Investing in legal tech – where to start?
The creep of the Big Four into the legal sector has not gone unnoticed amongst the profession and Deloitte’s recent announcement that it is placing technology at the heart of its legal services offering with a number of high-profile hires is certain to make law firms sit up and take note.
Speaking about these hires, Michael Castle, Deloitte’s UK managing partner, said: “The clients often tell us that the legal services market is currently not meeting their needs in the innovation and technology space.”
There is no denying that in the past five years, technology has rapidly become one of the most vital investments a law firm can make, with most businesses alive to the benefits and efficiencies technology can bring.
However, take-up of these developments has been sluggish across many law firms and as such, they risk being left in the dark. But it is so difficult for many firms, especially those operating in the litigation space to properly manage their cash flow on a day-to-day basis, meaning a huge, ongoing investment like technology is tricky. Often, innovations such as artificial intelligence and Cloud-based platforms need constant investment as the technology evolves and the lawyers must be trained how to properly utilise these tools and platforms so they’re achieving the right efficiencies. So how do firms free up their cash flow to ensure they can invest in the technology they need and steal a march on their competitors?
This is where we are seeing legal funding really come into its own. For example, our product, the Costs Advance facility, can be the perfect solution to free up working capital, which can then be used to invest in technology. This facility works when a case has been won and a draft bill of costs has been issued – in this situation, the law firm’s funds are tied up in ongoing costs negotiations but the facility immediately releases the cash. This not only increases the firm’s liquidity, but also gives the lawyers involved in the case the gift of time, as well as the financial muscle, to negotiate a better settlement and not a compromise. And it’s not just suitable for large firms – VFS Legal Funding has provided around £100m in seven years to 60 law firms with turnovers ranging from £500k though to in excess of £50million.
Technology is a great leveller in the legal profession and clients expect their lawyers to be utilising these technologies no matter what their size. It’s here that legal funding can really help give firms a boost over their competitors – essential as the legal market continues to evolve at breakneck speed.
Rick Gregory, VFS Legal, Modern Law Magazine Issue #44