Insight

How innovation can unlock legal services for the majority

In a recent speech, Lord Burnett of Maldon (the Lord Chief Justice of England and Wales) said: “It is not every generation that is called upon to question the fundamentals of their systems, of their ways of working. The implications for all of us of the digital revolution are all too apparent. Justice cannot be immune from them.”

The rule of law should apply equally to each of us, regardless of circumstances, yet this is not always the reality. Being able to access expert legal support could be the difference between defending your rights when faced with a bullying boss or maintaining contact with your children after a family breakdown.

Unfortunately our legal services market lags behind other sectors in adopting the kinds of innovation that have transformed and enhanced other parts of the economy, making access to the law out of reach for the majority of everyday people and small business owners.

As the Lord Chief Justice stresses, legal services cannot be immune from the digital revolution. But there is a tension in the use of “cannot”. On the one hand it suggests inevitability and, on the other, moral imperative – but are what will happen, and what should happen, in alignment?

In many areas of our lives, from financial services to transportation to education, the trend in recent decades has been towards greater openness and ease of access – enabled and accelerated by computers and digital technology. The combined effect of technology and competition in many markets has been to make “user journeys” ever more seamless, intuitive and tailored to the individual, often while lowering cost. Whether it’s doing your banking on your mobile or being able to compare hundreds of different car insurers in a few clicks, other sectors have been transformed by new technology. This has served to rebalance power from providers to customers. Yet, the legal services market is an outlier in this regard.

The digital revolution is certainly reaching into legal services. Whether called lawtech or legaltech, it’s clear that the legal sector is in the early stages of technological disruption with start-up investment in legaltech crossing the $1billion mark in 2018 . However, this investment is overwhelmingly focused on helping commercial law firms raise the productivity of their in-house lawyers and better serve their corporate clients. Meanwhile the public sector has embarked on a hugely ambitious transformation of the courts and tribunal system to streamline processes.

What is still notably in short supply is digital technologies that can directly support individuals and small businesses in accessing legal services, conveniently and affordably. The paucity of such services in the UK in 2019 is concerning. Without them, access to legal help will continue to be seen as an impenetrable process, accessed only as a last resort and, even then, only if it’s affordable.

The result is a “legal gap” in the UK where many people and SMEs experiencing legal problems do not receive professional legal support. Over half of adults in England and Wales faced a legal problem in the last three years, and yet only one in three people sought expert advice or assistance. The other two in three instead dealt with the problem alone, with the help of friends and family, or did nothing. Indeed, the average small business faces eight legal issues every year, but only one in ten takes advice from a solicitor or barrister, with small businesses being more likely to approach an accountant than a solicitor.

Both the public and small businesses cite a number of barriers to using legal services with cost perceived as a major issue – 63% of people do not believe that professional legal advice is affordable for ordinary people. In addition, some people are simply not aware that their problem is a legal issue and don’t know how to start addressing their problem.

Both the public and small businesses cite a number of barriers to using legal services with cost perceived as a major issue – 63% of people do not believe that professional legal advice is affordable for ordinary people . In addition, some people are simply not aware that their problem is a legal issue and don’t know how to start addressing their problem.

While the scale of the challenge in reversing these numbers seems daunting, we can view this as an exciting time for the legal sector, when innovation and technology could transform how legal services are delivered, accessed, and experienced. Imagine if ordinary people and small businesses were able to diagnose their issue and understand their options at their convenience, take steps to resolve their problem without a lawyer (where possible) and then, if required, identify a lawyer that’s right for them. Then, the lawyer, supported by software, potentially underpinned by intuitive Artificial Intelligence, would be able to provide efficient and effective advice at the point they can really add value.

There are some examples of solutions working towards achieving this vision, such as tools to support appeals against benefits decisions, eviction notices, and tools which help businesses to create tailored contracts. However, the development of innovative solutions that directly help individuals and small businesses to address their legal problems are very much in their infancy. There are also barriers to adoption such as a fragmented market, deeply ingrained ways of working, lack of awareness and trust, and challenges for providers in developing sustainable business models.

In 2016 the Competition and Markets Authority highlighted inadequate competition and innovation in direct-to-consumer legal services for ordinary citizens and SMEs. Since then, there has been some progress, but bolder action is needed.

While the scale of the challenge in reversing these numbers seems daunting, we can view this as an exciting time for the legal sector, when innovation and technology could transform how legal services are delivered, accessed, and experienced. Imagine if ordinary people and small businesses were able to diagnose their issue and understand their options at their convenience, take steps to resolve their problem without a lawyer (where possible) and then, if required, identify a lawyer that’s right for them. Then, the lawyer, supported by software, potentially underpinned by intuitive Artificial Intelligence, would be able to provide efficient and effective advice at the point they can really add value.

There are some examples of solutions working towards achieving this vision, such as tools to support appeals against benefits decisions, eviction notices, and tools which help businesses to create tailored contracts. However, the development of innovative solutions that directly help individuals and small businesses to address their legal problems are very much in their infancy. There are also barriers to adoption such as a fragmented market, deeply ingrained ways of working, lack of awareness and trust, and challenges for providers in developing sustainable business models.

The Solicitors Regulation Authority (SRA) has been working on a package of measures designed to support the wider industry with innovation. This includes its innovation space, and changes to give legal businesses more flexibility, and solicitors more freedom as to where and how they work. But, given the scale and urgency of the challenge, there is also a case for direct efforts to stimulate innovation, demonstrate the kind of change that is possible, and identify and remove any barriers that prevent innovation. This is why the SRA is partnering with Nesta Challenges to deliver the Legal Access Challenge.

The Legal Access Challenge will seek out technology-enabled innovations which directly help individuals and small businesses to understand and resolve their legal problems in more affordable and accessible ways. Applications will open in late May and a limited number of finalists will receive initial development grants of £50,000 with an additional £50,000 prize in Spring 2020 for the winner from among the finalists.

A challenge prize is a proven way of stimulating innovation in order to find solutions to social problems. They are also much more than a financial prize. Their design is unique in that they offer entrants additional support, advice, new partnerships and experts that the organisation would not normally be able to access. They also encourage ideas from a wider base of applicants and, in such a fast-paced world driven by technology, it’s vital to consider every idea.

The Legal Access Challenge will aim to enable the development of new solutions and prototypes, or improve functionality of current prototypes, as well as encouraging partnerships between parties interested in innovating in this space. It demonstrates a proactive approach towards regulation – anticipating the technological developments in a market before they appear – and there will be deep engagement between the SRA and the innovators throughout which will in turn support the SRA in its goal of enabling law firms to take advantage of these new developments.

The Legal Access Challenge cannot, on its own, resolve problems that – to paraphrase the Lord Chief Justice – are in many ways about the “fundamentals of the system”. But our hope is that, through demonstrating the kinds of customer-focussed innovations that are possible, the Challenge can point the way to a different future where firms are able to provide quality, lower cost services to a greater range of customers while freeing up lawyers’ time to spend on higher value tasks. As a result, the lawyer, assisted by technology, could soon become an ally to the majority, and not just the minority.

Chris Gorst, Head of Better Markets, Nesta Challenges

This article was originally published in Legal Futures on 7 May 2019