The need for technological innovation has been brought into sharp focus during the past 18 months. Companies that were ready to adopt new ways of working, from virtual meeting facilities to electronic signature technology, were the ones able to continue operating without lag-time and even thrive in the new world of remote working.
Overnight, as the manual systems that many relied on were forced to shut down, the benefits of technology were highlighted more clearly than ever before. Very quickly, attitudes altered as even ardent technology sceptics found it hard not to question existing human-led processes as it became clear many weren’t fit for purpose.
One obvious example is property searches. As soon as working from home and self-isolation became mandatory, the impracticality of a system of physical records managed by human custodians was immediately obvious, with some property searches unavailable or subject to several weeks’ delay.
Big data and AI
Two significant trends will define technological development in the commercial real estate sector over the coming decade: data management and AI. These trends are no longer so much about revolution than the maturation of existing technologies.
How this data is managed will be key to this evolution. The pandemic has proven the redundancy of data gatekeepers. As more councils digitise their property search information, the industry has seen the benefits of moving this data to a more open-source model. Tools such as Search Acumen’s ForeSite platform, which brings together 75 sets of essential data, are facilitating this transition, providing commercial real estate lawyers with a way to instantaneously access a plethora of data and significantly streamline essential due diligence processes.
The pace of the industry’s development in managing big data is tied to the migration of data to the cloud, with more law firms set to opt for cloud-based solutions to increase their storage capacities.
AI is the other technology that will mature at speed. In the not-too-distant future, its use will become common, providing a way for firms to dynamically sort data and provide real-time updates. Already AI tools cut weeks of initial document analysis down to hours, allowing firms to immediately identify and report on critical issues, rather than this being dependent on lawyers manually sorting through paperwork.
Similarly, proptech innovators such as Search Acumen are designing AI tools to provide real-time property information to inform commercial transactions. Search Acumen’s AI tool automatically extracts data from key documents and enables commercial real estate lawyers to provide bespoke reports based on their clients’ requirements.
The pandemic has proven the redundancy of data gatekeepers. As more councils digitise their property search information, the industry has seen the benefits of moving this data to a more open-source model
The company is also utilising AI tools to drive efficiencies in its own customer service processes, especially the portfolio management services it provides to commercial real estate firms.
While tech adoption is on the rise, it is often siloed. Within firms, different platforms don’t always speak to each other effectively and there isn’t a solution that joins up digital platforms across the legal, finance and agency sectors. There are next-level efficiencies to be attained when platforms become better able to share data securely. Pre-pandemic, momentum was building in this area, with various cross-sector initiatives aiming to bridge this gap. Search Acumen regularly consults with clients in the development of key services, such as REI, and also with third parties including HighQ to ensure secure data exchange.
This kind of collaboration will be crucial, as will a willingness to collaborate directly with clients. Encouragingly, many more open conversations are being held now between clients and consultants about how to create efficiencies through innovation. These kinds of shared insights are vital if firms want to understand their clients and tailor services to their needs.
Creating a digital-first mindset in a long-established sector that has always utilised paper-based deals isn’t without its challenges. However, there is a growing focus on digital skills in response to client demand, with many law firms establishing technology development teams and some even offering innovation trainee positions as they look to instil these principles within future generations of business leaders.
Another important task is combatting concerns that technological efficiency serves to cannibalise profits. Most progressive industry leaders understand that customer satisfaction drives sustainable, long-term revenue growth and are driving efficiencies to achieve this. While it might be a longer-term ambition, moving away from hourly rates, which stifle innovation, needs to be a talking point for the legal sector.
Better integration of big data across the property sector also presents issues around data security. Changes to PDFs, which are recorded through human processes and audit trails, are much easier to spot than errors in open-source digital datasets to which multiple parties have access. Confidence in the security of digital data will undoubtedly increase as firms respond to their clients’ demands for it and become more adept at handling and interpreting it with the help of AI.
The rapid adoption of tools such as DocuSign over the past year has shown the sector’s appetite for more efficient, digital working practices.
If these challenges are met, transactions could look markedly different relatively quickly. We could see a world where sellers can provide an upfront digital data pack, which is insurance-backed and based on AI-driven insights. Beyond that, the development of blockchain provides a possible model for a fully digitised, secure property history.
This isn’t to say all future deals will be managed by robots. The future of the sector can be explained by a simple algorithm: Lawyer + AI + secure, dynamic data = 100% efficiency. While the role of professionals will inevitably change, human insight will never be replaced – not least because customers don’t want to lose it. Clients want their advisers to focus on the tasks to which they can add the most value; not billing for project management and routine administration.
Real estate lawyers themselves don’t see a dystopian future. Instead, they are excited by the prospect of change, with increased adoption of technology set to free up professionals to focus on imparting their insight and expertise, continue the process of innovation and drive positive change in customer experience.
A final achievement that will emerge as technologies like AI come of age will be a greater ability to adapt to market trends. Occupiers are increasingly looking for flexible space fast. To facilitate these deals, the sector must be able to update property data almost instantaneously to manage the turnaround. AI provides the logical solution here.
Based on the current direction of travel, the future is set to bring rapid refinement in how we apply innovative technologies. As technology matures, this could be a route to improving customer experience; providing insightful, bespoke data at the touch of a button, and offering greater pricing choices. It will enable the real estate sector to better respond to a rapidly evolving market for the benefit of all participants, and those who overlook the advantages of data and digitalisation will be left behind. After all, who wants to dig through a paper mountain that technology can burn through?
About Search Acumen
Search Acumen is a property data insight and technology provider to UK conveyancers, solicitors and commercial property lawyers. It has become the data supplier of choice for many leading residential and commercial firms and is dedicated to enhancing and accelerating the practice of property law by delivering organised and prioritised property data. Its success rests on working with data owners to understand, shape and deliver datasets that are essential and insightful for the next generation of property lawyers.
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AI and big data promise a revolution for real estate