Definition and areas of application of legal tech Legal tech (legal technology) encompasses the use of modern technologies, in particular software solutions and artificial intelligence (AI), to support or perform legal activities and legal services. Typical applications range from the automation of legal documents, intelligent contract generators and online legal advice platforms to complex AI-supported analyses of court rulings and legal matters.

Legal Services Act (RDG) and legal tech In Germany, legal tech is a particular focus of the Legal Services Act (RDG), which regulates who may offer legal services other than lawyers. This has led to an exciting legal debate: for a long time, it was unclear whether legal tech offerings, such as platforms for debt collection services for air passenger compensation, should be classified as permissible legal services. In 2019, the Federal Court of Justice (BGH) clarified this with the “Lexfox ruling”, confirming that certain debt collection services offered on a contingency basis may be permissible.

Differentiation between permissible and impermissible offers The legal distinction as to which legal tech services are permissible remains challenging. Purely technical applications that the client can use independently and without individual legal advice (e.g. automated contract reviews by AI) are generally not subject to the restrictions of the RDG. On the other hand, individual legal advice is reserved exclusively for lawyers and persons who are registered or licensed by the relevant authorities.

Data protection challenges When using legal tech solutions, data protection challenges arise in particular. If client data is processed in the cloud, for example, the professional confidentiality obligations under Section 43e of the German Federal Lawyers’ Act (BRAO) and the provisions of the General Data Protection Regulation (GDPR) must be strictly observed. This requires solutions that guarantee the confidentiality and security of data as well as being legally compliant and transparent.

Effects on the legal profession Legal tech also affects fundamental principles of the legal profession. For example, the question arises as to the extent to which law firms may implement automated processes or offer profit sharing. These issues require an adaptation of professional regulations in order to preserve the independence of lawyers on the one hand, but also to create room for innovation and technological progress on the other.

Quality assurance and liability for legal tech applications Another important aspect is quality assurance for legal tech products. As many solutions are based on algorithms and artificial intelligence, clear liability rules must be established if these solutions deliver incorrect results or incorrectly assess legal risks. Liability for errors in legal advice provided by automated systems raises legally complex questions for which final legal regulations and clarifications are still pending.

Access to justice and social significance Legal tech has the potential to significantly improve access to justice by making legal services more efficient and cost-effective. As a result, legal information and support can be made available to broader sections of the population. At the same time, it must be ensured that the quality of legal services remains guaranteed despite technical simplifications.

Future prospects and need for legal action In summary, legal tech represents a significant opportunity for legal practice, but at the same time brings with it legal challenges that must be continuously addressed by legislators and case law. The ongoing adaptation of the legal and regulatory framework will be crucial in order to make optimum use of the advantages of legal tech while at the same time preserving existing legal principles and standards.