Automated law—law firms developing technology ‘in-house’

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Julian Sayarer speaks to experts about the pros and cons of developing LawTech in-house.  The spread of technology into modern life and business has brought with it a vocabulary that can seem like it is used more frequently than it is understood. Each equipped with their own lustre, ideas such as ‘disrupt’ and ‘innovate’, or methods such as ‘fail-fast’, have become commonplace, now dropped with an eager noise for technological readiness that can easily outstrip the actual commitment.

In-house technology is just one concept that seems to hold such sway, and the notion of bespoke technology design, developed at close proximity to those who need it, has  an obvious appeal. There are a range of logical answers for why technology development is brought in-house; solutions tailored to specific needs, hidden from the eyes of potential competitors, suited to the fine-tuning of a firm’s systems so that it operates with utmost efficiency. There was something very complete-sounding about the statement from artificial intelligence due-diligence company, Luminance, when announcing that their software ‘has been trained to think like a lawyer’.

With firms likely to remain guarded on the minutiae of their in-house development, there will be some guesswork in establishing the real ramifications of what that sort of ‘training’ actually consists of. From a purely technological perspective there’s a surprisingly strong argument against in-house development altogether, and certainly against the idea of it as a panacea for the sometimes slow pace of development in LawTech.

Substance above style

Challenging this received wisdom of in-house as an unalloyed good, it is not hard to find a range of voices from the Tech world. Jimmy Vestbirk is the founder of LawTech community, Legal Geek, which has convened hackathons of coders and conferences of experts, brought together to shed light on how law and technology can best meld.

It is interesting to see law firms reacting to change by developing their own software,' says Vestbirk. ‘From our perspective, it often seems like they might be better-placed to allow technologists to develop software rather than attempting to go it alone. If you look at the Post Office and other very large institutions, in-house efforts can often run over budget and be slow in delivery."

None of this is to suggest that big organisations are incompatible with targeted, responsive interventions by the Tech community. Vestbirk points out Ernst and Young and PricewaterhouseCoopers as being perceived to offer better starting points on partnership, often working from a ‘blank sheet of paper’ with regard to developers. Big law firms, meanwhile, can come with a reputation for creating innovation boards consisting of senior partners who may not themselves be the right people to drive innovation.

The people who are best placed in innovation are often those able to work autonomous of the board,' says Vestbirk of the organisational culture in law. ‘Firms are starting to get it right, with non-legal people on their boards and making decisions, but we still see few firms with—for example—teams of coders working within them. The financial sector, and FinTech, offers an example of an industry that has provided a safe environment for innovation and is now benefiting from that relationship. It is hard to attract good quality developers, and—relative to LawTech—FinTech is still seen as the newer and sexier destination for developers to choose to work in."

However plainspoken the advice, the prognosis is obviously rooted in a concern for the legal industry and its ability to make good use of the technology now becoming available.

Lawyers have an affection for rank and status,’ adds Vestbirk. ‘This is sometimes helpful, but what it can leave the industry ill-suited to dealing with is a degree of failure. A philosophical outlook on failure is a key ingredient in the process of innovation. Tech often begins with a start-up lens, and where law firms are too heavily invested in the process they can restrict it in ways that are stifling. The biggest innovation required in LawTech is cultural, not technological, with a recognition that technology is to improve the lives of lawyers, not replace them."

Opportunity aplenty

One example of a company already helping law firms develop in-house technology is New York-based Neota Logic. What Neota does, as outlined by European managing director, Richard Seabrook, is to independently design the technology that then allows law firms scope to innovate internally.

Platform as a Service (Paas) Technologies such as ours provide law firms the tools to create their own completely unique products or solutions,’ explains Seabrook. ‘Others are less flexible yet still allow a firm to configure for their unique use case; for example, to white-label a custom non-disclosure agreement form, workflow tools or—in the case of text extraction engines—the firm can train to their own document sets and search terms. There are of course solutions that are straight “out of the box”, with limited ability to customise, but these tend to be more aimed at the automation of routine work for efficiency gains rather than productising legal services."

On the subject of how in-house relationships can be closely matched to a company’s specific needs, as is often the case in technology the weak links in the relationship are nothing to do with lines of code, but a product of human and business relations, and the design of the working process.

The greatest challenge we see in this area for law firms is not developing the technology but getting all the other “Product Management” aspects in place,’ suggests Seabrook. ‘This includes tasks such as identifying the right use case and target user group, pricing, user experience design, marketing, customer support and so on. Getting the technology to do its part is relatively easy—there are enough organisations and tools available on the market to do that aspect."

What is clearly important is law firms themselves being invested—as organisations—in developing technology.

The biggest challenge law firms still have is in prioritising lawyers’ time towards internal systems/programs. This issue has to be addressed head-on for the project to be successful. We have found the most effective partnering arrangements are where both parties have some significant “skin in the game”. This incentivises the organisations to prioritise their time towards the partnership yet at the same time partly or fully reimburses the professionals (technologists and lawyers) for their time spent on the project."

The assessment mirrors that of Vestbirk’s, when asked what the ideal conditions for the meeting of technology and law might look like.

I would like to see more firms engaging with the legal Tech community. It is currently very hard to sell-in to firms and this in turn prolongs the sale cycle, thus inflating costs unnecessarily. If we had access to siloed databases, to play with and test technology offline…ideas like this would be a very interesting prospect. What we currently see are situations where an agency might prototype software and law firms don’t know how to react. There are certainly big difficulties, especially when engaging large firms with legacy systems and complex M&A to deal with, but you have to start somewhere, and you have to start with an open mind."

Mind over matter

If designing systems to the specific requirements of each firm is crucial, then what effect does that have on the ensuing creation of intellectual property—do the ideas behind unique solutions become more or less valuable as a result of their very specificity?

Vestbirk offers an important external perspective on the prominent role that, as a default, lawyers often afford to Intellectual Property.

Lawyers will naturally have the IP implications of a deal well sewn-up in advance,’ says Vestbirk. ‘From the technologists point of view, however, when the development of tech is focussed towards IP from the get-go it can strangle progress. The principle of open-source software, which is very mainstream in tech, is something that many lawyers don’t yet fully grasp. The drawback is that this reticence about working in an open way, with a focus on IP, can restrict development and also the speed of development. Agile developments and iterative work processes necessitate an open approach or they can find themselves stuttering and going over-budget."

Whether collaborations take place in-house or on a more traditional customer basis, law firms seeking to realise gains through technology are now looking to a LawTech market that offers far more than it did even a year ago. As with any successful partnership, to make the most of the technological opportunities that developers can offer, firms will need to be honest in their appraisal of what they want from a relationship, as well as being self-reflective and open to compromise in how they work towards those goals.

The views expressed are not necessarily those of the proprietor.

Read more articles from our Automated law series:

Automated law—the mindset of the legal profession

Automated law—regulating technology in the legal industry

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