While legal technology is now well established, questions arise regarding its regulatory framework. The data clearly suggest that the majority of our respondents do not think that the current legal framework in place is enough to govern legal tech. Their reasoning for what was missing from current regulatory frameworks was wide-ranging, including ethical guidance for all products developed by big tech, including data collection and AI.
Other GCs mentioned that the legal frameworks in some jurisdictions were inadequate or missing entirely. One GC said, ‘in the Philippines, there are limited regulations on legal technology. For comfort of clients, it will be good to have regulations to ensure that legal tech providers are legitimate and compliant with appropriate regulations.’ This concern, while not prevalent in responses, did indicate the major disparities within different legal frameworks. As another GC expressed their concern over the lack of regulation: ‘What current regulatory framework? If you put legal decisions in the hands of business, you reduce oversight and increase moral hazard.’
Another general trend was the feeling that ‘regulation always falls behind’ technology or that ’technology moves faster than any regulatory framework.’ Frequent responses expressed resignation that no matter how responsive to major issues, since regulatory frameworks were designed post hoc, the fact that regulation was always implemented in reaction to problems meant ‘regulatory frameworks are always late, by its very nature.’
However, some respondents felt that in their specific geographic jurisdictions or industries, some regulatory frameworks may be too onerous. For example, one GC said, ‘if anything, regulations in Europe are sometimes excessive and try to reach into technology spaces that the regulators themselves don’t fully understand.’
4% of respondents considered ethics to be a missing issue when it comes to the regulatory framework surrounding legal tech. As one GC said, ‘ethics is behaviour-related, and if the intent is not right, technology may not be able to help’. Unfortunately, a related question concerning whether the respondent’s organisation had a robust ethical policy in place regarding legal tech revealed only 39% of respondents could answer in the affirmative.
Additionally, 15% of surveyed GCs believe that there is a need for more precise and transparent policies in place. Respondents call for a more holistic approach – ‘policies appear to be segmented, whereas the use of technology crosses over all aspects of the business.’ However, the biggest issue concerning QCs seems to be concentrated in the regulatory entities not stepping up to provide universal, clear, and appropriate regulations.
Technology develops much faster than legislation, in the general opinion of the 81% of surveyed GCs who said that a regulatory framework should be formulated at the same speed as technology, catching up and pre-empting new developments. ‘Regulators should adopt policies accepting evidence produced by technology.’ Another GCs adds: ‘regulatory framework is often overengineered and focuses on technicalities, lacking common sense and emotional judgement.’