Brian Tang on the State of Legal Innovation in Hong Kong 2019

"Chapter 3, Hong Kong"

Brian Tang

State of Legal Innovation in the Asia Pacific

Singapore Academy of Law

pp. 38-54

Introduction: Legal innovation, newlaw, lawtech, legaltech, regtech, suptech and govtech are phrases that are increasingly (and often confusingly) being used interchangeably, in deliberations and pronouncements about the confluence of emerging technologies (such as automation, artificial intelligence (“AI”), data analytics and distributed ledger technologies such as blockchain) and business models (such as outsourcing and online or software subscriptions) that is impacting the delivery of legal and regulatory services. Whether such developments normatively constitute legal innovation or legal disruption is in the eye of the beholder, and depends on who the purported beneficiary or client is: 

(a) Law firm market – the beneficiary or customer is the law firm seeking to improve its delivery of services that augments or at least maintains the profitability of partners of those legal professional services firms (often associated with the term “Legaltech”, “NewLaw” and “alternative legal service providers”).

(b) Corporate counsel and regulatory compliance market – the beneficiary or customer is the in-house lawyer and/or compliance officer who is also seeking such improvements, but at the same time often with priorities relating to internal efficiencies and cost savings, which could be detrimental to the profitability of lawyers in the first category (often associated with the term “Legaltech” and “Regtech”).

(c) Governments, regulators and the judiciary – the ultimate beneficiary or customer is the ordinary citizen and/or small and medium enterprise who seeks to benefit from easy-to-use and low-cost governmental and regulatory services and access to justice (often associated with terms “Suptech and “Govtech”). Such initiatives, as well as the emergence of certain legaltech providers, may well disintermediate some of the current service providers, similar to the way fintech is disintermediating large segments of the financial industry. In many cases, governments also have a national agenda to remain competitive in the global environment of cross-border trade that is increasingly online and where data and digital identity are key strategic components.

At its core, these discussions relate to the changing structure and composition of the legal profession and market, in circumstances where large corporate clients are increasingly unwilling to pay for the work of trainees and newly-qualified lawyers, 2 and emerging technologies are narrowing the traditional law firm pyramid by replacing or at least changing the roles played by junior lawyers. This report is a brief summary of the State of the Legal Profession and Innovation in Hong Kong.. Click here to read the full text.