The United Kingdom legal profession is far more advanced than any other country. The UK was one of the first countries to allow law firm IPOs and non-lawyer ownership of law firms.
In the United Kingdom in 2007 launched alternative business structures (ABS) for law firms. The first company that used ABS in the UK is called Co-Op.
Back in 2007, the United Kingdom was interested in how tech could transform legal services. The new ABS laws were not implemented until 2012.
The co-operative group (Co-Op) is a national treasure in the UK. It has a large bank and insurance group. Further, it even does funeral services in England. The business does around 14 billion pounds in business per year.
Innovation was moving fast in England. There were also talks about Tesco (a large grocery chain) coming into the legal services. Many solicitors in England were very nervous about large businesses entering into the legal industry.
Co-Op was delivered online-only and offered fixed fees only. At its height, it was delivering services to 300,000 people in the UK. It focused on ordinary and hard-working British people. As opposed to high-income individuals.
ABS worked really well and the sky didn’t fall. There was no drop in the quality of legal services. However, there weren’t a lot of large companies that entered the United Kingdom legal services industry. This was a shock!
The United Kingdom hasn’t seen a lot of new companies enter the legal services industry. This is probably because of the small size of the market. Further, the complexity of the market. It hasn’t been an attractive model for large investments.
There are around 2000 alternative business structure firms in the UK. However, many of them are law firms that are focusing on innovation.
The large four accounting firms have entered the legal services industry in the UK. Further, some law firms in England have registered on the stock market.
There is a large unmet market of people who cannot afford legal services. So why is the access to justice problem growing every year?
Legal Services Market
Most people think they can’t afford legal services. This is true even if they actually can come up with the money. Research out of the Law Society of England said that small businesses and individuals have unmet legal needs.
About 40% of people in England each year have something that a solicitor could have helped them with. 50% of people that actually received legal help didn’t pay for it. They got free legal advice.
Many governments are spending money on promoting the fact that legal aid is available. However, most of the population is not low-income. Therefore, they do not qualify for legal aid. Further, much of the population is not high-income. The average person in England cannot afford a solicitor at 500 pounds per hour.
Even in the UK, there have not been any game-changers in the legal industry. The industry is ripe for new cutting-edge legal tech.
Law Tech Panel
Christina Blacklaws chairs the Law Tech Panel in the United Kingdom. It is mostly financially supported by the legal industry in the UK. They also have funding from the British government. Law Tech Panel was set up in 2019. The panel is made up of many government individuals as well as top legal industry professionals.
The organization was set up to encourage the digital transformation of legal services in England and Wales. In addition, they make sure that the laws in England are fit for the purpose of modernizing the UK legal profession.
Once they improve the British legal services profession, they want to go global. The Law Tech Panel believes that the legal innovation market is $1 trillion.
Also, they want to provide clarity for how smart contracts and crypto assets are treated as property under the common law system.
They are also helping UK legal tech companies grow. While growing, they want to make sure these companies follow the Law Society of England laws. The Law Tech Panel wants to help companies help the entire market.
Innovate The United Kingdom Legal Profession
The government gave them 20 million pounds. Innovate United Kingdom used this to invest in solicitors and academics doing important work. The group has partnered with Oxford University. They are taking on 31 small projects. They are investing in projects that take on the issues of data access and data sharing.
There are exciting opportunities if companies can gain excess to the data law firms sit on. Everyone would look at things in a different way if companies can use big data. Of course, this needs to protect people’s information safely.
Getting data from the courts and big law firms is very difficult. There needs to be a strategy on how to safely get data from the courts and firms. In Europe, there are strict data protection laws that focus on private data. There is a grey zone between what is private data and what is public data.
Innovate UK invests heavily in the legal industry space. B2B companies are way ahead as they got much of the investment. There has not been anywhere as much investment in the B2C space.
Brexit pushed things back with the B2C innovation. And then, of course, COVID-19 hit. This has pushed the projects back a few years. B2C companies have been left out in the rain.
If there is no external investment in B2C companies, then the government needs to start off the investment. The government also needs to push the modernization of the legal sector. Technology is rarely the problem. The issue is that solicitors must actually use technological solutions once they are available.
Legal Technology | United Kingdom Legal Profession
Christina Blacklaws said that new solicitors need to see the opportunities in the legal innovation space. The UK has superb universities that are creating talented solicitors. However, much of the focus is on the 20th century. Law schools need to focus on what the legal sector is going to look like in ten years.
There are a few universities in England that have been changing their curriculum. Manchester University has started blending computer science, business, and law school together to encourage multidisciplinary disciplines. These are core models in the University that try to cross disciplines.
Solicitors won’t need to be able to code, but they will need to be comfortable with tech. Also, they will need to work on their emotional intelligence. Further, they will need to be able to improve their communication skills.
In conclusion, if you want to learn more about legal businesses, contact the author.
Author: Alistair Vigier is the CEO of ClearWay Law