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 pitfall standing in the way of the lawyer wishing to create a LegalTech lies in the very reason for being a LegalTech. Aiming to provide assistance from new technologies to legal professionals and not legal advice, LegalTech requires advanced technical skills to bring real added value to users.
The problem is that lawyers often do not have the necessary know-how and technical skills. Consequently, the creation of a LegalTech necessarily involves the association of complementary profiles purely legal: engineering and business school graduates, seasoned entrepreneurs, etc. This fruitful association also allows lawyers to acquire and develop new skills: product design, development cycles, communication, marketing, commercial strategy, etc. Being well surrounded also leads them to more easily adopt the dual role of startuper and lawyer, and thus to manage two highly time-consuming activities at the same time.
Little trained in the entrepreneurial dimension of their activity, lawyers have a lot to gain from developing a business manager mentality. Beyond the creation of a LegalTech, it is also the day-to-day management of the firm that can benefit from it and be enriched with these new skills. Today, competition is strong and having an entrepreneurial approach to your practice seems more and more essential to stand out from the crowd and offer innovative services to clients.
Debates on opening the capital of firms
The opening of firm capital to outsiders is also the subject of numerous debates. Lawyers are generally reluctant to open up to external financing of third parties. And for good reason, for some, it would amount to tainting independence financial and professional lawyers.
La Macron law of August 6, 2015 nevertheless took a step towards opening the capital of firms to a greater number of investors but by imposing safeguards, in particular the fact that they must belong to “legal or judicial professions”.
If this is a first step, it is still timid to adapt to the evolution of the legal profession and to competition from other market players. Benefit from the opening of capital to external investors would make it easier to obtain funds, especially when starting a practice. Above all, the minority investor would remain confined to its role as fund provider while decisions on files and the general governance of the firm would remain a private 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 LegalTech lawyers to act within the legal framework of the firm. However, many creators of LegalTech have given up on it given the financial, legal and ethical constraints that it represents, preferring one of the forms of commercial society. It is also one of the new possibilities allowed by the Macron law for lawyers to develop commercial activities alongside their consulting activity.
Distrust of technological projects
Another pitfall, we must take into account the fact that the majority of lawyers seem reluctant to embark on the LegalTech adventure. This is the case because of the obstacles mentioned but also sometimes because of a lack of openness of the profession to technological innovations, even carried out by lawyers, which come up against the conservatism and prejudices.
However, the lines are moving. Ambitious projects, led by lawyers, some of whom have since hung up their robes, have seen the light of day. Among them are LegalStart, founded by Pierre Aïdan who was one of the precursors of this new spirit resolutely focused on innovation. More recently, other projects have emerged such as LegalCluster, created by Jean-Marie Valentin whose ambition is to offer a common platform between lawyers and their clients to manage their legal issues, or Data Legal Drive, founded by Sylvain Staub, which automates the implementation and monitoring of companies' GDPR compliance, in place since May 25, 2018.
Some lawyers who created LegalTech have grouped together in an “AvoTech” union. Founded in 2017, the group already brings together around 25 LegalTech companies. It aims to be a “do tank”, that is to say a laboratory for concrete experiments but also for reflection. It aims above all to defend and promote the creation of LegalTech for lawyers as an interesting axis of development for the firm in a rapidly evolving legal ecosystem. The Paris Bar, like others, is launching new promotions aimed at supporting innovative projects led by lawyers. Finally, a Legaltech taskforce within France Digitale, bringing together a large number of French startups from all sectors, just saw the light of day.
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.
