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- London is house to 44%of Europe’s law startups and the city has been flagged by The Law Society as one of 10 emerging “lawtech” ecosystems.
- The UK federal government has dedicated ₤ 2 million ($ 2.5 million) to digitizing the sector.
- Motivated by the success the UK has actually seen in fintech, where UK start-ups raised almost $50 billion in 2019, a lawtech sandbox will launch at completion of 2020 to improve R&D in the sector.
- The UK’s lawtech market is much less fully grown than fintech, but has “comparable potential,” states Tech Nation’s lawtech director Jenifer Swallow.
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The UK capital boasts 44%of the lawtech start-ups in Europe, according to financial services industry body TheCityUK, and at the end of last year, The Law Society recognized it as one of ten emerging lawtech scenes, along with San Francisco, Tel Aviv, and Madrid.
The UK government is attempting to ramp up provisions for lawtech.
The hope is that lawtech might be a thriving sector akin to the UK’s fintech scene, which brought in almost $50 billion in investment in 2019 according to KPMG
With that in mind, Tech Nation in May introduced a fintech-inspired sandbox for lawtech startups that will launch at completion of this year to offer a controlled testing ground to drive R&D.
Recipients of the earlier fintech sandbox consist of NatWest’s mobile organisation bank Guts and HSBC-backed open banking start-up Bud.
As well as resolving the immediate requirement, the goal is to produce long-term development and worth for companies, says Swallow: “What we wish to do is provide an environment where we can accelerate development cycles, get individuals who’ve got excellent concepts through to proof of worth quicker than they would do without assistance.”
The UK is currently well-placed to become a lawtech center, she says, with a concentration of tech, a leading legal sector, and the advantages of a more lax regulatory system than countries like the United States.
” Experimentation and development is happening in lawtech but it is a nascent market overall, with ₤290 million in overall financial investment worth in the UK, compared to ₤10 billion in tech investment,” says Swallow. “It is much less fully grown than fintech, for instance, and has comparable potential.”
DoNotPay.
Financial investment is getting: in the 2 years to 2019 financing for UK lawtech practically tripled, according to research by Thomson Reuters and Legal Geek.
According to Swallow, a lot of activity is still at angel and seed round, but growth-stage tech financiers like Highland Europe are participating the action.
In July, Highland was associated with a $25 million round for Farewill, a London-based will-writing start-up, and it has formerly invested $21 million in copyright platform Incopro.
Partner Stan Laurent says that Highland is interested in the lawtech sector– even outside the world of artificial intelligence, which is “in the pure legal area, still a couple of years out.”
” I think we’re typically more bullish on the spaces where technology is really assisting to enhance user experience in the end,” he says.
Laurent believes that the existing capacity in lawtech is worldwide, however sees some gain from the sandbox initiative for the UK’s lawtech community.
He states: “The entrepreneurial kind of momentum around fintech, which is quite established in the UK versus other locations has, I would believe, also helped to move a few of the legal tech”
Another lawtech startup that recently raised is robotic lawyer app DoNotPay The US-based startup, which likewise runs in the UK, netted a $12 million Series A from financiers including Andreessen Horowitz and Founders Fund in June.
Established by Stanford dropout Joshua Browder in 2015, it markets itself as “a lawyer for the customer”, helping individuals with little legal disagreements like parking tickets fines utilizing algorithms that mine information from successful appeals.
Browder thinks that some of its success with financiers boils down to mass-market appeal.
” I think that pure lawtech is not that attractive, like legal research tools and things like that,” states Browder. “But where lawtech combines with something else and it’s viewed as a mass-market customer item, that’s when I believe it’s very hot.”
He sees huge potential in the UK market.
” I believe there’s in fact a big quantity of activity in that in the UK, much more so than in the US,” states Browder.
” It’s not even about the money,” he states, describing the federal government’s ₤ 2 million grant, “it’s also about people’s attitude. In the UK, when I speak to legal representatives, they’re much more forward-thinking.”
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