On nearly every measure, legal technology appears to be thriving.
This sector is now a $16 billion industry in the U.S. There are 715 legalTech startups. These companies secured a record $155 million across 67 deals in 2016. The figures for 2017 could easily beat this (with large investments for Justin Kan’s Atrium LTS, HelloSign, SimpleLegal Casetext, and LawGeex, among others). Major companies have undergone legalTech transformation including Microsoft, JP Morgan, and IBM.
Despite all this positive transformation, there is one major danger threatening LegalTech’s future. This threat is more deadly to a company like LawGeex than all of the 715 legalTech startups combined.
Status Quo or the fear of Change
In the words of Noory Bechor CEO of LawGeex: “Our biggest competitor is the Status Quo”. In law, the status quo, based on “skepticism” and “precedent” is hardwired. The problem begins from law schools which encourages fear of failure . Then the the U.S legal system, rests on guidance from previous case law and precedent, discouraging risk-taking.
For commentators it is often a race to the past to explain how little innovation law has seen. Professor Paul Maharg Professor, Osgoode Hall Law School talks about “graduate assessment regimes which wouldn’t look out of place in the 1870s.” Kingsley Martin, talking about contract creation, says: “The scribes that first drafted precedents in 1392 at the Worshipful Society of Scriveners would recognize the contemporary practice of marking up the last, closest draft to the needs of the current transaction, albeit with a keyboard and not a quill”.
The status quo manifests in the struggle over technology. Research shows 75% of law firms, for instance, spend somewhere between 0 and 4% of their total revenue on technology, compared to 5.2% for the average U.S company.
The Solution: Collaboration
The fastest path to change, legal innovators have worked out, is collaboration. This antidote to the status quo is counter-intuitive to the lawyer mindset, which tends to resist giving away hard won information. But somehow, collaboration is taking hold at the top levels of the profession.
— Daniel W. Linna Jr. (@DanLinna) May 11, 2017
Mary O’ Carroll, Head of Legal Operations at Google, set out the mindset of being protective of knowledge, rather than collaborative, in her closing speech at the Corporate Legal Operations Consortium, (CLOC) in Las Vegas: “When I first joined the informal gatherings of Operations leaders, I’ll admit that I was much more there to learn than I was to share. I didn’t see any reason why I should give away my secrets.
“One of the earlier things we started talking about was standard engagement letters and billing guidelines. Well, I have a very good set of law firm billing guidelines. Why? Because it went through rounds and rounds of edits and opinions and research and buy in… and these crazy people wanted me to just share the final set with others? You’re out of your mind!”
Clock is ticking for Collaboration
CLOC has come to embody the collaboration principle as a means to shake up the status quo. Its leaders, from top companies, including LinkedIn, eBay, Starbucks and NetApp, could justifiably guard their legal know-how. Yet the movement says moving from the status quo will only come after intense collaboration on best practices and processes. Rather than being built on a fluffy sense of community, O’ Carroll describes collaboration as firmly in the camp of “self-interest”.
Please do not reinvent the wheel
Carroll says the slow-moving profession has to learn from each others hard won successes (and failures) and in double quick time to catch up with other industries.”Now, I don’t have time for you to suffer through that… So please… have my guidelines, put them in place asap” says Carroll. “Let me know when you’re ready for the next thing and hopefully someone has something you can leverage. Please do not recreate the wheel.” She adds: “It’s the only way we’ll make progress as a group and profession. It’s good for all of us.”
— CLOC (@cloc_org) March 29, 2016
Different legal values coming together
The collaboration net includes everyone wanting to move away from the status quo, including innovative vendors, law schools, firms, engineers, paralegals, and communicators. Sellers of top legal technology are also uniting to help change attitudes and drive change in the profession, demonstrating through reiteration that everyday pains for lawyers can now be eased, from contract review, to analytics, to sharing institutional knowledge through expertise automation, or having better contract due diligence, eDiscovery and billing processes. LegalTech providers share around each other’s content that reiterates a message of change. LawGeex’s In-House Guide to Legal Tech for instance was shared by dozens of companies in the legal profession.
Come as competitors, leave as collaborators
Alison Kay, Gobal Vice Chair of Industry at EY, argues that the rapid pace of change across industries means collaboration is “the future” of business. Kay says: “These are exciting and unsettling times – times in which industries themselves are being redefined. This means looking for answers in ways and places that we haven’t before. To succeed, we need to look beyond current industries and silos to broaden our thinking and relationships to embrace collaboration – whether through partnerships, alliances, networks or ecosystems.”
Other collaborations will grow out of necessity. Professor Richard Susskind in his book, Tomorrow’s Lawyers, points to a future when legal departments at financial institutions will share legal workloads. This will be driven by the need they collectively face to meet multiple (similar) compliance challenges,
In-House lawyers are turning to legal technology to foster better collaboration with other departments, fueling smarter legal processes in companies.
CLOC has found that collaboration is striking a chord as many lawyers become frustrated at inefficient processes. By way of example, some 1000 legal leaders attended CLOC’s event in 2017. The institute predicts the attendees will more than double to 2500 in 2018.
Carroll told the Institute that everyone needs to be on board for real change to occur. “I need everyone to be passionate and ready to transform the future of the legal services delivery model”, says.
“If only a handful of legal departments are ready to automate internal workflows and the rest are still tracking things on spreadsheets… or even post-its(!), then we’re not going to get very far.”
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Jonathan Marciano, Communications Director at LawGeex, is originally from London. He is currently in Tel Aviv, helping to bring about the legal revolution, one press release at a time. Follow him on Twitter. @J_Marciano