HK LawTech Fund is open for applications today. From April 28 to June 26, HK law firms and barristers’ chambers with 5 or fewer practitioners may apply for reimbursement of up to HK$50,000 for procuring and upgrading approved IT systems and training. Further details on the Law Society and Bar Association websites.
The legal sector in Hong Kong faces a cross-road for technological innovation as most court services are shut down due to public health considerations, and the backlog of legal proceedings continues to grow. Yet, technologies enabling remote legal work are truly validated in recent months as many lawyers have begun adapting to working from home and relying heavily on online collaboration tools. While necessity is the mother of invention, the legal sector is well-known for its technological conservatism. Could COVID-19 challenges catalyze innovation in the law? This article looks at the underlying factors.
According to the Department of Justice’s website, “[a]lmost 18 per cent of the annual caseload of the courts at all levels have been affected in the first two months of the General Adjourned Period since January 29. The Judiciary has earlier started using video-conferencing facilities for remote hearings on suitable civil cases at the High Court.” Since April 1, the Judiciary has been providing the e-Lodgement Platform for online submissions of hearing bundles and other court documents at the District Court, High Court, and Family Court. This facility will apply to the Lands Tribunal on April 15. The current General Adjourned Period will end on May 3.
On April 8, the HKSAR Administration unveiled the second round of the Anti-epidemic Fund. Among other initiatives, it pegs about HK$40 million (US$5.1 million) for a new LawTech Fund to help legal practices with five practitioners or less procure IT solutions and relevant training. Each eligible law firm or barristers’ chamber could claim up to HK$50,000 (US$6,400) in technology reimbursements. The Administration estimated that around 700 such practices would benefit (around 60% of law firms and 50% of chambers). HK$70 million (US$9 million) is also pegged to a new COVID-19 Online Dispute Resolution Scheme to support online resolution of disputes connected with the pandemic.
Providing subsidies targeting technology needs, among other key concerns, in the Anti-epidemic Fund should be welcomed. Firstly, adoption of better tools and technology-enabled processes are essential parts of planning for business continuity during the global health crisis and the long road to recovery thereafter. Secondly, as small practices are the dominant practice, raising the bar of their technology competency would impact innovation standards for barristers and solicitors. Thirdly, utilized proficiently, automation and other advance technologies could close competitive gaps between smaller and larger practices, improving bottom lines long-term. While meeting rent and staff payments are top-of-mind for businesses today, technology needs should not be forgotten.
As the LawTech Fund has opened for applications on April 28, 2020, what are now the key questions to look at?
- What might the uptake from small practices look like? Small practices could be more nimble than large practices in adopting new technologies. Decisions could be made with fewer stakeholders and without observance of cumbersome internal policies usually established in large organizations. However, small practices do not typically have professionals providing dedicated IT support. And legacy IT issues plague practices, large and small. Ultimately, small practices are more likely to spend on IT solutions that are easy to set up and use “out-of-the-box,” and engage vendors that would provide managed services.
- What kind of digital transformation could be achieved? HK$50,000 would represent 0.5% of a firm’s revenue of HK$10 million (US$1.3 million). Generally, IT budgets of small professional services firms in Hong Kong allocate about 1-2% of revenue. By comparison, 4-6% is budgeted by their US and Australian counterparts. There is no one-size-fits-all solution. And, depending on the organization and the solution, it may or may not make sense to buy on subscription plans. Regardless, IT spending could only be put to good use if the buyer is prepared to commit staff hours and/or engage consultants to evaluate its business needs, research solutions on the market, implement them, and arrange user training.
- How should lawyers allocate their budgets for optimal effect? What should be procured and outsourced? IT spending should be scoped out and prioritized systematically and strategically. The overall quality of a video conference, for example, does not only depend on particular hardware and software. Ensuring technical compatibility between participants and the quality and speed of the Internet connection are equally important. Project-based expenses, including costs of hiring specific equipment, might be passed on to end clients as disbursements. Technology evolves quickly, and experts should be consulted on the latest cybersecurity, cloud, and other topical issues.
In addition to the government and judicial initiatives highlighted, the Court Proceedings (Electronic Technology) Bill, which passed the First Reading stage at the Legislative Council in January, would provide a legislative framework for a broader range of electronic court filing and other services. Legal professionals are key players in the knowledge economy, and they could assume a greater role in the digital economy. Firms and chambers should seize these opportunities to innovate and strengthen their competitive edges. Laying the foundation for more technology-enabled legal services, improving access to the public long-term –let 2020 be the year of kickoff!
As always, the opinions expressed and any mistakes made are my own and do not represent any organization or group that I am affiliated with.