Regulating Lawtech
Computers, the internet, and artificial intelligence have long been considered to operate in a somewhat lawless space.
With the rapid advent of law tech and legal tech, the legal industry is now considering what can be done to ensure that the software systems designed, built and operated, meet the sector’s rigorous professional standards if computers are to take on an increasing share of solicitors' workload. In recent weeks, both the Solicitors Regulation Authority and the Law Society made important announcements on the subject of lawtech.
Researchers at the University of Oxford published a report on the state of the market, commissioned by the SRA. This and several recent studies have identified digital working's 'fast forward' impact on the pandemic. However, the report also highlighted a gulf between concerns about the computerisation of the ‘BigLaw’ sector, a term used to describe the biggest and most prestigious law firms, and those addressing ‘PeopleLaw' - essentially, high-street law firms. Strikingly, in the burgeoning lawtech sector, over 95% of investment is going towards helping BigLaw companies.
For many years, the regulator has recognized a role in correcting the imbalance. A strategic priority over the next 3 years is to ensure that innovation led by legal technology helps meet the needs of citizens, businesses, regulators, and the economy at large. With the Oxford report, more initiatives have been revealed aimed at promoting and building confidence in lawtech.
To start with, 'collating and sharing information on the typical cost of technologies and innovations' will be undertaken in order to challenge the perception that firms cannot afford new technology. Additionally, SRA Innovate has launched a redesigned website and has applied for funds under the government's Regulators' Pioneer Fund.
As another ambitious move, the SRA suggested that it could endorse or accredit lawtech suppliers or systems, stating that it remains uncertain whether standard accreditation services should be tailored to legal products. SRA Innovate, the regulator's innovation service, is in the process of considering taking on the task.
The idea of a checklist or standards list for innovators is being explored, designed for sharing to inspire and support tech developers. This may consist of a checklist of accreditations required for lawtech firms by government, industry, and regulatory agencies. An SRA statement noted that the aim of such a standard list is to assist law firms in making purchases of legal technology from companies that adhered to such standards.
As part of its work on law tech and ethics, the Law Society also announced its likely accreditation standards for lawtech design, development and deployment and can be guided by the following five principles.
- Compliance: Lawtech must be designed, developed, and used
according to regulations. - Lawfulness: The design and development of lawtech must be
underpinned by the law. - Capabilities: Producing and using lawtech products calls understanding the features, benefits, limitations, and risks associated with their use.
- Transparency: Both operators and clients should have access to information on the way lawtech solutions have been designed, deployed and used.
- Accountability: Lawtech should be adequately regulated when used to provide or deliver legal services.
There has been a tendency to see the internet, computer technologies, and artificial intelligence as somewhat lawless in the past. The overarching principle of the above principles is that of client care, in that lawtech must ultimately be driven by the client who decides which business requirements to consider. In keeping with the ethical obligations of solicitors, it is hoped that any accreditation or standards system will be the first step towards the digital transformation of the legal profession.
