Technology: End of the profession or a life raft
Wednesday, July 08, 2020 @ 1:59 PM | By Alison Meredith
Although the legal industry has historically been slower than many to embrace new tools, after our three-month crash course in the new normal this will change and quickly. A cautious approach to investing time and money in new technology like cloud computing or machine learning is often the safest route forward. By letting other firms trial new tech first, you can wait on the sidelines at no cost while they help to develop the product and iron out the kinks. However, with time, resisting new technology breeds costly inefficiency that the market just cannot support. The COVID-19 pandemic has brought a swift and sudden change to the essential requirements of a productive lawyer’s toolkit that requires an equally swift reaction.
How we work today is not the same as how we worked three months ago, and after the pandemic it’s unlikely our world will return to exactly how it was. This makes it increasingly dangerous for firms who have been holding off on transitioning to a more automated and efficient practice to continue to wait.
The good news is that there are some real benefits to implementing new tools in your practice. It’s much easier to understand these benefits by looking at the same application in a different industry. Let’s consider the building industry.
Imagine that there was a new tool available to builders across Canada. This tool was a magic hammer that builders could use to build houses in half the time. If you were looking to have a house built, which builder would you choose? The builder who had chosen not to use the magic hammer and who would take six months to build your house, or the builder who had invested in the tool and could build it in three?
When firms invest in technology to reduce low value repetitive tasks their lawyers are freed up to focus on work that can add real value for their clients. We see firms using technology to take on larger review projects, be more competitive when necessary to win deals and offer thorough analysis even when deadlines are tight. Many tools are designed to increase collaboration between individual lawyers and between offices, and help senior lawyers monitor progress while juniors advance more quickly. Technology can provide convenient guardrails that can help a practice manage projects and delegate work in a very efficient manner.
For builders who operate in a local market, the risk that a competitor in the neighbourhood has a magic hammer and will undercut them may be unlikely. But for lawyers this is more of a problem. Our work no longer relies on face-to-face meetings, which means our market is becoming increasingly more global than local. As we transitioned from office to home, we learned how small our world really is and how connected we can be. There are challenges, but there are also huge cost benefits to a remote workforce and it’s unlikely that these benefits will be lost on our corporate clients. Prior to COVID-19, we already saw cost-sensitive clients outsource more routine legal work to teams in lower cost jurisdictions, and trying to get a client to swallow the cost of housing a legal team in downtown Toronto now may be even harder.
If your firm is able to cut costs by reducing your dependence on a physical office and opening up your online presence to serve clients all across Canada, then the market for your services has probably just grown. Firms who are willing to rethink their business strategy and pivot to take advantage of a new normal may be the ones that reap the benefits. The resources previously dedicated to housing teams in office buildings downtown could be directed instead towards sensible tools to help their lawyers work more effectively, and to grow their online presence to attract clients from a much larger market than their immediate city.
In the last few months, we've seen many firms become increasingly serious about re-evaluating their current tools and taking the time to ensure they have the right technology in place to assist their lawyers and remain competitive. So what tools are available to help legal teams make the transition, and what’s the best way to go about implementing them?
For many key pain points, there will be existing market-proven technology solutions available. In order to stay competitive, your team should be looking at areas within your firm where your lawyers are spending time on repetitive tasks that are necessary to provide the service but do not add value to the end product the client receives. These will be tasks that are typically not billed or only partially billed and so may be a cost-negative endeavour to the firm currently. In the context of contract analysis for M&A transactions for example, we find that many lawyers doing review manually spend a huge portion of (often ultimately non-billable) time on simply assessing the documents in the data room, assigning out contracts to associates, tracking the review process, identifying key terms by keyword search and copying (or retyping!) terms into a due diligence report. For teams conducting M&A work, investing in a decent contract analysis tool could remove a large portion of this repetitive work while maintaining or improving the quality of the work your client receives.
When reviewing technology, the end goal should always be to invest in tools that will help the firm deliver more value to your clients. Keep that at front of mind and put time aside to systematically test tools that are most interesting to you. Look for technology partners who can provide flexible pricing structures to accommodate your deal flow — this is particularly important in uncertain times. Thoroughly pilot the tools that make your shortlist to ensure they work for you.
Alison Meredith is the chief legal officer for Diligen, a contract analysis company based in Toronto. Her background in legal technology is of great value to law firms and corporate legal departments in need of contract review expertise.
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