What if tedious and time-consuming tasks done by inhouse counselors could be automated? That is the promise of legal tech. Even though legal tech takes over some work, it doesn’t mean lawyers should fear for their jobs. On the contrary, says Marcus M. Schmitt, General Manager of ECLA. ‘It frees up time for more complex and detailed cases, for which they otherwise would have too little time.’
ECLA functions as an association advocating the rights of inhouse lawyers, also providing content, education and networking opportunities. One of the topics that ECLA is informing its members about is legal tech, an area of expertise which has become more relevant with inhouse counselors over the last decade.
The definition of legal tech
Legal tech and automation could be defined as ‘utilising computer-based technology to enable legal output’, according to Schmitt. His colleague Marten Männis, Legal Project Manager, adds that it could also be described as software designed to assist and replace legal processes specifically. It’s quite a broad term, admits Schmitt, but what is essential in this definition is ‘legal processes’. ‘It does not involve software that is generally used in an office environment, such as Word or Excel, which would fall under the umbrella of office tech.’
To clarify, Schmitt gives an example: ‘Companies that do a lot of sales transactions, that include many terms and conditions documents for which the legal department has to generate unique contracts, would benefit from legal automation. They could set up a process in which for a new sales contract, the business can simply give the input to the variables within the contract, such as the volume, duration, applicable third parties and so on. Based this input, a contract can automatically be generated.’
Legal tech is based on input
Legal tech is not necessarily artificial intelligence. ‘It might be a bold statement, but I do believe AI in its technical meaning doesn’t exist in the legal sphere, yet,’ says Schmitt. ‘Legal technology is based on input and yes, the more input is given, the more accurate the outcome can be. But that is not AI, that’s Big Data. Even the most complex solutions are based on available information in the database. You can give the probability within the framework, what the outcome of, for example, litigation could be. But -at least with today’s solutions- you cannot predict what legislation will look like definitively.’
Is Schmitt not afraid jobs will disappear when processes for setting up contracts, for example, are automated? A legitimate fear that both young and older lawyers experience. ‘No, the processes that are automated are repetitive jobs that are easy and straightforward. Also, lawyers are not trained and hired to do the easy tasks. Thanks to automation, lawyers are freed up to do more complex and detailed cases, for which they otherwise have little time.’
The black void that is the legal department
On top of the benefit of freeing up lawyers for more complex tasks, legal tech can contribute to a better appropriation of the legal departments’ budget. Männis: ‘Legal departments are often seen as a black void in terms of budgeting. It is seen as the necessary cost of doing business and inhouse counselors are expected to keep the costs down. Thus, any additional investment within the department is met with increased scrutiny. Even though the initial costs are increased with introducing new solutions, costs will go down in the mid- and long-term as processes that otherwise take up a lot of time, will now be automated.’
However, to get these benefits, it’s important not to rush into technology. The first step is to see which processes can be simplified in the first place. Schmitt: ‘When people started looking into legal tech, they soon discovered that they cannot just blindly choose a tech solution and go with that, expecting immediate benefits and lower costs. Departments need to understand their digital strategies first and foremost. They need to understand what are their daily processes that could be automated? What are the repetitive tasks most prominently done? What would the benefits to automating a specific process bring?’
The second step: choosing the software
If you find that some processes would benefit from either simplification or automation, you can take the second step: choosing the software to revise the selected processes. ‘Of course, it should be up to the legal department to make the final decision, but these decisions should be made together with the IT-department, advises Schmitt. ‘Legal decides what functionality is important, but IT knows what tools match the requirements.’
Another requirement IT can look at is integration with other systems. ‘It’s a worst-case scenario to have multiple different tools in use that do not synchronize either with each other or the core business system. This in turn would not only hinder the efficiency within the department, both internally and externally, but also discourage lawyers from seriously considering legal tech as a viable solution.’
Build a culture around legal tech
The third step is sometimes overlooked, but crucial for any successful project: getting people on board and setting the right mindset. ‘When we talk to inhouse counselors, they sometimes mention that they have legal tech. They refer to an e-mail they had two years ago, but as it turns out: nobody is working with the tool, no data is fed into the system and sometimes the intended users don’t even have a clue the tool exists’, says Schmitt. ‘Convincing a person to change their methodology with a process that they have done for years is an uphill climb. However, without the people actually buying in, the whole project is dead on arrival.’
‘Build the culture’, says Schmitt, which means getting colleagues on board for the project so that they will work with the tools once implemented. ‘Tell your counselors and business users, for example, what processes will be automated and how they can work with the tool. Let them know what benefits they will gain from working with the tool and how it will support their work instead of making them obsolete.’
Even though law is considered a conservative practice, Schmitt believes legal tech will take flight in the coming years. Männis adds: ‘We are in the very early stages. The term legal tech might already be around for twenty years, it has only become more serious in the last decade. Each industry has their laggards and leaders, but in general more tools are becoming available, and interest within the legal community is rising each year. It is going to be an interesting journey.’
See also this webinar on legal tech
and download this whitepaper on legal tech
