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4 www.canadianlawyermag.com UPFRONT NEWS ANALYSIS CANADA'S LEGAL technology sector has been steadily gaining traction, showcasing a unique capacity to innovate and expand despite its relatively small size. The market's development is shaped by a combination of strategic positioning, regulatory challenges, and the gradual adoption of advanced tech- nologies like AI. lined up well with the business process that everyone from solos to large firms may find a way to slide themselves into and appreciate the change," he says. One of the factors contributing to Canada's success in legal tech is its ability to use its domestic market as a testing ground before expanding into larger markets like the United a litigator who thought, 'We can do this better,'" says Lachance. Al Hounsell, director of strategic innovation and legal design at Norton Rose Fulbright Canada LLP, provides a statistical perspective on Canada's impact in the global legal tech market. He notes that while Canada's software market is only 6 percent of the size of the US market, the Canadian legal tech market represents 25 percent of the US market. "These numbers are inescapable. Canada punches above its weight in this category," Hounsell says. He attributes this strength to the robust support from academic institutions and legal tech incubators such as the Legal Innovation Zone (LIZ) at Toronto Metropolitan University. These incubators play a critical role in fostering innovation and providing startups with the resources they need to develop and refine their products. Hounsell also highlights the slower pace of technology adoption within the Canadian legal market, which, combined with the supportive environment, allows startups more time to perfect their solutions before scaling up. Generative AI has emerged as a key driver of disruption in the legal tech sector, particularly in Canada. Hounsell says AI is "Breakthrough products aren't breakthroughs because of technology. They're breakthrough because they've lined up well with the business process" Colin Lachance, PGYA Consulting Canadian legal tech shines Experts say Canada is uniquely situated to punch above its weight in legal tech, but innovators still face regulatory hurdles that limit global growth, writes Tim Wilbur States. Lachance says that this strategic approach allows Canadian startups to refine their offerings and compete effectively against more mature markets, such as the UK. Lachance cites the example of a company like Goodfact, a tool that helps litigators build chronologies that grew through community support and word of mouth. "It wasn't launched as an AI company. It was launched from the perspective of Colin Lachance, principal at PGYA Consulting, says legal tech is still the "poor cousin" of the broader technology industry. According to Lachance, the success of legal tech products often hinges not on the novelty of the technology itself but on how well it integrates with existing business processes. " B r e a k t h r o u g h p r o d u c t s a r e n' t breakthroughs because of technology. They're breakthrough because they've