Is it time to let our imagination run riot with the potential for solutions to address big business problems that could be solved through law and technology? What more can we achieve through focusing on the business job to be done with law and technology, rather than just the legal operations process?
By Catherine McGregor
Part 1: Legal technology – it’s time to move beyond legal process
Technology has fundamentally changed the way we think and how we do business. Similarly, it has impacted the way law is practiced and will continue to drive change as practices seek further efficiencies, lower costs and the ability to deliver more value to their clients.
For many, the notion of innovation in law is synonymous with the use of technology. Characterised by the term ‘lawtech’ this covers a host of different types of technology in legal firms.
In practice, the focus has been on the application of technology tools to support high volume, low priority legal processes – or how lawyers work - and has certainly revolutionised the way we look at legal services.
An area where there has been surprisingly little growth is the application of technology to legal problems outside of legal process. There’s arguably been some focus on this in the access to justice space. Laudable as that is, there’s still a large gap in how organisations use technology and law to mitigate key business risks, particularly those based around online trust issues.
A significant contributing factor to the lack of progress in this space may be that the legal profession is currently too solipsistic in how it applies technology. The main growth area for legal technology has been around how legal work is delivered. This is partly as a result of the transformational impulse in the profession, beginning with a focus on operational efficiency.
This begs the question: is it time to let our imagination run riot with the potential for solutions to address big business problems that could be solved through law and technology? What more can we achieve through focusing on the business job to be done with law and technology, rather than just the legal operations process?
As businesses find new avenues for digital interaction and building trust with their customers, so too lawyers are being asked to build digital trust in interactions, which were previously people centric.
This may, by necessity, lead to new ways of understanding those interactions and ultimately new ways of approaching them. Ten years ago, privacy was seen as a somewhat mundane area of law, explains Kenny Robertson, General Counsel for Outsourcing, Technology and IP at RBS, “Now it’s shifted to become fundamental as issues around data privacy speak to the very nature of the contract of trust between businesses that use technology and their clients. That’s in part due to the shifting nature of how business is conducted and companies waking up to how customer data can be monetised. Add in some actions around technology and social media companies farming data and using it and data privacy is now a fundamental issue for businesses.”
“In the future, people don’t just want more technology driven products and services; we want technology that is more human.”
The growth in the use of technology is not matched by a similar shift in the ways most of us understand what we do and conceptualise what we might do beyond analogue processes. It’s not just a problem confined to law. This can produce what’s been described as a ‘tech clash’ according to a recent report by Accenture, Technology Vision 2020: We the Post Digital People. What companies need to do is to be able to imagine new ways of doing business that is inspired by new technologies, rather than just mapping technology onto past ways of working:
“In the future, people don’t just want more technology driven products and services; we want technology that is more human. Enterprises that ignore this message will face an existential tech-clash, in which today’s models are incongruous with people’s needs and expectations.” (Paul Daugherty, Marc Carrel- Billiard & Michael Biltz, Technology Vision 2020: We the Post Digital People (Accenture, 2020) p.2)
Until now the application of technology in business has followed well-trodden digital roadmaps created by the original digital pioneers. We can see this being played out in the legal profession where the use of technology has so far mainly been a tool to improve process efficiency and save costs; a replacement for the high volume, low cost application of manpower.
Now technology is starting to be used to spot data trends to inform decision making and deliver value added client services. This is an area where there has been far less focus but is potentially where the most exciting and creative growth for legal technology exists in tandem with human expertise.
Part 2: Technology and Law - coming together to solve big business problems
There’s an interesting and somewhat under-represented area for growth where technology and legal expertise come together to solve big business problems. In this equation, technology is not simply replacing legal talent, but rather supplementing it or taking it in new directions, which have not previously been considered. But why is this not currently a greater area of focus?
Kenny Robertson at RBS believes there are a number of factors. One might lie in the way lawyers are trained and therefore the way that they conceptualise their role in the world, where everything is filtered through the practice of law. Robertson also wonders whether the general conservatism of the legal industry and resistance to change are factors as well.
“I think law is still very much an analogue industry in the way it thinks about itself. I heard on a podcast a while ago that if a lawyer from 80 years ago walked into a law firm office now, apart from the computer on the desk, it is by and large the same job, with the same principles underpinning it now as all those years ago. To say it’s change resistant is an understatement! But people who are in-house mostly used to be in private practice, so we still have a lot of those habits and ways of thinking.”
