The Legal Services Board (LSB) has issued guidance to regulators, pushing them to be proactive in creating an environment that encourages lawyers and law firms to innovate to help better connect people to legal services.
Produced following an extensive period of research, consultation and stakeholder engagement, the statutory guidance sets three outcomes. Regulators should ensure that:
- Regulation enables the use of technology and innovation to support improved access to legal services and to address unmet need.
- Regulation balances the benefits and risks, and the opportunities and costs, of technology and innovation in the interests of the public and consumers.
- Regulation actively fosters a regulatory environment that is open to technology providers and innovators.
In England and Wales, a third of people facing a legal dispute do not get the timely professional help they need, and evidence shows that increased use of innovation and technology could help address this. Consumers have a greater appetite for technology than the legal profession tends to assume. Six in ten (60%) firms agree that their clients expect them to use technology to deliver legal services.
However, recent LSB research found that:
- Using technology such as videoconferencing was still relatively new for some lawyers and firms.
- Only just over half of firms are using cloud-based storage, and less than a third have a website with interactive features like a chat function.
- At the more advanced end of the scale, only 2-5% of firms use things like blockchain, tech-assisted review, or robotic process automation.
The LSB is ambitious to ensure the sector does not fall behind as even newer technologies, such as artificial intelligence (AI), are developing rapidly.
The new guidance:
- Is technology-neutral, offering flexibility and compatibility with other regulatory frameworks.
- Recognises the need to balance the benefits, risks, and costs of using technology and innovation without being unduly risk averse, which can inhibit innovation.
- Acknowledges that different legal services regulators regulate different professions, individuals, and entities and, therefore, have different approaches.
- Encourages the regulators to make progress at an appropriate pace.
Alan Kershaw, Chair of the Legal Services Board, said:
“Too many people fail to access the legal services they need, and there is a real opportunity to address this by fostering an environment that not only supports but actively encourages innovation in the market. Our guidance puts beyond doubt the LSB’s commitment to ensuring regulation does not hold back innovation whilst recognising that regulators must continue to be alert to the risks. From AI to videoconferencing, we want the sector to embrace technology and innovate to better connect people to legal services.
We now expect the regulators to embrace our ambition and move with appropriate pace to understand the public’s needs and develop frameworks that balance the benefits and risks in the interest of people who need legal services.”
The LSB will monitor the regulators’ progress against the guidance through its annual regulatory performance assessment.
The LSB is also preparing a response to a government request to outline its strategic approach to AI.
