By Aisling O’Connell, Regulatory Policy Manager at the Legal Services Board
Accessing legal services can be a real challenge for small to medium enterprise (SME) businesses. Many don’t recognise their issue as a legal problem. Those that are aware don’t always know where to seek advice, how long it will take to resolve the problem, and how much it will cost. Add to this the stress, anxiety and fear that many can feel when dealing with a legal issue, and we start to scratch the surface of why accessing legal services can be a challenge for so many.
Technology can help open-up access to legal services and help SMEs resolve their legal issues. For example, digital tools can help SMEs identify legal routes to solving a problem, such as an unpaid invoice. It can also help SMEs understand their choices, such as which legal services provider would be best equipped to advise on an employment issue or how SMEs could resolve the problem themselves. In essence, technology offers SMEs another way to access services in a way and a time that works for them.
The Legal Services Board worked with Lawtech UK on research to help us better understand how SMEs address their legal problems and their attitudes to legal technology solutions (‘lawtech’). The research (PDF) was carried out by Community Research and involved:
- A 1-week online forum with 40 SMEs, 10 of whom had used lawtech solutions previously
- A mix of discussion boards and surveys exploring SMEs legal needs, their experiences and attitudes towards legal services providers, and their impressions, or experiences of lawtech solutions
- In-depth interviews with 20 SMEs
The research found that SME’s legal needs fall into two categories: they tend to be reactive, such as a debt issue or employment dispute, or proactive, such as drafting a new contract. Irrespective of the need, the research suggests that SMEs want solutions that are good value for money, won’t take a disproportionate amount of time, and ultimately reassure them that their legal issue will be dealt with. While many of the SMEs in our research were broadly happy with how their legal needs are currently met, there is scope to improve. Specifically, helping them understand when they have a legal solution to their problem and simplifying how they choose a legal services provider.
Combining lawtech with traditional providers to better meet SME’s needs
There is a real opportunity for lawtech to help meet the needs of SMEs. One of the most powerful takeaways from this research is the opportunity for traditional legal services providers to work with lawtech solutions. SMEs do not want to choose between lawtech and traditional providers – they want both. Legal professionals are highly trusted, and SMEs want to draw on their expertise, particularly when they feel that their legal issue is unique or particularly complex.
On the other hand, SMEs are more than willing to do some things themselves. They see tangible benefits for lawtech to deliver fast, efficient, and affordable solutions, particularly for those issues they see as simple and straightforward. This points to huge opportunities for traditional providers to work with lawtech providers to design and deliver end-to-end, consumer-focused services. Not only can this maximise consumer choice and help to address the unmet legal need, but it can also build consumer confidence in technology.
Regulators can build SME’s confidence in lawtech solutions
Legal services regulators have an essential role in fostering and supporting technological innovation, including clarifying what role technology has in meeting consumers’ needs and how risks can be managed. By being clear on their approaches, regulators can build confidence in lawtech and ultimately open-up access to legal services.
There are already great examples of regulators working together in support of innovation. The SRA, CILEx Regulation and CLC, for instance, are working together to trial approaches that will help increase information available to consumers, and ultimately make it easier to compare providers and choose the right legal services provider for them. Innovators are also benefiting, such as through the Regulatory Response Unit – a cross-sector forum run by Lawtech UK that brings all legal services regulators together to support innovators.
There are many more opportunities for regulators to work together in support of innovation, including considering whether and how joint guidance can support innovators to enter the market and how the ethical and regulatory challenges posed by new and emerging technologies, like AI, are best managed. Regulators can also continue to build their understanding of technology and innovation by engaging directly with the public to better understand their needs and regularly reviewing how technology is being used within their sectors.
In the coming year, the Legal Services Board will focus on how we, as the oversight regulator, can foster responsible innovation within the legal sector. This includes understanding how emerging uses of technology align with standards of trust, which we will explore in research with our Public Panel. We will continue to collaborate with others in the sector and support existing initiatives like the LawtechUK Sandbox and Regulatory Response Unit. We will also consider technology and innovation as part of our regulatory performance framework review and work with other regulators to help create more and better quality open data, including by exploring policy proposals for a Single Digital Register.
Collaboration and joint working are core tenets of ‘Reshaping Legal Services: A Cross-Sector Strategy’. It is only by working together that the sector can reshape itself to better meet society’s needs. Technology is an area where collaboration is essential to achieving real change.