3 questions to smart minds

Legaltech — the Digital ®Evolution

For this 3 questions to Dr. Jan Schinköth

Photo: Jan Schinköth
26. Octo­ber 2016

Fintechs are present in all media thanks to their econo­mic rise and are now widely known. Now the term “legal­tech” is beco­ming more and more popu­lar. But what exactly is behind it? Should compu­ters take over the work of lawy­ers in the future? — Here are 3 ques­ti­ons for FYB author Dr. Jan Schin­köth, who will be cove­ring the topic of “Legal­Tech” in detail with his colle­ague Stefan Walc­zak in the upco­ming FYB 2017. 

For this 3 ques­ti­ons to Lawyer and part­ner at DLA Piper UK LLP in Munich

1. What exactly do you mean by the term legaltech?

Even lawy­ers are not immune to tech­no­lo­gi­cal change. Legal­tech descri­bes the use of modern, compu­ter-based, digi­tal tech­no­lo­gies to auto­mate, simplify, and — it is hoped — improve legal disco­very, appli­ca­tion, access, and admi­nis­tra­tion through inno­va­tion. Looking at the pace of tech­no­lo­gi­cal advance­ment, the next five years are criti­cal for law firms to adapt to the new envi­ron­ment. The digi­ta­liza­tion of recent years has not left law firms unsca­thed and has signi­fi­cantly chan­ged the day-to-day work of lawy­ers. Howe­ver, the conse­quen­ces of the current chal­lenges will be much more profound.

2. How does the market curr­ently look for Legaltech?

The U.S. is (argu­ably) home to the most start­ups in the indus­try. In Europe, broa­der inte­rest in legal­tech has only recently emer­ged, but it is growing stron­gly. Although there are many white spots on the map, it can be assu­med that this is a global pheno­me­non, espe­ci­ally since many start­ups are not neces­s­a­rily tied to one juris­dic­tion with their service. Over­all, howe­ver, relia­ble indus­try figu­res are lack­ing, so it is diffi­cult to make a gene­rally valid state­ment. The very hete­ro­ge­neous busi­ness models of the start­ups make this even more diffi­cult. Howe­ver, the size of the legal services market fires the imagi­na­tion of inves­tors and foun­ders alike.

3. Thought proces­ses take place during due dili­gence. Should Legal­tech also be applied in such areas?

Some legal­tech compa­nies are taking advan­tage of so-called machine lear­ning tech­no­logy, which is desi­gned to ease or remove labor-inten­sive proces­ses for lawy­ers. Often, for exam­ple, the review of contracts for certain clau­ses and their summary is part of the legal due dili­gence in M&A tran­sac­tions under­ta­ken by asso­cia­tes or para­le­gals. The use of such tech­no­logy can contri­bute to signi­fi­cant time and cost savings here. So far, the tech­no­logy has been limi­ted to pre-filte­ring infor­ma­tion accor­ding to certain crite­ria, leaving the actual analy­sis to the lawyer.

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