Despite Technological Prowess, U.S. Legal Tech’s Global Expansion Faces Local Hurdles

As legal tech companies look beyond the US into global emerging markets, a key question comes up — will they be able to compete with local players?

The answer, as many things go, is “yes and no,” say lawyers, legal tech recruiters, and e-discovery companies.

When it comes to the expansion of US and UK-based legal tech companies into markets that are not English-speaking, former DLA Piper attorney and co-founder of contact drafting software Clausebase, Senne Mennes, likes to break it down into two areas: the sales side, and the products side.

On the sales side, Mennes thinks a homegrown legal tech company has a clear advantage over an American one.

“I don’t think any country that isn’t English-speaking is easy to break into. You will always have a disadvantage if you are not talking to prospects in their native language,” Mennes said. “Germans, for example, are very good at English on average but it is still very difficult to sell into a German market if you don’t speak German.”

What’s more, Mennes, who is based in Belgium and is bilingual, points out that even with increasingly mature artificial intelligence tools in the market that allow translation of document review and e-discovery platforms into different languages, a cultural barrier still exists during the initiation of a foreign company.

“From my own experience, selling to French people, for example, is very difficult if you don’t speak it yourself,” he said. “That’s a cultural thing. They like to exclusively buy French, so to speak. Some other cultures have less difficulty with that.”

A similar phenomenon exists in the Middle East. Jameson Legal’s Dubai consultant operations executive Bernie Sugano said business in the region is often based on family connections rather than Western sales strategies.

“[United Arab Emirates] business culture is quite unique in the sense that a lot of companies are family-run,” Sugano said. “In that way, local legal tech companies will have an advantage here because not only do they know the language, but it’s likely many of their family members will be well-connected with families selling products.”

Meanwhile, on the products side, attorneys and recruiters agree that the clear “winner,” so to speak, is the legal tech company with the most well-trained AI systems to accommodate languages, the best data sets, and the deepest pockets. Often times, those tend to be ones from highly litigious markets in English-speaking regions.

“What makes or breaks an AI-based tool is how well has the model been trained,” Mennes said. “The reality is that many tools today have an Anglo-Saxon focus, so it’s the English language you train your model on.”

To be sure, many US legal tech companies are also well funded enough to make investments to expand their tool into different languages.

For instance, the e-discovery platform Relativity accommodates the use of 173 different languages.

Discovery at Relativity, David Horrigan said cultural barriers to their expansion have been an issue back when “Queen’s English” and “Formal American English counsel” were primarily used to conduct business, but these days, technology has evolved beyond even modern translation challenges.

“There are terms even now that don’t translate across languages ​​with the advent of text communication and more informal communications,” Horrigan said. “But today, you’ve got conceptual analytics that enables you to really bite down on the data and use the language capabilities of the software to get into those colloquialisms that you might have missed in another era.”

With its growing language capabilities, Horrigan says he views Relativity as evolving into an international software.

Meanwhile, Mennes predicts that “international software” will be the product of the legal tech market further consolidating.

There seems to be a trend of platformization in the legal sector, where smaller players get bought out by larger players who then offer a more complete product offer,” Mennes said. “I do think it is inevitable that the highly fragmented legal tech market at some point consolidates into a handful of behemoths.”

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