Investors don’t take women in legal tech seriously
Women are poorly represented in legal tech due to “woeful” funding, investors bias, and a lack of female voices in the decision-making process, according to a female tech founder.
Speaking to Lawyers Weekly ahead of the inaugural Women in Law Forum 2022, chief executive and founder of Legally Yours and committee chair of the Women of Australian Legal Technology Association (WALTA) Karen Finch said that while she is optimistic about female representation in Australia’s legal tech industry, further action is required to provide women with more opportunities.
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Ms Finch and a panel of speakers will discuss the importance of more female representation in legal tech at the Women in Law Forum in November, along with how the industry could increase its visibility and why this is beneficial for the legal profession.
Indeed, a report by ALTA released last year revealed that 53 per cent of lawyers in Australia are women, yet they comprise only 21 per cent of legal tech founders.
The Diversity in Legal Tech – It’s Time for Action report also found that only 21 per cent of technology professionals are women, and 29 per cent of funded companies have at least one female founder.
The gender gap in funding is particularly stark, with only 19 per cent of legal tech companies with a female founder having raised funds, compared to 50 per cent of companies with a male-only founder.
Globally, 31 per cent of legal tech companies with a female founder raised funds, compared to 43 per cent of companies with a male-only founder.
“The funding is quite woeful. We’re hugely unrepresented. It just doesn’t make its way down to us for a number of reasons,” Ms Finch said.
“Some might say it’s because we don’t fit the mould of what a tech start-up founder should be. Others say we don’t have the right connections because a lot of us haven’t gone to the right schools or we haven’t hung out in the right networks to access that funding.”
Ms Finch called on funding providers (including venture capital, government grants, and private equity firms) to address this shortfall.
Women also face conscious and unconscious bias from investors who do not take their ideas, innovations, and solutions seriously, she observed.
Visibility is key to closing gender gap
Addressing the funding gap between the genders requires increasing the visibility of women in legal tech, Ms Finch said.
Interviews with law firm leaders, general counsel, and venture capitalists about their views on female representation in legal tech for the ALTA report exposed the lack of visibility, with most citing few interactions and limited knowledge of participants.
While some respondents said they had seen “precisely” two women in leading roles in legal tech, others said they struggled to name three female founders in the industry.
“These insights enabled us to understand that visibility and voice are super important to get funding because if you don’t have a voice in the market, you’re not even going to get to that stage,” Ms Finch argued.
The ALTA report suggested that increasing the number of female role models, building and promoting successful female founders across the industry, and providing recognition through awards to inspire other women could boost visibility.
“One of my favourite sayings that I share with a lot of early-stage women in legal tech is that you can’t be what you can’t see,” Ms Finch said.
“Seeing examples of women who have created these solutions, sharing stories about how they did it, and growing that support network are incredibly important. When you form the right community, you’re a part of a bigger voice.”
Amplifying female voices in boardrooms and at the executive level and arming them with the framework and language to initiate discussions in their firms or in-house counsel teams could give them a seat at the table and the power to make decisions on the purchasing and implementation of legal tech solutions, Ms Finch proposed.
“We need to use language to call out conscious and unconscious biases and push law firms and companies to proactively find diverse voices to sit at the table,” Ms Finch said.
“Global reports are saying that diverse law firms are more profitable because they’re having conversations in the room that they’ve never had before. Women need to be in the mix of these technology decisions because we bring a different flavour to legal tech.”
To hear more from Karen Finch on how more women could become involved in legal tech and the barriers impeding their progress, come along to the Women in Law Forum 2022 on Thursday, 24 November, at Grand Hyatt, Melbourne.