The state of legal software looks promising, but it could be more so, apparently.
For instance, the legal software market is valued at $0.23 billion and is expected to grow at an annual rate of 30.9 percent through 2022.
But there’s a catch it seems. Most firms aren’t using these tools, which include artificial intelligence (AI) technology. There remains a lack of awareness of its promise.
All of this comes from a recent report by TheBusinessResearchCompany.com called the “Legal Software (Focus On Machine Learning) Global Market Report 2019.” The legal software market is expect to grow to $0.68 billion in about two year’s time, the report notes. Increasing demand for intelligent business processes in law firms is driving the growth of the machine learning market.
Intelligent business processes include adoption of AI or machine learning in the business processes. AI is the development of system that has the ability to perform tasks requiring human intelligence. Software solutions are highly adopted in developed countries like the USA to achieve benefits, such as contract management and efficient legal data analysis. Machine learning helps legal firms and professionals to manage their huge data and derive insights from them.
According to 2018 Legal Technology Survey Report by ABA Surveying, 35% of respondents from large firms with over 500 attorneys reported they used AI, and 16% of respondents at firms with 100 or more attorneys were most likely considering an AI purchase.
The report notes:
Lack Of Awareness Of Machine Learning Will Restrain The Legal Software Market:
The machine learning market is restrained due to lack of awareness among law firms. Data, information and knowledge, together constitute a vital business asset for law firms in the decision-making process. Law firms are in an increasingly competitive market, as large accounting firms are re-establishing their legal practices and reducing the amount of work available for the legal firms. According to a survey by Bloomberg Law, only 24% of law firms use machine learning or AI, thus indicating the knowledge gap and underuse of the technology. The lack of awareness of AI/machine learning hampers the growth of the legal software market.
Availability Of Online Platforms To Find Lawyers/Attorneys:
Many online platforms have been introduced that provide potential clients an opportunity to connect with lawyers for simple services such as trademark registration, leases, registration and execution of wills, contracts and lease agreements, dishonoring of cheques, recovering suits, and consumer complaints. For instance, LegalZoom, a US based firm, helps you find attorneys without any hourly fees, and documents provided by this firm are accepted by courts and government agencies across all the 50 states. This trend in providing online legal services will drive the demand for legal software.
Regulatory And Competitive Landscape Of The Legal Software Market:
Legal software is used to deliver solutions and services using artificial intelligence and machine learning for corporate legal departments and law firms. Legal software that includes artificial intelligence (AI) and machine learning (ML) are yet to be fully regulated by governing bodies in order to protect the confidential data involved in the processes. For instance, the Indian government is yet to regulate the development and implementation of AI. However, countries such as the USA are contemplating over the regulation of ML and AI, as there could be a threat in legally constraining the ML or AI before it could fully be developed in practice.
Major players in the legal software market are Microsoft Corporation, IBM Corporation, Google, Inc., Baidu, Inc., and Hewlett Packard Enterprise Development LP (HPE). Companies have been investing in merger and acquisition activity to strengthen and expand their businesses. In October 2018, Clio, a cloud-based legal practice management solution provider acquired Lexicata for undisclosed amount. This acquisition will help Clio provide an entirely client-focused and firm-centered product suite that includes practice management, CRM, and client intake. Lexicata is a leading law firm CRM (customer relationship management) and client intake software.
