Keeping Up With the Legal Tech Landscape

By Steve Sowers and Chris Dillon

The legal tech landscape is growing at a mind-numbing pace. The space is expanding quickly across a number of different sectors. The key driver of this rapid expansion is the ascendance of powerful software platforms. As Marc Andreessen of Andreessen Horowitz is fond of saying, “software is eating the world,” and that is certainly true of cutting-edge legal technology. To get an idea of what’s on tap for the near future, let’s take a closer look at what’s driving this incredible growth in legal tech.

First, legal services are a cost center. Whether a company uses in-house or outside counsel, legal services are perceived as a drag on its bottom line. A number of legal tech startups have emerged to reduce the costs of legal services. These companies create new kinds of marketplaces for legal services, matching buyers with pre-vetted sellers of those services. These marketplaces are something of a cross between LinkedIn and Uber. Similar to LinkedIn, prospective clients can evaluate a lawyer’s profile and expertise, and like Uber, a service order can be placed through the platform without needing to visit the lawyer’s official offices. With the marketplace model, legal professionals are able to find clients in an efficient, cost-effective way; clients are able to get quality legal services without engaging a big firm.

Second, some legal tasks are best handled by software. Automating these tasks is not only possible, in many cases doing so results in reduced error-rates over the status quo approaches to completing those tasks. For example, automating business formations, state-based compliance, and registered agent services reduces the costs of those services significantly. In addition, machine learning software will one day be sophisticated enough to revolutionize the discovery process by minimizing the need for human oversight. This is a particularly exciting space, since e-discovery platforms have already made significant progress in reducing the costs associated with discovery in the litigation process. What’s more, software companies are already finding new ways to make it easier to disclose and register intellectual property innovations.

Third and finally, the practice of law is due for a reboot. The traditional law firm is a pyramid: a few partners at the top, a somewhat larger group of senior lawyers below the partners, and then a much larger group of young, less-experienced lawyers supporting the higher levels of the pyramid. In recent years, that pyramid has proven to be quite shaky, as the largest firms have had to merge in order to build larger and larger business footprints.

This third segment has been disrupted by startups keen to reorganize that traditional pyramid. The idea is this: if you remove the high costs associated with running a modern law firm, you can reduce prices to a point that actually increases the demand for those services. Once you remove those costs, you can then build a distributed, decentralized law firm. That decentralized firm can enhance the quality of legal services while simultaneously providing lawyers of all levels of experience to optimally serve their clients. These new firms will of course not be able to compete with traditional firms in some areas, including bet-the-company litigation. However, when it comes to transactional services, regulatory advice, and intellectual property management, the distributed law firm has a clear advantage over the traditional law firm.

Of the three areas noted above, the second category – software powered legal tech firms – represent the biggest opportunity. Startups in this area are building on incredible advances in machine learning, AI, and data science that will enhance the delivery of legal services. This, in turn, will allow clients to reallocate resources spent on traditional legal services to more important objectives, like research and development. We are entering an exciting time in legal technology, a time that will absolutely reshape the legal services landscape so that it is fundamentally more friendly to the interests of clients.

Steve Sowers is the EVP at LegalInc, a Dallas-based SaaS company. Steve lives in Frisco, TX with his wife and three children. When not working, you can find Steve volunteering as a coach and a league director for Frisco Soccer Association. Contact Steve at (972) 865-7425 and at Chris Dillon is the SVP at Legalinc. Chris recently relocated to Frisco, TX with his wife, two daughters, and two dogs. When not in the office you can find Chris spending time with family and friends. Contact Chris at 949-480-7071 or at