Legal technology deployed in-house is yet to have direct impact on relationships with external law firms
"As part of our digitalization strategy, several technological tools and solutions have been (and are being) adopted in-house by corporate and business unit functions to support their day to day operations and provide best in class services to our customers..."
Q1. How did you become interested in Legal Technology?
First, I must state that I have always been a technology enthusiast. We are living through one of the greatest technological revolutions in history affecting every area of our lives and I have been intrigued by the transformation and innovation brought about by technology and how this is continuing to evolve daily. From self-driving cars to smart phones and devices and innovations in medical technology, its applications are endless and still evolving! We have seen also how businesses that fail to adopt digital transformation and an innovation culture run the risk of becoming extinct. A good example is our yellow taxis vis-a-vis other digital transport platforms like Uber, Taxify and Lyft.
My interest was further driven by the need to upskill to align with my company’s global business strategy on digitalization (Siemens has developed innovative tools in energy and industrial automation to help our customers harness the power of this digital transformation). The business world of tomorrow is about digitalization and companies that tackle digital transformation and Internet of Things (IoT) will be the leaders shaping the future of their industries. Therefore, it only makes common sense for professionals who want to remain relevant and act as trusted advisors to these businesses to be able to speak and understand the language of technology.
Q2. How has legal tech impacted your work at Siemens?
As part of our digitalization strategy, several technological tools and solutions have been (and are being) adopted in-house by corporate and business unit functions to support their day to day operations and provide best in class services to our customers.
Within my area of function, we have rolled out legal tech tools that have automated functions that we (that is, legal) had hitherto performed manually. These range from basic contract preparation and review to case management, M&A transactional reporting and external counsel engagement, renewal & evaluation. For example, our smart contract templates, which has our standard terms and conditions have been automated alongside our contract’s playbook. This has empowered our sales and business teams to draft some of these basic contracts without recourse to the legal team.
We have also optimized our existing cloud-based enterprise solutions for digital signatures, customer relationship management, information and knowledge management and real time collaboration across the organization. We have some upcoming projects in the areas of legal chatbot development , data management and analytics and spend management.
So far, the adoption of legal tech tools has empowered my team by driving efficiencies and cost savings as routine and repetitive tasks are being phased out allowing us to focus on medium to high risk tasks that truly add value to the business. More importantly, its adoption has led to process improvements and innovative culture and mindset as we are continuously having conversations around which of our processes we should be automating, what we should be doing better and/or faster or how we can achieve more efficiencies with our processes.
On the flip slide however, with cost savings and process efficiencies, it becomes increasingly difficult to justify additional spend on resources (both in-house and external).
Q 3. How would you say legal technology has impacted your relationship with external Law Firms?
The efficiencies brought on by legal technology so far deployed in-house is yet to have a direct impact on relationships with our external law firms or spend as we have been in-sourcing for quite some years. We engage external law firms in defined circumstances such as where we lack in-house expertise on a subject matter, to address regulatory concerns or to support large scale transactions that need to be completed on very tight timelines.
With the implementation of additional legal tech tools and solutions, it is certain that in the mid to long term, more work would be undertaken in-house with services of external law firms limited to other types of legal work that technology is not going to displace (at least for now) with increased demand for value and transparency in the fee billing structure from external law firms.
This also provides opportunities for law firms to be creative and develop alternative business models, which are customer centric. t
Q4 What changes if any have you observed in legal service delivery from your external law firms that may be directly attributable to the use of emerging legal technology.
The area where I have felt the most impact from our external law firms is in the area of automation of knowledge management through the electronic distribution of periodic newsletters (some would argue that this not tech). That is not to say that the law firms are not using emerging technologies to automate their other back office operations in the areas such as billing, timekeeping, invoicing, information management and legal research.
However I think that innovation regarding use of legal technology in actual commercial practice or front office is currently driven by corporate legal departments/in-house counsel. To the best of my knowledge (though the jury is still out) only a few multinationals and large corporate legal departments of local companies and financial institutions are currently able to deploy emerging legal technology tools because of cost. An organization like Siemens can deploy to the extent that we do, because we have scale. Each country adopting these technologies contributes to the cost of procuring the tools. Local law firms may not have the benefits of this scale; hence it may not be cost effective for law firms to procure these tools.
Q5. Your work and masters programme must have exposed you to global practices and trends regarding utilization of legal technology in legal service delivery. Please share with us some of the trends/tips that you think would be easily adaptable in the Nigerian space.
Apart from my work, which daily exposes me to some of the ways that in-house and external law firms both in Nigeria and other jurisdictions utilize emerging technologies, this year, I had the privilege of being exposed to the global legal tech eco system through my executive course in Legal Tech. Our immersion learning experiences took me to Silicon Valley, Madrid and Tel-Aviv, where I met various stakeholders in the legal tech eco system; from tech lawyers, to academics, legal tech entrepreneurs, big tech companies, venture capitalists and vendors. It was an eye-opening experience as I saw firsthand the many advances in the legal tech space.