Robertson also believes some of this is related to the fact that many lawyers feel less confident around numbers and data than some of their peers in the C-suite and as a result, historically, many legal departments were operationally a mess.
“Many departments were ripe for disruption. And when you have someone come along, who can do numbers or who can do project management or analytics, or data engineering it's just like ‘Wow, you're the cleverest person in the world!’ “
For Robertson, it’s that many legal teams were and still are playing catch up with other areas of the business regarding the use of data and haven’t yet felt the desire to make the intellectual leap to other ways of how data could be used. Legal commentator Mark Cohen echoes this in his analysis of law firms’ reluctance to use data to inform decisions.
“How can a trillion-dollar global industry that serves the largest, most tech-savvy businesses remain a data wasteland in the digital era? Short answer: legal culture and the myth of lawyer exceptionalism; law’s traditional labor-intensive, leveraged approach that supports the traditional partnership model, sustains profit-per-partner, and is the cornerstone of its resistance to change; a growing misalignment with business, especially its reliance on data; limited investment; and law’s spurious correlation between data and confidentiality.”
(Mark Cohen: “Why is Law So Slow to Use Data?”: Forbes: 24th June 2019)
Dan Kayne, General Counsel (Regions) at Network Rail agrees that much of the focus on what lawyers do in legal tech emanates from the ‘lawyers are special’ bias inherent not only in legal culture but also in legal training. Dissatisfaction with this viewpoint led Kayne to create the ‘O Shaped Lawyer’ Programme which critically examines the required competencies for future lawyers in the light of the needs and demands of businesses. He feels that legal education has remained stagnant for decades, with too much emphasis on technical legal training and too little on the skills that are so crucial in today’s business environment. Whilst many in-house lawyers, through their experiences in corporates, have greater opportunity to develop those broader skill sets, private practice lawyers are rarely afforded the same time or opportunity to develop them. That’s not good for the individual or for their clients.
In addition to the ‘O’, Kayne references the Delta Skills Model as developed by Cat Moon of Vanderbilt University Law school as a useful template for thinking about the issues around legal tech.
“If you encourage people to learn and develop in a much broader way it is likely to lead to different areas of focus, decision making and therefore outcomes, around the use of technology.
“The Delta Model and the ‘O’ are so complimentary - too many lawyers are still focused on the base of the pyramid placing the greatest emphasis on traditional legal knowledge and competencies above all else. Whilst we continue to see disruption in the profession around the process part of the model, through operations and tech, the people part largely remains an afterthought in education and practice. I find this incredible - people, culture and engagement drive everything – we have to flip it on its head – it’s why the ‘O’ has become more important than ever.”
What this lack of focus on a well-rounded development in the legal profession leads to, says Kayne, is that it’s harder to get people to think about the broader contexts.
“If you encourage people to learn and develop in a much broader way it is likely to lead to different areas of focus, decision making and therefore outcomes, around the use of technology. It is so easy to be tempted by the multitude of new shiny tools available in legal tech without really interrogating their fundamental utility and without imagining or pushing for more creative and adaptable applications.”
Carolyn Jameson, Chief Legal and Policy Officer at Trustpilot agrees. She feels that the lack of creativity in applications of legal technology may be around perceptions of lawyers - both their own and other peoples’:
“People will try and put lawyers in a box, questioning involvement in things that are perceived to be ‘business stuff’ It can discourage lawyers from thinking outside of their legal box.” It can also be a reaction based on fear, says Jameson, not wanting to explore the application of technology beyond legal process tools in case it becomes a fundamental threat to lawyers’ very existence.
The plethora of legal technology operational tools available is also part of the problem, says Kayne, given that many of these tools are still limited in what they can actually achieve. Another factor to consider is who is developing these tools? The inherent professional bias of lawyers towards other lawyers may actually be a disadvantage. Buying a product developed or supported by ex-lawyers might seem like a safe bet, but that in itself could be part of the problem – whilst we continue to rely on those who know the system, we aren’t lifting our heads up and seeing what other sectors are doing. We may be improving but playing it safe is a sure way to keep us behind the technology revolution curve”.
Kenny Robertson from RBS agrees that the direction legal technology is currently moving in is a factor limiting the more creative application of technology and law to solve business problems. He believes that part of the issue is that the current crop of legal technology is overhyped and not generally living up to that hype. “I think on the provider side there’s been a huge amount of hyperbole over what technology can do; most of it is overstated. From the in-house perspective, when an experience with legal tech is not great it can force your creative processes to stop with it. If the answer isn’t satisfactory, you stop asking the question.”
