Login | August 08, 2020

Legal tech investment dives from the pandemic

Technology for Lawyers

Published: July 10, 2020

The first time I heard the term “legal technology” was on Scott Piepho’s website “Pho’s Akron Pages” some time in I think the late 1990s. He had decided to designate regular old commercial technology like computers and word processing “legal tech” if it was applied in the law office. Thought it was a cool approach, as I had used every available piece of technology in my law office when I practiced. I ran a feature story in these pages about his website, and shortly thereafter Rick Smith, the then-editor of this paper, asked me to write a weekly legal technology column. Should have probably gone to Scott. Hi, Scott!
Fast-forward to 2020, pandemic and all, and legal technology is a billion-dollar enterprise.
According to a lengthy analysis by Bloomberg, legal tech investment from various funding sources totaled almost $1.4 billion in 2019. In 2020, the industry is “seeing layoffs and salary cuts” because of the economic downturn caused by COVID-19 and other economic forces.
The industry as a whole is projected to show a decrease in investment, according to Crunchbase data. First quarter 2020 investment was about $161 million, as opposed to the $400 million in Q1 2019 (although half of that was one very large investment).
But the downturn in investment may not necessarily be mirrored by a downturn in sales.
In fact, any technology dedicated to remote office functions has or will soon see a great uptick in sales. So here we have the dilemma of how to actually measure legal tech—one which gets back to the original definition of the field from the 1990’s. If standard t3echnology—particularly for remote office work—is applied to the law office, is that somehow transformed into “legal tech”? If so, how could it possibly be measured?
A Clio survey from early May found that more than 80 percent of attorneys acknowledge that cloud-based apps are going to be more important in the law office going forward from the pandemic. Bloomberg points out that sales of cloud-based remote working apps were not figured into the Crunchbase data. So how is one to actually know what the economic impact of that technology is directly on the law biz?
Anyway, the law business as a whole will be far different after this pandemic is over. Stay tuned for more analysis on that topic.