Can the Legal Industry Be Disrupted?

Aderant Think Tank

Can the Legal Industry Be Disrupted?

If you point out that technology companies, including many startups, are disrupting entire global industries, you likely won’t get much of an argument. If you make the same case for “disruption” of the legal industry, however, you might get some pushback. While some observers do believe that legal is ripe for disruption, others see inherent limits that will greatly slow the pace of change for your typical firm.

For example, a recent story in The Lawyerist argued that “Setting aside the question of whether or not it is a good idea to disrupt (or reinvent, if you like) the legal industry, the law is impressively resistant to disruption.” The fact that non-lawyers can’t easily provide legal services without breaking the law, as well as wide variations in jurisdictional rules, tend to create high entry barriers. For startups in particular, these barriers have apparently diminished the attraction of new, disruptive legal technologies. In a 2012 story on the most lucrative startup industries, TechCrunch reported legal “in last place” with “0 IPOs and a sub 1% acquisition rate.”

But what about the “pro” side of the disruption case? Many commentators think it’s already happening. The Tech Cocktail site recently ran a story that sees a “startup invasion” on the legal horizon. In support, they contend that:

  • The US legal industry is roughly a $300 billion market
  • Technology is in its infancy
  • There is a definite supply and talent problem
  • Access to lawyers is historically a problematic and costly effort
  • Lawyers used to be the gateways to protected information and knowledge
  • The world is getting more complex, not simpler

BriefMine had a more measured take on the prospects for “quiet innovation” in legal, but they do see a bright future for startups within legal “subsectors”. In a point I largely agree with, they noted that “Just as healthcare has startups working to improve electronic medical records, e-health, medical devices, patient-pay and claims adjudication, the legal industry is seeing new startups pop up across its landscape that are leveraging technology to attack e-discovery, legal research, data analytics, practice management, social media and many, many more.”

Where do you see technology or innovation changing in the legal market? What do you see as the biggest risk or reward? Join the discussion on LinkedIn or Twitter @Aderant and let us know what you think!


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