How regulators can advance lawtech and protect consumers

Cat Farrow, Head of Stakeholder Engagement at CILEx Regulation, discusses her key takeaway points from the Legal Services Consumer Panel's most recent lawtech roundtable.

Earlier this month I went along to a lawtech roundtable discussion hosted by the LSCP. As a relative newcomer to this, I was interested to understand how technology is driving change in the legal services market.

There seems to be no real consensus on whether the terms “lawtech” and “legaltech” are interchangeable. Legaltech is often seen as technological solutions created for legal services providers to help them streamline and (in some cases) automate their services. Lawtech can be seen as more disruptive in that it aims to develop technologies that allow consumers to interact with legal services themselves. In reality, both terms seem to be used to talk about technological innovation in the market.

The roundtable discussion covered access to justice, the current influence of technology in the market, and how the financial services sector is grappling with the many opportunities and challenges of fintech. But the focus was really on what regulators can do to promote and enhance lawtech at the same time as protecting consumers. Here’s what I took away.

  • It sounds obvious but if you’re going to regulate something effectively, you need to understand it properly. By observing tech in action, regulators can better understand what an appropriate regulatory framework should look like. From a provider’s perspective, clear regulation allows them to understand what they can work with, and they can then play in that space. We’re likely to see more activity in regulatory “sandboxes” in the future.
  • If lawyers of the future require new and different skills, so will regulators. We can only encourage the right things and discourage the wrong things if we truly understand the impact of technology on consumers, providers and the market more widely. And we have to act now. By doing nothing, we would tacitly be taking a position on the potential of technology to transform the legal services market and consumers’ experiences when they engage with it.
  • In terms of technology’s ability to increase access to justice, the market is fairly quiet and could remain so for some time. Now is not a good time to attract the investment that innovation requires, with consumer finances still stretched and a continued reduction in legal services paid for by someone else (traditionally government).
  • The main impact on consumers is thought to be the “trickle-down effect” from business technology – with most of the benefits coming from more streamlined processes and slicker case management systems. While certain providers are starting to explore the interactive capacities of technology, the focus at the moment seems to be on simplifying legal jargon and smoothing out existing processes.
  • Innovation is perhaps more likely to come from frustrated consumers rather than within the legal sector itself. It’s the people struggling with the system who spot the opportunities for improvement and become the entrepreneurs.
  • We may be seeing little innovation because it’s difficult to re-imagine how to approach a problem, but also because many technological solutions are steered by data. More can be done across the sector to make it available and accessible. This could drive the development of platforms designed to help consumers make choices.


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