The Big Read

How Canada’s law firms are embracing innovation—on their own terms

Eric Lee for The Logic

On the sixth floor of Google’s former downtown Toronto office, Chris Bentley spent nine months developing a new way for aspiring lawyers to get their licence in Ontario. The endeavour, called the Law Practice Program, would train recent grads in a virtual law firm that simulated meetings with partners and clients online. Legal professionals considered it a major reform for the industry that had scarcely changed since Bentley, a former attorney general of Ontario, graduated from law school in 1979.

But while working alongside startups from Ryerson’s DMZ incubator in the Google offices, Bentley had an urge to find more ways to innovate around law. “I asked the [DMZ] executive director one day, ‘How many of these companies—and there were 80 at the time—are doing something in law?’ And she said none.” Bentley thought that was unacceptable, so in 2015, he co-founded the Legal Innovation Zone (LIZ) at Ryerson, Canada’s first legal tech incubator.

The legal sector has so far held off the barrage of disruption once expected to upend the industry. Law firms—run and regulated by senior partners, for whom the old system has worked—have had little incentive to change. But there are emerging signs that the incumbents’ advantage may not be secure. AI-driven software is already predicting outcomes of cases and taking over time-consuming tasks like document review, once the work of articling students and associates. In 2018, global funding in law tech reached more than US$825 million, up from US$305 million the year before, according to market monitor Crunchbase, as investors rush to get in on the flurry of startup activity in the space. And, jurisdictions in Canada and the U.S. are considering new regulations to let non-lawyers take on certain aspects of the job, like family law and small claims.

According to a 2018 report from the Law Society of British Columbia, only 15 per cent of people facing legal challenges consult a lawyer, and upwards of 70 per cent of them don’t seek any help at all. Cost is considered a major barrier to access, with “everyday legal problems” costing Canadians $6,100 on average per case, according to a 2018 report from the Canadian Forum on Civil Justice.

There’s a new generation of lawyers, however, joining developers to streamline the monotony of legal work to make it more accessible and less expensive.

“There is a kind of false confidence associated with our prosperity,” says Mark Tamminga, a partner at Gowling WLG’s Canadian branch and the law firm’s leader of innovation initiatives, tasked with keeping disruptive startups at bay.

For the most part, it’s business as usual for legacy law firms in Canada, according to industry analysts and partners at large firms who spoke to The Logic. But Tamminga cautions against complacency. “That doesn’t get us off the hook. In fact, it scares me,” he says. “I live with the pervasive sense of foreboding, and mainly because there are better ways to do many of the things law firms do.”

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