On 21 January, more than 30 members of the UK lawtech community attended a stakeholder engagement workshop in central London, organised by the work package six (WP6) research team. Workshop attendees included lawtech vendors and funders, law firm innovation heads, industry group representatives, and government officials involved in lawtech and legal services innovation.
The workshop, held at the headquarters of the Law Society of England & Wales, aimed to obtain industry feedback on WP6s planned research into the lawtech “ecosystem”. This research project, which runs until March 2021, is funded by UKRI, a semi-independent UK government agency.
The event kicked off with an overview of the Law Society’s own research into legaltech, delivered by Law Society CEO Paul Tennant. The University of Oxford’s Professor John Armour then provided an overview of the wider University of Oxford “AI for English Law” research project, of which WP6 is one part. This was followed by an introduction to WP6 by Professor Mari Sako, who explained the rationale for exploring legaltech from an ecosystem perspective. An ecosystem perspective, she said, allowed for examination of those who were involved in both the supply side (to explore technological advances) and the demand side (to exploit the technology) and of the lawtech market.
Revealing some of the research group’s wider findings, Dr Richard Parnham began by offering a preview of the LawTech skills survey, which the Oxford team conducted in association with the Law Society. One of the more notable findings of this research, Dr Parnham said, was that only a very small minority of private practice-based solicitors currently work with anyone than other solicitors: barely one per cent said they worked with data scientists, for example.
One of the survey’s findings suggested that barely one in five of respondent said their employers captured data effectively, thereby allowing that data to be used by lawtech. By contrast, just over 40 percent said their organisation did not capture data effectively, with the remainder broadly neutral. On this specific point, one workshop attendant enquired how these findings compared with other industries – indicating that this particular finding was unlikely to be unique to the legal sector. Dr Parnham replied that this was an important point, and one that the research team would investigate further.
Dr Matthias Qian’s first presentation focused on the findings of work package four – a “big data” analysis of job adverts in the legal sector over the past few years. This research aimed to track the prevalence of job adverts that required applicants to have AI / machine learning capabilities.
Discussing his team’s findings, Dr Qian observed that there had been a steady increase in legal sector job adverts that required AI / machine learning capabilities in various locations around the world, albeit to sharply differing degrees. That said, Dr Qian also observed that the total number of legal job adverts requiring these capabilities remained very small: even in market-leading Belfast, he demonstrated, this figure had barely reached seven per cent of job adverts by the end of 2019.
The group’s findings sparked a debate among workshop attendees about why the percentage of legal job adverts that required AI / machine learning skills might vary from location to location. For their part, members of the University of Oxford research team suggested that location-specific ownership rules for legal practices may play some part in explaining these differences. The easier it was to bring machine learning specialists into the ownership and management structures of legal practices, it was suggested, the easier it might be to hire such professionals.
Dr Qian then moved on to present the group’s preliminary findings in relation to WP6, the lawtech ecosystem research project. Dr Qian began by explaining that the initial phase of the ecosystem research had focused on the importance of “social ties” between lawtech company founders. These social ties were based around company founders studying at the same academic institution, or working for the same employer at the same point in time. The existence of these ties was inferred from the co-founders’ LinkedIn profiles, Dr Qian explained.
Invariably, several event participants asked whether additional cofounder ties might be investigated, and mapped, supplementing education and work ties. For example, it was suggested that individuals who attended the same hackathon or company incubator might also be a point of commonality. Here, both Dr Qian and Dr Parnham agreed that expanding the range of social ties was desirable – so long as the data was available, and capable of being analysed. The education / employment metrics, used for the pilot study, had been selected because they were “low hanging fruit,” Dr Qian said.
Continuing with the “keeping the research project’s scope manageable” theme, Dr Qian also explained that the research project had focused on the social ties of lawtech company founders that had established their startups in three locations only: London, New York and the San Francisco Bay area. But, in order to offer a comparative perspective on lawtech, Dr Qian also explained that the research team had also compared the social ties of lawtech company founders with equivalent founder in the fintech community, operating out of the same three geographical locations.
Perhaps surprisingly, the research group’s provisional findings revealed that founders of London-based lawtech startups had the lowest levels of social network connectivity of all six ecosystems evaluated. By contrast, the San Francisco bay-based Fintech community was – by far – the best-connected ecosystem. Focusing specifically on Lawtech, for example, nearly half of all San Francisco start-up founders evaluated had studied at the same educational institutions, compared with one in five in London. Similarly, just under one third of founders in San Francisco had prior workplaces in common, compared with around one in seven in London.
Whether this lack of prior social network connectivity within the lawtech ecosystem – particularly in relation to the UK – should be regarded as problematic was discussed by briefly by workshop attendees. Positively, several suggested that the fact that lawtech company cofounders in London rarely had common employment or workplace connections might be a good thing, because it indicated the diversity of the London lawtech community.
Moving beyond describing the lawtech and fintech ecosystems, Dr Qian outlined another aspects of WP6s’ research: was it possible to identify any correlation between the intensity of startup founders’ social ties, and their companies’ abilities to receive external funding? The group’s preliminary findings suggest that there was a correlation, particularly in relation to employment ties.
The first part of the workshop drew to close with a brief discussion of another strand of the lawtech ecosystem project – a planned study of law firm innovation leaders. Dr Parnham briefly outlined why the research team felt it important to study these individuals, highlighting their role as a key contact point for lawtech startups. Dr Parnham also indicated that an embryonic labour market for law firm innovation leaders appeared to be emerging. This, he suggested, may play an important role in propagating innovation across the legal sector.
For their part, several workshop participants said they were particularly interested in learning about the supporting infrastructure that lay behind the innovation leaders – including the control of budgets. One participant also asked whether focusing narrowly on innovation professionals was appropriate, given than some firms were innovative by nature, and may not have a designated individual in charge of this role.
Small group sessions
In the event’s second session, attendees were divided into four groups, and asked to consider a separate overarching theme, that might impact on the lawtech ecosystem: the perceived advantages of London as a location; the bottlenecks to scale-up – both financial and talent-related; the achievements of law-related incubators and accelerators, compared with incubators / accelerators of a more general nature; and the possible regulatory barriers to lawtech startup scaleups. Each focus group included participants with a diverse range of lawtech backgrounds, and also at least one expert on the topic to be discussed.
Bringing the day’s proceedings to a close, Professor Mari Sako thanked all participants for their valuable feedback, which she explained would feed into the group’s research. The day ended with well-deserved drinks, kindly provided by the Law Society.