First, I would like to highlight the fact that across the three different continents that we visited, the consensus amongst all stakeholders was that legal tech had come to stay and law firms including corporate legal departments that do not adapt will be left behind. It was also clear that the drive to adopt legal tech is coming from in-house corporate departments who are under pressure from their management to deliver ‘more for less’ whilst also increasingly demanding for transparency in their budgets and spend management with their law firms.
A common trend in all the jurisdictions visited is the rise and growing influence of Alternative Legal Service Providers (ALSPs) who are driving the creation of new business models by driving the ‘disaggregation of legal services’ from the practice of law (sale of legal expertise) to legal expertise leveraged by technology and process (business of law). The ALSPs are beginning to be a core service provider just like law firms to many corporate legal departments doing pretty much of what law firms do except the practice of law (which is in line with local bar rules in most jurisdictions). More and more international law firms (particularly the magic circle law firms) are also partnering with the ALSPs for back office operations and other tasks that are traditionally not in scope for lawyers.
Other trends which we can also adopt from other jurisdictions include the establishment of separate arm (incubators) to create legal tech solutions alongside clients. This is prevalent among the global top tier law firms.
One of the most interesting and profound lessons for me was that despite all the hype and developments in the field of legal tech, its adoption is still evolving albeit not as fast as we are witnessing in FinTech. Its adoption has not been as widespread as it is being made to believe particularly amongst the law firms. Apart from the USA, some of the foremost law firms in the jurisdictions we visited still rely on very basic simple technology tools. For example, in Tel-Aviv, we saw two very different tech utilization approaches among the two top tier firms which we visited. In one of the firms, the Director of Legal operations after giving us a very detailed talk on all the advancements in the tech space, disclosed that they did not use most of the tools that she had discussed. She told us that after analyzing their processes, they discovered that many of those tools would not necessarily enhance their processes and so they utilized simpler basic tools which were enough to provide the results they needed. In the other firm however, they had most of the state-of-the-art technology available in the market.
Bringing it back home, I would summarize by saying that law firms and corporate legal departments should ensure that they have a legal technology plan as part of their overall innovation strategy. Firms need not go for the most sophisticated or expensive legal tech tools out there in the market. They can start by examining and documenting their processes and thereafter deploying very simple technology solutions or utilizing their existing enterprise systems which can be integrated with new tools to make the practice more efficient. Firms need not go for the most sophisticated or expensive legal tech tools. They can start by reviewing and documenting their processes. Technology will not create processes but rather will rather help optimize them. Thereafter, law firms can deploy very simple technology solutions or utilize their existing enterprise systems, which can be integrated with new tools to make the practice more efficient. Innovation is not magic! Real change comes by taking small and incremental steps.
Most importantly, an innovation strategy must also embed a change mindset and culture amongst legal professionals, who are generally renowned to be very traditional, inflexible and reluctant to embrace change. This also entails the development of new skillsets among professionals in emerging areas such as data privacy, cybersecurity, blockchain and smart contracts, artificial intelligence and ethics and in technical areas such as programming.
Q6. In what other ways do you think law firms can leverage emerging technologies to enhance their relationship with in-house departments?
As I mentioned earlier, legal technology has changed the landscape for in-house lawyers in corporate departments and eventually this will spread to even to local companies. General Counsels (GCs) are starting to feel pressure from the business to reduce legal costs, whilst we in turn are looking to the law firms to get more value for less or even the same amount of what was spent in the past.
Therefore, law firms need to be more efficient. They must review and optimize their processes and remove waste from these processes (which are usually monetized and passed on as costs to clients). This may entail law firms looking into their existing business models to meet up with the requirements of 21st century “lawyering“. Truth be told, we cannot continue to use business models adopted since the 18th or 19th century to deliver services to clients confronted with 21st century issues.
Many law firms, particularly top-tier firms approach billing from the perspective of their pedigree and ranking, rather than from a client-centric perspective. This results in pushback from in-house counsel and in some cases loss of the few engagement opportunities that still exist. I am of the opinion, that leveraging on e-billing, matter management and reporting solutions would help law firms price their services better while providing the transparency that we require.
Another area where I think law firms can immediately leverage on technology, is in the area of data mining and analytics. Data is the new oil and many law firms are sitting on a gold mine of data, hidden in their emails, files, cabinets, legal opinions and transaction documentation. Law firms can focus on leveraging the appropriate artificial intelligence (AI) data analytical tools to structure their data and use analytics to derive ancillary insights that are beneficial to their clients, not just delivering the output anymore. For instance, a firm having analyzed its client’s data over a period of time can approach the client to show the client that it faces significant risks in a particular area and provide strategies and solutions to address such risk. This is the direction in which legal service delivery is headed.