Legaltech – Poor cousin no longer?

For several years, the financial technology (fintech) sector has been the toast of the London startup scene and one of the hottest areas to invest – and to be seen to invest – in. Some startups like Revolut, which provides digital banking services, have gone on to achieve coveted ‘unicorn status’ – meaning they have been valued in excess of $1bn.

Many other sectors, such as medicine and insurance, which are increasingly combining traditional practice with new technology, are also thriving. But what about the legal sector?

London is the financial capital of the world, making the rise of fintech inevitable. Surely, London’s similarly revered status as an international legal centre should be giving rise to innovation in the legal technology space?

Perhaps, perhaps not. There is a perception in some quarters that ‘legaltech’ seems to be fintech’s poorer cousin, and lags behind in terms of growth and status.

This is understandable, in a way. The 2008 financial crisis and the speed of technological advances combined to create an environment ripe for fintech to prosper as consumers looked for alternatives.

There was no such event in the legal world, so legaltech startups have had to fight for longer against incumbent institutions and models.

However, coming later to the party sometimes has its own advantages.

Thanks to the success of fintech, the startup environment in London is far better developed in 2018 than it was in 2010. All the things that make it easier and quicker to establish a business – technological expertise, financing opportunities, a network of committed experts and supporters – were at best embryonic at the beginning of this decade.

Today, London is the startup capital of Europe, and a destination in its own right for much of the continent’s (if not the world’s) talent.

On the up

The legal sector is now starting to see its own flourishing of legaltech startups, many of which were founded just a couple of years ago. Legaltech businesses such as Lexoo, Avvoka and Juro, are solving issues ranging from sourcing advice from experts, to contract management and applied analytics within the legal sector.

Orbital Witness, for example, are even using satellite imagery to help lawyers complete due diligence in real estate transactions.

The number of these high quality legal startups has multiplied, and they’re attracting funding from some of the best names in the industry, both locally and internationally.

Traditionally, investing in startups was restricted to high-net-worth individuals with the right contacts in the startup industry, institutions that were able to go down the venture capital / limited partner route, or company directors.

However, over recent years, a number of fintech equity investment platforms have opened up the legaltech sector – with investment opportunities starting from as little as £10, everyone can now invest in ambitious, growth-focused businesses.

Investment platforms, such as Seedrs, carry out rigorous due diligence on investment pitches they receive, to ensure that professional-grade protections are in place, enabling you to invest in the latest legaltech or other early-stage businesses.

So, the outlook for legaltech in the UK is bright, the opportunities are varied, and there are many emerging businesses to get involved with as an investor, supporter or mentor.

The Law Society has partnered with equity crowdfunding platform Seedrs. The aim is to connect our members with innovative legaltech startups looking for investment opportunities. Check out the latest investment opportunities currently live on Seedrs.

Keep your eye out over the coming weeks for more articles that will explain what legaltech could mean for the legal community.

Seedrs is an endorsed partner of the Law Society. For more information, visit their Membership Extra page.