Reshaping the Rules of Legal Services: From AI-assisted Case Strategy to Litigation Finance

Legal tech isn’t just a buzzword, it’s a rapidly growing field attracting institutional investors, redefining access to justice, and reshaping law firm operations. The legal sector is currently undergoing a significant transformation with innovation technologies integrating solutions into legal workflows, from digital platforms to alternative dispute financing and litigation support.

Evolving Investment Landscape

Artificial intelligence (“AI”) and legal services are attracting substantial attention from institutional investors, reflecting confidence in legal technology’s ability to streamline complex legal processes while upholding professional standards. Simultaneously, the expansion of litigation funding globally, shows growing recognition of alternative financial models that improve access to justice.

Technology Operating Change

AI legal systems are being used to enhance human expertise rather than replace it are moving into components of daily legal practice, so that lawyers can focus on higher-value advisory work. These systems facilitate faster legal research, automate document drafting, identify case patterns, support litigation strategy and monitor regulatory compliance.

Advantages of AI-Driven Legal Platforms include:

1. Quick analysis of extensive legal document and research;
2. Automated drafting of standard legal documents;
3.  Case strategy development;
4. Compliance monitoring.

(Platforms like Casetext (now part of Thomson Reuters) and Harvey AI are examples of platforms shaping modern legal workflows).

Third Party Litigation Funding

Litigation finance can be accessed by individuals or businesses to pursue a claim without the full financial burden upfront. By covering litigation costs in exchange for a percentage of a potential successful recovery on conclusion of the case, third-party funders reduce financial barriers for claimants and increase access to justice. However, ethical considerations of litigation funding, such as transparency within organisations are also growing, with some organisations now committing to socially responsible litigation funding that balance financial return as part of ESG practices.

Technology and Investment

The development of AI platforms providing legal services and litigation funding expansion represents an evolution within legal services:

1. Technology reduces operational costs and enhances efficiency;
2. Alternative financing expands client access.

Together, they create a more adaptable and inclusive legal environment, in that:

1. There is growing confidence in legal technology;
2. Expansion of cross-border legal services;
3. Ethical standards are influencing funding decisions; and
4. There is integration of different legal service models.

Conclusion

Law firms that integrate AI while upholding professional standards are likely to gain a competitive advantage as investment continues into legal technology. However, Legal practitioners face both opportunities and challenges. Embracing new technologies can significantly improve service quality and operational efficiency for more accurate, cost-effective outcomes. However, digital adoption of tools also requires investment in skills, staff training and infrastructure.

Similarly, alternative third-party funding options can expand claimant access to justice but require careful management of third-party funder relationships. Law firms must carefully vet funding partners to ensure alignment with law firm interests, avoid conflicts of interest, and maintain transparency. This includes setting clear terms around case strategy and recovery from the outset.