use of digital tools and platforms in the legal industry, further increasing adoption of legal technology, or legaltech. For many attorneys and legal technologists, 2021 will see more companies embrace artificial intelligence (AI) and analytics, amid rising demand for greater efficiency by clients and increasing growth of data, Fintech News Switzerland has said.
Catherine Casey, CIO of legaltech company Disco, predicts that in 2021, the use of AI in law will move from being a hyped trend to being researched and integrated more extensively by the industry.
“In 2021, AI in law will stop being categorized as new … and just recognized as necessary,” Casey told Fintech News. “This is the year that legal AI moves out of the Gartner hype curve’s ‘peak of inflated expectations’ into the promised land of the ‘slope of enlightenment’ — legal teams will move from hype to practice and improvement.
“The industry is integrating AI seamlessly into legaltech … and the result is (finally) increased adoption and in some cases a shift to using some level of analytics and AI as a default.”
Similarly, Rebecca Eisner, a partner at global law firm Mayer Brown, said her company has seen a sharp increase in the use of AI tools provided through platform cloud offerings, a trend which she expects will continue in 2021.
Results of the 2020 Bloomberg Law Legal Technology Survey, released in August last year, found that in-house legal departments and law firms are embracing AI at a rapid pace. The majority of respondents said they frequently used technologies that employ AI or machine learning algorithms, with legal research (82%), electronic discovery (e-discovery) (59%) and document review (52%) cited as the most prominent use cases.
Fresh data on legaltech funding are scarce but previous research and analyses suggest that investment began accelerating in 2018 when funding surpassed US$1 billion, up over 700% from 2017. 2019 surpassed 2018’s levels in just the third quarter when investments reached US$1.2 billion.
In 2020, legaltech companies continued to attract large amounts of money with notable deals that included Verbit’s US$31 million Series B and US$60 million Series C, both closed last year; Everlaw’s US$62 million Series C; and Disco’s US$60 million venture round.
This year, interest in legaltech is picking up as more companies are seeking to digitize aspects of their businesses and shed costs. More startups are moving beyond the early stage; later stage startups like Notarize are closing mega-rounds of US$100 million or over; and established players like Clio, Ironclad and DocuSign are making strategic investments and acquisitions to solidify their positions.
Data from Legalcomplex.com’s Spark, a dashboard for legal and regulatory solutions, show that merger and acquisition (M&A) activity in legaltech reached an all-time high in January 2021 with 19 deals for the month. That’s more than double the number of legaltech M&A deal in January 2020.
Legaltech M&A activity began increasing in mid-2020 when monthly deal counts jumped from about four to nine deals, to now be hovering anywhere between 12 and 19.
Legaltech refers to the use of technology and software to provide legal services and/or to support the legal industry with practice management, document storage, billing, accounting and e-discovery.
In Switzerland, the industry is represented companies such as Legartis, a contract intelligence solution, Swisslex, a digital legal information platform, Jur, a blockchain startup developing a multi-jurisdiction online dispute resolution platform, and GetYourLawyer, a lawyer network and online platform for legal services, Finch News said.