It’s no secret that until recently, the word “technology” — or even worse, “AI” — could make in-house teams shudder, perpetuating the industry’s reputation as laggards in terms of technology innovation and adoption. But doing more with less means optimization of daily tasks is no longer a nice-to-have — it’s critical.
So what exactly can we expect to see from the legaltech industry in 2022? Here are some of our predictions:
A Rising Tide Lifts All Ships
Demand for solutions that automate frequent, repetitive tasks and enable workflow and process efficiency continues to fuel significant growth across the sector.
And because of this growth, 2021 was a monumental year for legaltech. 2021 saw three legaltech unicorns go public, with many others reaching or coming dangerously close to unicorn status. Couple that with growing investment across the industry topping $1B and you’ve got all the makings of a major industry breakout.
Just a decade ago, you’d be hard-pressed to find any private equity firm with a legaltech company on their balance sheet. Now? They not only have them on their balance sheets, but many have specialized verticals focused on legaltech. If that’s not a harbinger of growth, then what is?
“The Business of Legal”
2021 was a transformative year for businesses across the board. With some companies still reeling from the economic effects of 2020, many corporate legal departments set out to do more with less in 2021 — with new technologies playing a key role in enabling their success.
That theme — doing more with less — will drive a bigger trend across the industry: operationalizing and optimizing “the business of legal”.
What will that mean? Sure, it will definitely lead to software adoption and increased use of analytics, but it will also be the driver of many other trends.
“The Great Unbundling”
2021 will continue to accelerate new approaches to getting things done. From ALSPs to other types of providers, alternative solutions for accomplishing tasks will continue to emerge and grow — and there’s an increasing focus on what corporate legal departments can do to allow lawyers to be lawyers. This will be true for both in-house and law firms.
We’re still in the early innings of the legaltech revolution, but the current notion of how certain types of work are executed is under increasing scrutiny. Does an in-house attorney really need to spend their time on discovery work when there are great alternative solutions for that? Nope.
From states like Utah softening the rules on legal services ownership to the proliferation of ALSPs — both independent and captive — you can expect the “great unbundling” to continue in 2022.
Solution Platformification & Verticalization
Corporate legal departments know they need to start leaning on technology but the plethora of solutions out there can be overwhelming. Buyer fatigue is real, and organizations don’t want to devote countless hours or resources to onboarding a multitude of vendors.
Leading legaltech organizations are taking note of this and leading the charge on platformification — and acquisitions are playing a major part in that. Just look at our parent company, Onit, who acquired five companies within the past few years — four of them in the past two years alone! Being a “one-stop-shop” for a buyer will continue to be incredibly valuable in 2022.
Aside from platformification, you can expect to see some verticalization in the legaltech space as well. Birds of a feather flock together and organizations want to follow in suit of their peers when it comes to the technology they use. Expect to see legaltech providers honing in on specific verticals as they find their niche market — especially in PE as high finance continues to boom.
The Rise of Legal Ops
So what do all the trends we just mentioned have in common? They create a distinct, and undeniable need for legal operations. 2021 presented corporate legal departments with the need to determine what’s a “nice-to-have” versus what’s a “need-to-have” — and a legal operations function has fallen into the latter. 2022 will solidify that, as more companies bring on legal operations in-house, or outsource it to consultancies or other white-glove services.
Whether it be to improve the efficiency of the legal department, manage process automation and onboarding, or rein in inflated legal spend — legal operations teams will continue to be an invaluable asset to organizations across the globe. And as businesses continue to be tasked to do more with less, we can expect to see more legal ops professions, departments, and solutions in 2022.
Here’s to 2022!
Legal services — both in-house and at law firms — is changing rapidly. 2020 presented many new challenges, accelerating the adoption of technology and changing the way the industry works. Innovation is disrupting the status quo, pushing legal departments and firms to take a hard look at how they operate. 2022 will double down on that trend, pushing teams to new heights of operational excellence.
2021 was a turning point – and 2022? It will solidify legal operations — and the technology behind it — as a driving force of innovation across the industry. And we are extremely excited to help drive the industry into a bright new future!