Why legal technology startups should have a lawyer in-house

In-house lawyers bridge the gap between tech and law, argues Marlon Hylton

Marlon Hylton

Law is the latest industry to be disrupted by technology, with startups devising new technology solutions for old challenges within the industry. Lawyers are increasingly recognizing the potential cost savings and increased efficiency that come with implementing legal technology.

But while lawyers are finally catching on to the importance of implementing new apps and digital tools in their practice, most law-tech startups are ill-equipped to deal with the unique regulatory and data requirements that law firms and legal departments deal with on a routine basis. The solution? Law technology companies need to start relying on in-house lawyers to bridge the gap between tech and law.

While implementing new software allows law firms to remain competitive, legal tech companies with lawyers as part of their teams can help developers build innovative solutions that successfully address the specific challenges of the legal profession. For example, solicitor-client privilege and privacy obligations limit lawyers’ ability to allow third-party vendors to observe and gain familiarity with the daily proceedings of legal firms. Without this level of connection, it’s difficult for tech companies, where workers often have a limited understanding of legal practice, to successfully establish and customize IT systems or software to meet the needs of their target client base.

The legal profession’s begrudging adoption of technology has also increased the divide between law and tech. Its attitude towards digitization makes it a more difficult field to penetrate for developers compared to other, more accessible, industries. It’s both unreasonable and unfair to expect developers to have an intrinsic understanding of how a product might best meet the needs of an industry that until very recently was willingly insulated from technological intervention.

A lawyer on staff can also provide developers with perspective not only about why the field has been reluctant to embrace technology, but how lawyers view tech solutions. The legal perspective often favours a task-by-task basis for tech as opposed to the more holistic system overhaul favoured by developers, which may sound like a drastic and unnecessary step to many lawyers, without sound and thorough communication from both sides.

Legal tech companies with consistent, easy, access to lawyers hold a significant advantage with regards to product development because it provides real-time access to the target client base. An in-house lawyer might offer invaluable perspective on how a lawyer might engage with a particular product or system that a tech developer simply can’t provide.

While innovation is a vital component of a successful product or service, so too is compliance in heavy-regulated industries such as law. Compliance, in turn, requires a thorough understanding of legal practice and the regulatory framework that, most often, only an experienced lawyer can reliably deliver. In-house lawyers can give legal tech companies critical insight into regulatory needs that might otherwise be lacking during the development process. In turn, that input can help ensure that products and services are designed to operate within the regulatory framework in a manner that is also harmonious with the day-to-day operations of a law firm or in-house law department.

The demand for innovative legal technology solutions is on the rise, and tech companies will need to retain a competitive edge as the industry becomes increasingly saturated. The presence of in-house lawyers is a valuable selling point because it gives law firms and legal departments the confidence that developers have a solid grasp of the distinct requirements of their field.

As a result, an on-staff lawyer can enhance collaborative efforts between the tech and legal worlds, leading to increased adoption of technology by often-dubious law firms, and increased profitability of tech companies. Think of it as hiring a local tour guide on an overseas vacation versus trying to navigate an unfamiliar city with only a guidebook. A lawyer’s input can also help startups establish the credibility that will enable them to stand out in the ever-growing sea of product developers.

Legal technology must work for lawyers, which is why it is crucial for legal tech developers to have lawyers work for them. Complementing the skills of experienced product developers with those of in-house legal practitioners provides the guidance developers may be missing to create an optimal product. Keeping a lawyer on staff can be a key asset in fostering understanding between the two fields, improving collaboration, and creating products and services that meet the needs and wants of modern firms and their clients.

There’s no question that technology has become an essential tool in the daily operations of law firms. An in-house lawyer can act as an ambassador between the two industries and their very different languages as they become increasingly enmeshed. To maximise their potential, law tech startups would be wise to seek out and hire lawyers to ensure that the most important information doesn’t become lost in translation.

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