New research gives hope for the future prospects of legal technology Down Under, however there remain issues for those in this space to be aware of.
The “Global Legal Tech Report for Australia” – a collaborative research project by the Australian Legal Technology Association (ALTA) and Alpha Creates, with the backing of sponsors Macquarie, KPMG, the Law Society of England and Wales and Toro Digital – has found the Australian legal tech market to be well placed looking ahead to the future.
According to Legaler CEO and ALTA board director Stevie Ghiassi, who was the report’s global director, an examination of Australia’s legal tech companies reveals a “vibrant, thriving and kaleidoscopic market”, which is home to a diverse range of companies at many different stages of development.
“It will be interesting to track the impact of COVID-19 on this market, given it represents both a threat and an opportunity for legal tech companies,” he said.
Looking more broadly, Alpha Creates researchers Eric Chin and Graeme Grovum said there were three “clear” themes emerging from the Australian market for those in the legal tech space to be aware of:
- Gender representation and differing focus
The under-representation of women at senior levels in Australian law firms (28.5 per cent of partners in Australia’s 50 largest law firms are female) is mirrored in legal tech companies.
The report found that only 30 per cent of Australian legal tech companies have female founders or co-founders, it noted.
“Australian legal tech companies founded by women are more likely to focus on a broader target market than just law firms and are also more strongly focused on the domestic market, with 44 per cent interested in international expansion compared to 84 per cent of those without female founders or co-founders,” Mr Chin said.
- AI companies are thriving
Despite dominating the legal media headlines, the researchers continued, artificial intelligence is “not the main engine” that powers Australia’s legal tech companies, with only 30 per cent of respondents identifying AI as their core technology engine.
“However, it is clear that AI-based companies are bullish on the future, with twice as many developers, almost universal plans to increase their developer teams and more ambitious international growth plans than non-AI based companies,” Mr Grovum observed.
- Integrated solutions attract external funding
Finally, of the 54 report respondents, 59 per cent are integrated solution providers (that is, a technology platform with more than one solution) while 41 per cent are point solution providers.
“More integrated solutions providers (52 per cent) have been successful in attracting external funding than point solutions providers (32 per cent),” Alpha Creates noted.
Mirroring what was found with AI companies, integrated solution providers also have larger developer teams and stronger appetites for expansion into international markets, the researchers added.
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ALTA and its project partners iManage, The Law Society, Alpha Creates and Toro Digital are delighted to be launching the second Global Legal Tech Report.
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The global legal tech industry is a growing and diverse market, comprising heterogeneous regions at different stages of development, according to the results of a year-long comprehensive study into the sector.