It is common at the beginning of each year for experts to make predictions on specific topics, in a kind of futurology service. Since this scribe doesn’t have a crystal ball and generative artificial intelligence platforms (still) don’t predict the future, let’s make some pragmatic perspectives for the Legaltech market in 2024.
Firstly, the classic analogy that writing about technology is like dueling with time is worth mentioning from the start, it’s known who will have the last laugh. That’s what makes it a fascinating challenge. Despite this, the speed of technological transformation serves as an excellent gauge to contrast with how society itself is transforming and making choices, consciously or not, along the way.
In the legal market, the situation is not much different from other segments. Currently, according to data from the CodeX Techindex, a platform developed by the Stanford Law School, there are more than two thousand Legaltechs worldwide. Of these, one-third are online dispute resolution (ODR) platforms, focused on conflict resolution.
The other and more generous slice, as pointed out by legal expert Alexandre Zavaglia, focuses on Legaltechs dedicated to contract management and automation, legal research, document classification and “reading,” data analysis (analytics), legal practice, compliance, litigation management, e-discovery, e-billing (fee management), and legal education.
The vast majority of these LegalTechs, in turn, have some form of embedded artificial intelligence to optimize the delivery of legal services and sell the promise of scalability.
In this aspect, what is expected in 2024 is not new platforms, radical innovations, or a break from the trajectory’s dependence. Instead, the spotlight will be on incremental innovations, meaning existing Legaltechs in the market launching solutions with new versions of advanced language models, such as the use of more robust techniques like Retrieval Augmented Generation (RAG), to deliver more for less. And that’s it.
In fact, speculation is that the chances are slim for the emergence of new players in the market or “out-of-the-box” platforms, in a movement of consolidation and fortification of the existing ones that are leaders in each of the segments.
It will be the year, therefore, of redemption for Legaltechs like Harvey, Eltemate, Casetext, IronClad, Legalist, among others from the United States-England axis, which are currently supported by strong resources from Venture Capital funds to finance the complex architecture behind the responses generated by Large Language Models (LLMs).
In parallel, the legal tech monopoly will be even greater among the leading firms in the market, which have started to develop proprietary, customizable, and exclusive software. In this sense, notable mentions go to Pinsent Mason (elected last year as the most innovative firm in Europe by the traditional award granted by the Financial Times), Allen & Overy, and Hogen Lovells. It’s no coincidence that they will again be in the top rankings and probably dictate the pace of trends. It’s the classic combination of innovation, venture capital, and know-how speaking louder.
The growth curve, therefore, will be flat, where the Legaltech market will not have outsiders, nor major breakthroughs in radically innovative solutions, commonly referred to as disruption. Don’t expect anything that causes chills, excitement, or newspaper headlines. The famous “wow.”
In summary, we will have a kind of more of the same, but with boosted solutions, more increments, in a clear sign of market maturity, acceptance of the inexorable force of technology in law, and the fortification of Legaltechs and big law firms that currently dominate the market.
