Many LegalTechs are supported by lawyers across the Channel. However, in France, the phenomenon remains marginal due to the numerous pitfalls that await the lawyers creating LegalTech. The obstacles result from various factors, both capital intensive but also resulting from a problem of skills as well as changing mentalities. Update on the temptation of the LegalTech start-up.
Technical skills vs. legal skills?
The first obstacle facing a lawyer wishing to create a LegalTech company lies in the very purpose of LegalTech. Aimed at providing legal professionals with the assistance of new technologies, rather than legal advice, LegalTech requires advanced technical skills to deliver real added value to users.
The problem is that lawyers often lack the necessary technical skills and expertise. Consequently, creating a LegalTech company inevitably involves bringing together profiles that complement purely legal knowledge: graduates from engineering and business schools, seasoned entrepreneurs, and so on. This fruitful partnership also allows lawyers to acquire and develop new skills: product design, development cycles, communication, marketing, business strategy, etc. Surrounding themselves with the right people also makes it easier for them to embrace the dual role of startup founder and lawyer, and thus manage two very time-consuming activities simultaneously.
With limited training in the entrepreneurial aspects of their work, lawyers stand to gain significantly by developing a business mindset . Beyond the creation of a LegalTech company, the day-to-day management of the firm can also benefit and be enriched by these new skills. Today, competition is fierce, and adopting an entrepreneurial approach to one's practice seems increasingly essential to stand out and offer innovative services to clients.
Debates on opening the capital of firms
Opening up law firm ownership to outside investors is also the subject of much debate. Lawyers are generally reluctant to accept external funding from third parties. And with good reason: for some, this would compromise their financial and professional independence.
The Macron law of August 6, 2015 nevertheless took a step towards opening up the capital of firms to a larger number of investors, but by imposing safeguards, notably the fact that they must belong to "legal or judicial professions".
While this is a first step, it remains hesitant to adapt to the evolving legal profession and the competition from other market players. Opening up capital to outside investors would make it easier to obtain funding, especially at the start of a firm. Crucially, the minority investor would remain confined to their role as a provider of funds, while decisions on cases and the firm's overall governance would remain their exclusive domain.
This opening of capital to third parties, defended by some, reviled by others, could in any case give rise to certain development opportunities for the firm if it is well supervised.
The question also arises for lawyers' LegalTech companies to operate within the firm's legal framework. However, many LegalTech founders have abandoned this approach due to the financial, legal, and ethical constraints involved, preferring instead to operate as commercial companies . Indeed, one of the new possibilities offered to lawyers by the Macron Law is the ability to develop commercial activities alongside their consulting work.
Distrust of technological projects
Another obstacle is the fact that lawyers, for the most part, seem reluctant to embark on the LegalTech adventure. This is due to the aforementioned obstacles, but also sometimes to a lack of openness within the profession to technological innovations, even those championed by lawyers, which encounter conservatism and prejudice.
However, things are changing. Ambitious projects, led by lawyers, some of whom have since retired, have emerged. Among them is LegalStart , founded by Pierre Aïdan, a pioneer of this new, resolutely innovative approach. More recently, other projects have appeared, such as LegalCluster , created by Jean-Marie Valentin, which aims to provide a shared platform for lawyers and their clients to manage their legal issues, and Data Legal Drive , founded by Sylvain Staub, which automates the implementation and monitoring of GDPR compliance for businesses, in effect since May 25, 2018.
Some lawyers who have created LegalTech solutions have joined forces in a union called "AvoTech." Founded in 2017, the group already includes around 25 LegalTech companies. It aims to be a "do tank," that is, a laboratory for concrete experimentation as well as reflection. Its main objective is to defend and promote the creation of lawyer-led LegalTech solutions as a promising avenue for firm development within a rapidly evolving legal ecosystem. The Paris Bar Association, like others, is launching new initiatives to support innovative projects led by lawyers. Finally, a LegalTech task force within France Digitale, bringing together numerous French startups from all sectors, has recently been established.
Finally, lawyer LegalTech still remains a risky bet for legal professionals today due to the pitfalls standing in the way. However, it can also be a bet for the future and a gap in the legal market to be exploited for lawyers who wish to revolutionize the way they practice their profession.