Let’s be honest about this, most people will want to


try and avoid lawyers. They are in the same


category as the police; you don’t want one until you


need one.  Which is probably why a lot of their 


marketing comes to nothing.  It’s very much a “distressed” purchase for most people


unless of course you are in business.  


In that case, you will need lawyers at some stage.

Through my connection with Angels Den, I deal with a lot of new businesses and start-ups and there’s plenty of anecdotal evidence and articles written about how lawyers ruin deals at the due diligence stage or even how they can stall innovation.

But while individual lawyers might be seen as obstacles, the legal profession and the legal industry in general still represent great opportunity. This sector, which historically has been ignored by entrepreneurs and investors, is starting to experience a start-up invasion.

In his book The End of Lawyers? Richard Susskind suggested disruptive technologies would be the key to massive change in the legal sector.

Here are six key facts that make the legal industry ripe for disruption and innovation.

1. The UK Legal Services Market is worth £26 billion a year.  The Business to Business (B2B) section of that is worth 89% or £23 Billion. The largest 3% of firms, that’s under 900 firms, generate 55%  or nearly £13 Billion of that.

That means that there are almost 29,000 “firms” chasing the remainder. And since 2006 there has only been a  compound annual growth rate of 2%

You can get the full UK Legal Services Sector report here: http://tinyurl.com/cvnwkt4

2. Technology is Still in its Infancy. New tools and platforms that have reached many other sectors are only now beginning to enter the legal marketplace. For example, data analytics – while massive in other commercial markets – is barely existent in the legal sector. Data is abundant in the legal profession – everything from a company’s entire email archive to the information that exists in all the filings and briefs that lawyers create. Lawyers work with and create data every day. Currently, the vast majority of this data sits idle, untapped and unused. What resides in this data is the potential for creating products that predict outcomes in cases, quantify and qualify lawyer performance, and create transparency within the legal process itself. For some examples, see LexMachina,( https://lexmachina.com/)  a company putting analytics to work in the IP realm. Also www.Trademarken.co.uk and UK & Ireland companies House information for free at www.duedil.com

There is an abundance of technology available, but it’s the reluctance of the sector to use it.

3. There is a definite supply and talent problem. Whilst roughly 15,000-20,000 students  will graduate with a law degree every year (this may be declining in coming years), in England and Wales approximately 6,000 will go on to seek a training contract with a firm, in Scotland there will be approximately 600 doing the same.  A law degree is only the starting point to becoming a lawyer. Graduates still need to gain a one-year Diploma place and then a traineeship.

Those lucky enough to gain employment with a law firm must rely on the firm to train them to actually be of any use in a commercial environment; a practice that yields anything but consistent and comprehensive training.  Outside of firms, these new graduates will need to find alternate paths to becoming competent , and their choices are severely limited. This creates a unique over-supply, limited-talent phenomenon where the available lawyers are not adequately trained to actually be lawyers. Start-up opportunity here lies within edtech and scalable instruction. Is there a Khan Academy or Udemy model for new lawyers?

4. Access to lawyers is historically a problematic and costly effort. UK individuals who actually need lawyers still tend to try and avoid lawyers because they don’t want to pay high fees, nor do they really know how to find a reputable and trustworthy lawyer. Many legal needs are going unmet due to this phenomenon. By lowering cost structures, lawyers would be able to serve this immense market. Through a combination of technology, tools, and processes, platforms are being built to do just that. But the market is in its infancy. Even though http://www.wigster.com/  or http://www.justanswer.co.uk/ or https://www.rocketlawyer.co.uk/   and  in the US http://www.legalzoom.com/ have a head start, they have only scratched the surface.

5. Lawyers used to be the gateways to protected information and knowledge. They were the conduit through which clients accessed legal information and guidance. With the advent of technology, this information is now more accessible than ever before. The general public is able to locate relevant and helpful information without the assistance of lawyers (or at least without paying fees to lawyers). There are still many resources that lawyers do have control over, but these are diminishing greatly. PlainSite and LawGives are two recent plays in this space.

6. Finally, and most importantly, the world is getting more complex, not simpler. Corporations are burdened with greater oversight and compliance obligations. Some companies even use the legal process (and all its costs and distractions) as a way to punish or hurt competitors (see patent trolls).

Consumers and the public are also more aware of their legal rights and obligations. In our “lawsuit happy” nation, neighbours and friends will sue each other in an effort to gain – rightfully or not. Creating alternate paths to litigation, or avoiding problems altogether, are huge opportunities. There are ways to bypass lawyers and the court system entirely. For example, a former executive at eBay has built Modria as a platform for dispute resolution that involves no lawyers at all.

There are many other facts and reasons why the legal industry represents real and significant opportunity for start-ups.  For a profession and industry that literally impacts every single person in dozens of ways, it would seem that the need and urge to innovate would be palpable. Start-ups need to stop looking at lawyers as a pain, and see them as an opportunity. If you cannot avoid them, disrupt them.





This article was in turn inspired by a great article at: http://tech.co/legal-industry-startup-invasion-2013-03
Mostly about the US legal market. This has been updated and changed to reflect the UK legal market


Great book to read: Mitch Kowalski ; Avoiding Extinction; Re-imagining Legal Services for the 21st Century