Goodbye 2023, you have been swell
The legal technology vertical has witnessed significant developments in 2023. The changes to the landscape are reshaping how lawyers and technology will be working together. We wanted to reflect a little on these developments, and we were lucky enough to be joined by Cheryl Wilson Griffin (of Legal Tech Consultants) in our contemplations of this remarkable year.
Here is a link to our 20 minute conversation:
We did not cover everything we wanted during our chat with Cheryl (it was only 20 minute, after all). So, we wanted to add a few more trends that we expect will continue into 2024:
Generative AI Adoption: The release of OpenAI's GPT-4 marked a turning point for the competence of generative AI. More generative AI tools are gaining prominence in the legal sector, with companies like LexisNexis and Thomson Reuters integrated generative AI into their offerings. By the end of 2023, nearly 27% of legal professionals reported using generative AI for work-related purposes, and this is likely going to continue surging in 2024.
Shift in Legal Technology Investments: There was a decline in mergers and acquisitions and overall investment in legal technology in 2023. However, strategic investments like Thomson Reuters’ acquisition of Casetext and its generative AI product, CoCounsel, for $650 million, highlighted the ongoing interest in some technologies and opportunities. We are also seeing investors placing a lot more bets on the potentially outsized impact of generative AI in the legal profession.
Remote Work and Hybrid Models: The post-pandemic era saw many lawyers and law firm employees preferring remote or hybrid work models. This shift had significant implications for talent retention, recruitment, and the reconfiguration of law offices. With more law firm leases coming up for renewal in 2024, we see a bifurcation of work cultures into those who mandate in-person attendance and those who encourage work from home.
Regulatory Changes Regarding Non-lawyer Participation: It seems like a lifetime ago when regulatory reforms started allowing for non-lawyer ownership in law firms and participation in legal services, e.g. in states like Utah and Arizona. Some new companies and services started to emerge from these reforms in 2023, e.g. those aiming at commoditized legal services and those bridging the justice gap. We expect to see more entities forming in 2024.
Game-Changing Developments in Law Firms: Law firms embraced several technological advances, such as generative AI chatbots, innovative client offerings (e.g., virtual case management platforms), legal tech subsidiaries for custom software solutions, advanced data analytics, and cloud-based document management systems. These law firms are creating new markets, and increasing competition, which will benefit the purchasers of legal services.
Diverse Legal Tech Offerings: Despite the focus on generative AI, 2023 also saw a variety of other legal tech advances, including legal case management software, litigation management, virtual legal assistants, identity management, client data protection, robotic process automation, automated document review, smart legal contract management, immersive technology, and advanced computing.
In 12 months, we will open this blog post again to see how many of these trends actually played out in 2024.
