There is no doubt that the use of technology, data and online services is transforming the real estate industry on a global scale. SearchFlow recently hosted a virtual roundtable that brought together experts from the real estate industry to discuss this topic and the trends we may see in 2021, with a view to the influence of technology in accelerating transactions in residential markets. and commercial.
Panelists included Paul Tostevin, Director of the Global Research Team at Savills, Geraldine Pigot, Special Advisor – Real Estate at Covington & Burling LLP; Senior Real Estate Lawyer and Consultant Brian Kennedy; and Adam Groom, SearchFlow’s product manager.
Here, Property Industry Eye reports on some of the talking points raised during the session:
Q: What were the main results of the real estate sector in 2020?
Paul Tostevin: â2020 has been characterized by one big thing, Covid-19, and that has had huge implications from a real estate perspective. Of course, the world was already going through many upheavals before the pandemic, but what it did was accelerate many pre-existing trends; the most notable is related to agile working and the broader shift to online retail.
One of the biggest resulting challenges is the associated economic downturn; Global GDP fell 3.9% in 2020, with the UK and the eurozone particularly hard hit, according to figures from Oxford Economics.
Adam married: âThere is no doubt that 2020 has changed the real estate market. Technological innovation and adaptation are transforming land and real estate transactions on a global scale. Now more than ever, it is important to take the time to reflect and plan for what lies ahead as digitalization and electronic integration grows; we all agree that by doing so, we can work together to accelerate transactions, improve workflows, reduce business costs and maximize efficiency at all levels. “
Q: Where does that leave global real estate markets, including investment markets?
Paul Tostevin: âThis wider uncertainty, coupled with global travel restrictions, has resulted in investment volumes falling by about a third from the peak in 2019. However, not all sectors felt the same way , if we look at the global share of investment by asset class in 2019 compared to 2020. One thing to note is that offices were still the most important sector in 2020 – ahead of residential, industrial , commerce and hotels – despite the shift to work from home. However, the share fell to the detriment of the industrial (including logistics) and residential (including rental construction, student housing) sectors, which rose to 21% and 28% respectively.
Q: What findings do you see in terms of the adoption of LegalTech in the real estate transaction process?
Brian Kennedy: Many key topics are on the radar of law firms: AI, collaboration tools, earlier access to real estate data, big data and data analysis, contact lifecycle management solutions, code-free / low legal platforms code and blockchain. However, having earlier access to property data and accelerated information is fundamental. Lawyers are used to a world where collecting property information takes a lot of time and effort, such as research.
The underlying data sets that fuel this research exist in the present; be it planning, environment or highways. Increasingly, providers like SearchFlow are looking to harness this data and make it available earlier in the due diligence process; develop products that give lawyers and clients earlier insight into site risks or potential complications.
Q: Do you think technology will redefine the essence of legal solutions?
Brian Kennedy: Legal solutions have invariably meant a piece of paper (whether delivered electronically or physically) – an advisory note or a series of documents. But innovation is about adopting new approaches to solve problems and rethink ways of doing things. Suppose I have a client who urgently wants the details of a lease portfolio. Will the future legal solution look like a client scrolling through a report in MS Word, or will it look like an easy-to-use visual interface, where the client can access key information with the click of a button?
I may have a client who wants to venture into serviced office provision and needs some advice – will the legal solution of the future look like a set of precedents and guidance notes, or s Will it be an application, where client staff can easily generate documents themselves, using a questionnaire-like interface.
Some of these solutions are already a reality for some law firms and their clients and it really illustrates the difference in how legal services or solutions may differ in the future.
Q: Do you see a time when a greater degree of AI will be used in legal practice?
Geraldine Pigot: I participated in a training trial of an AI machine learning tool to review leases in English. Even after bringing the lease type back to professional leases and then to shopping centers, only commercial leases and system training on about a hundred of them were still only about, I believe, 60% accurate at the time of writing. test. The full trial was to cover 500 leases. The formation of the system involved scanning the documents and having a legal professional manually label the provisions – for example, rent review clauses, contract terms, etc., so it was quite a lengthy process. The idea of ââcourse was that once trained, the AI ââwould then be ready to deploy. However, given that we initially had to subdivide the leases by type, it seems to me that the usefulness of the tool becomes more marginal as it would not necessarily recognize a different type of lease without some new training.
Looking at some of the data from other trials, it appears that the average level of accuracy for human examination is around 80%. One of the surveys based on non-disclosure agreements (NDAs) gave AI an average accuracy of 94% and human lawyers 85%. However, I would say NDAs are simpler and more formal than maybe a lease in England and Wales, so I don’t think lawyers will be replaced by AI anytime soon!
That said, it can be useful to extract large volumes of data using AI, as you can then present those results early to the customer, in a more compact and manageable form, which can then empower customers. better understand the data in advance and make pre-contract decisions based on it. So I foresee a greater degree of AI yes, but only in situations that are worth it. There are also trust and accountability issues when it comes to lawyers presenting clients with AI-powered due diligence, which need to be addressed from the start.
Q: Do you think legal services will undergo a âreinventionâ brought about by the adoption of technology?
Brian Kennedy: The future of law will increasingly use multidisciplinary approaches to reinvent the delivery of legal services, with teams of lawyers, technologists, legal design experts, change management specialists and other disciplines. working together to reinvent legal solutions.
Then there is the challenge often described as the âproductization of lawâ. How to transform ad hoc legal services provided to individual clients into legal products that can be built once but sold to several – and ideally use those products to sell or drive demand for more valuable or strategic legal advice.
Third, technological developments will certainly open the door to entirely new legal solutions. The industry has so far focused on digitizing and automating existing legal processes, but I think that will change. Big data and data analytics will provide insights and capabilities to facilitate new products and services that are unlike any existing legal offering; it will be interesting to see how things play out.
Adam Married: âSpeed ââand a continuous flow of data are increasingly important to real estate lawyers.
When we talk to customers, the data we expose needs to improve their workflows, and automation needs to be efficient. Businesses are looking to cut costs end-to-end, that’s what real estate departments across the country are telling us. Today, as part of Landmark, we have access to the largest data repository in the industry. This world of Big Data that Brian referred to is about using large, reliable data sets and new techniques to bring out information, in an integrated way and in real time; make it available in the right place at the right time. Only then can we increase efficiency and add value to the market. Real estate data is our cornerstone, so we are looking at machine learning and AI to generate insight. “
Q: How has technology supported you during the pandemic?
Geraldine Pigot: âI certainly believe that if I hadn’t had the land registration portal, automated documents and automated land registration forms while working from home, it would have made my life much more difficult. These are trends that have been going on for some time, technology is used more and more and the pandemic has accelerated this and technologies like these have made it possible to make our work from home.
âTechnology, well used, frees lawyers for more interesting and complex work and so perhaps more administrative type tasks (ie sorting and synthesizing data) can move on. automation, which in my opinion is a good thing. “
To access a copy of the full roundtable session, Click here.