Rebound: 10 Growth Areas In Our New Perimeter Prosperity

Rebound: 10 Growth Areas In Our New Perimeter Prosperity

Rebound: 10 Growth Areas In Our New Perimeter Prosperity 796 436 Raymond Blijd
Read time: 5 min.

Investments in contract software dominated last week yet its ranked 13th overall for 2020. Here’s a data-laden breakdown of why and where we see prosperity.

TLDR: For the legal industry we found 10 areas with increased activity based on traffic and traction. And it’s all about finance and freedom.

Is there Growth?

The world suffered mental, physical, and economic shock. One way the legal industry can administer some relief is by nurturing society back to financial health and ensuring we keep our civil liberties. Last March we discussed the impending fight for ‘freedom’ versus contact tracing. Here we’ll explore the stories and stats that signal growth. So is there growth? Yes, according to Clio’s Covid-19 Survey “..14% report a significant increase in the number of people reaching out for legal help..”

Where is the Growth?

This triggered us to delve into the data and find the evidence. We used two sources: web traffic and fresh capital. The first was inspired by Mary Meekers exploration of growth sectors during the crisis such as health, and e-sports. We employed a similar approach and added venture capital to the mix to find the areas that have traction. Traction was exposed by generating a 100% stacked bar chart with investments per sector from 2018 to date. This revealed which sectors received more fresh capital in 2020 relative to previous years. This approach automatically prioritizes the new sectors over popular ones like Contracts. See how that affects the rankings in the bar charts below.

We found 10 areas and since these reinforce each other, we paired them as followed:

  1. Divorce & Estate;
  2. Claims & Litigation Funding;
  3. Fraud & Identity;
  4. Supply Chain & Logistics Risk;
  5. Accounting & Spend.

Divorce & Estate: One of the first reports to emerge from China, when their shelter-in-place took effect, was the spike in divorce filings. Another sad side effect was the increase in domestic violence in many countries. Notable was Chicago partnering with Uber and Lift to provide victims with an emergency code to escape abuse. This was another fine example of how CivicTech has the power to heal. Likewise, final will and testament services shot up during the crisis. In Google trends, the search phrase “make a will online” peaked 11 times by more than 25% in the last 90 days. This sent professionals scrambling to download a solution and E-Notary downloads went up 192%. You’ll find E-Notary downloads in spot 7 on the G2 chart below.

Claims & Litigation Funding: We recently discussed claims as the fourth growth catalyst. Now this will multiply with claims for unemployment or loss of income. In the G7 country‚Äôs, a total of about 41.6 million people filed claims for assistance. For businesses, it is estimated that the G20 country’s total stimulus packaged now stands at $6.3 trillion. Within this massive funnel of capital, the legal industry is the linchpin that draft and assess claims. Where there is volume, there is tech. Perhaps that is why we find funding of claims companies in the Legal & Tax Trends and RiskTech Trends in the number one and number four spot. And when the stakes are high and money is tight, that’s when Litigation funders step in and clean up on claims.

Fraud & Identity: This one is pretty straight forward: more claims more fraud. It took a single tweet to get a $69 million government contract. Defrauding government is up 93% according to one study. Fraud is closely linked to identity. That’s why AI & Analytics companies, like Resistant.ai, have seen increased investor interest. Governance, Risk and Compliance (GRC – $286M), Identity ($267M), Know Your Customer (KYC-$190M), Biometrics ($152M), and Fraud Detection ($58M) all got love from VC’s in 2020. Luckily, the Privacy sector received the most at $549M. This is the sector conceived by the legal industry as a counterweight. See them all in the RiskTech 2020 Investment donut chart in the gallery below.

Supply Chain & Logistics Risk: In reopening the economy one obvious obstacle has been companies having a shortage of supplies. When it became apparent that testing for Covid-19 was pivotal, we all became reluctant experts (video) on its supply chain. From the test machine, liquids all the way to the specific length of the cotton swaps. However, it also highlighted the importance of proper risk assessment and service level agreements with vital suppliers. Investment for Supply Chain & Logistics Risk in 2020 grew 180% from $98 million to $176 million (Chart: RiskTech 2020 Investment).

Accounting & Spend: Now why was contract management suddenly so popular? E-Signature software downloads shot up +511% during corona according to the TrustRadius chart. Companies want to get their spending under control and to seal deals airtight. Most lawyers may have felt rejuvenated by the funding reports of Contract Lifecycle Management (CLM) providers. However, this was mostly a win for accountants. In Breach: New Players in Contract Management, we explored the different deployments of contract software. Contracts software used by the legal professionals for drafting and reviewing ranked 13th. While accounting ranked number one and CLM with E-Signatures ranked 7th in RiskTech Trends. In short, companies are employing CLM and E-Signatures to get a grip on finances and not necessarily to get more legal support.

Encore

Copyrights: streaming is set to become the lifeblood for entertainment powerhouses like Disney and tech companies like Apple. They will, therefore, step up efforts to protect their intellectual property. Case in point: Netflix sent out half a million take-down notices in one week (!). That would be impossible if they employed lawyers to draft each one.

M&A: On the one hand, many mergers are on the verge of being scrapped due to the pandemic. Some have even gone to court to get a reprieve from a judge. At the other end, cash-rich companies, like Facebook, will go bargain hunting for promising companies on the brink of bankruptcy. Either way, lawyers will get a bump.

Automation: The corona crisis also accelerated the replacement of humans with robots to lower costs. While generating the charts for this analysis we kept seeing Robot Process Automation (RPA) popping up near the top. It’s number two in Legal and three in RiskTech.

In closing, we all will have to accept and adapt to this new reality. One positive I enjoy is the extra space, especially living in a crowded place. Likewise, because of this pause, we’re going to see new opportunities. We just need to be ready when they appear.

Btw, need more tactics? Check the Recession Survival Guide to see how you can outlast the downturn and extend your runway.

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