The Solicitors Regulation Authority of England and Wales (SRA) has published the results of its independent study into innovation in the legal sector, commissioned in March. The study was carried out on behalf of the SRA by a research team at the University of Oxford which included Professors Mari Sako and John Armour. The study has concluded that the majority of law firms were increasing their day-to-day use of technology, however, the development of bespoke legal technology was largely focused on advances which would benefit larger corporate clients.
The study has found that the pandemic has significantly impacted the uptake of technology, over the past 18 months it has been found that 87% of firms now use video conferencing services to meet clients and 66% store data in the cloud. 90% of firms also reported that changes made during the COVID-19 pandemic will be kept in place to some extent.
Technology usage was found to be highest among younger firms, firms operating through alternative business structures, and firms working in areas where technology was already established, like conveyancing. In terms of more advanced technology use- such as the use of automated documents, interactive websites and artificial intelligence – a little more than a third (37%) of law firms said they were currently using these.
The research found that the key stumbling blocks in innovation were related to funding and scalability. This meant that most bespoke development among technology companies was focused on products for the corporate sector. Firms working with individuals and small businesses stated that the most common barriers to accessing more advanced or targeted technological solutions were affordability, a lack of inhouse technology skills, or uncertainty over the business benefits from making an investment.
Anna Bradley, Chair of the SRA, said: “Supporting innovation and the adoption of legal technology is a key priority, as we set out in our Corporate Strategy. It can help increase access to justice for the public and small businesses, as well as supporting firms to be more efficient, benefitting everyone and the economy as a whole. These findings drive home the fact that when we talk about technology, we need to remember just how broad that term is and how far there is for some to travel. This is not just about artificial intelligence, virtual reality or future technologies. Some of the innovation which has the greatest potential to improve access to justice at pace is already available. Such technology can be applied widely and be used on a day-to-day basis to benefit both consumers and law firms. The challenge now is how we all work together to enable this to happen.”
Mari Sako, Professor of Management Studies at the University of Oxford and project leader for this research, added: “Technology and innovation have already changed, and will continue to change, the face of the legal services sector. Our research provides robust evidence of this. But we also found that benefits from legal technology are not evenly distributed across different market segments. Regulators, including the SRA, collaborating with other stakeholders could play a major role, not only to lower regulatory uncertainty but also to level the playing field across the market segments.”
Based on their report, researchers identified three key areas to be addressed in order to allow for greater development of innovation and technology:
- Greater support and co-ordination among government, regulators and tech developers – particularly in encouraging innovation and identifying funding paths
- Increasing public and law firm trust in new approaches and technologies
- Increasing the technological and innovation skills and knowledge bases within the legal sector.