Professor Richard Susskind, a pioneer in considering the potential for the application of technology across the professions, feels that this operational bias is not just unique to law: “There is a preference for ‘automation’ of past practices over ‘transformation’ of the underpinning business model.” This stasis is what was identified by Accenture in their Technology Visions 2020 report that businesses are often unable to imagine new ways of doing business inspired by our new technologies and just mapping technology onto past ways of working. The fact that the law is still a hugely successful profession in its current status quo adds an additional layer of stasis as Susskind explains:
“When speaking at partners’ conferences of successful firms, I often say it is hard to convince a roomful of millionaires that they’ve got their business model wrong. The market does not incentivise more ambitious use of technology than process improvement, and this has been especially so during the crisis – the emphasis has been on remote working rather than, say, AI.”
“There is a preference for ‘automation’ of past practices over ‘transformation’ of the underpinning business model.”
Part 3 – Online Brand Protection: applying legal technology to solve a big business problem.
If the current marriage of legal and technology has only scratched the surface of what could be possible; where are the potential new applications?
One area which has not been as fully explored is the pairing of technology with legal expertise; looking at utilising the best of what lawyers can do with the best of what technology can do to solve business problems? Could greater focus on this approach start to change the relationship between in-house lawyers and the more creative use and application of technology?
UK based legal tech company Pasabi, is a great example of this approach and one of the few companies working in this new frontier of technology combined with law to solve fundamental business problems. Interestingly, the development of their technology draws on insights from other disciplines, primarily behavioural science to solve problems being thrown up by our online interactions with content and products across digital channels.
Pasabi applies algorithms to identify behavioural patterns of users across social media, marketplaces and e-commerce. Whilst the initial concept supported an application for the personalisation of online shopping experiences, a chance meeting with David Lindsay, Director of Technology at LVMH led to a rethink.
The technology is now used to identify ‘bad actors’ selling counterfeit LVMH products across online channels, including social media. Another key use case of the technology has been the ability to identify fake reviews, a key challenge for e-commerce sites and review platforms.
Unlike other brand protection services to identify counterfeit goods online, the Pasabi approach does not focus on the product but the contextual information about the seller. This can include personal identifiable information such as phone numbers, WhatsApp, websites, and email addresses, along with other social signals which can identify ‘bad actors’ and draw connections between individuals to identify groups acting together. This allows the identification of ‘hotspots’ of activity which company lawyers can then focus on with cease and desist letters.
The algorithms can also identify the visual location of photographs of fake goods. Counterfeiters may stage multiple photos shoots on the one day with the same backdrop or location. Identifying the same background can reveal a new network of connections in addition to focusing on sellers across online platforms.
Pasabi is assisting the legal work of lawyers in a different way. It is solving a legal problem at the data scale, helping brand protection specialists to understand the true scale of the problem, and the insights they need to solve it.
Carolyn Jameson, Chief Legal and Policy Officer at online review platform Trustpilot, thinks this is what makes Pasabi so interesting. “I was just really fascinated with what they're doing. It's not about using technology to solve legal operational problems, which I find less interesting anyhow. I thought it was really clever, and you could see how transformative it would be from a fundamental business perspective.”
The use of Pasabi was able to show patterns in fake reviews that were not discernible to the more traditional solutions on offer. This has provided really workable solutions for Trustpilot’s legal team, says Jameson. “Pasabi were able to turn huge volumes of data into something that's actually really useful from a legal team perspective. Their user interface is really good, and is now something we're looking to use to flag suspicious activity and take action at scale. This should also have a deterrent effect, if people think they're going to get caught.”
“Being able to identify the scale of the issue through this use of technology has also allowed the legal team to be proactive in mitigating future risk and in discussions with regulators. We have been able to help them to identify where some of the challenge is coming from, as more become concerned with tackling fake reviews online.”
Being involved in this technology solution has been transformative for Carolyn Jameson as an in-house lawyer, particularly as part of a relatively new leadership team at Trustpilot: “Preserving the integrity of content on the Trustpilot platform is one of our key company objectives and we’ve really gained momentum looking at innovative technology.” If lawyers could get more comfortable with embracing more creative technology solutions, it would be a real positive for them in the business, and one which allows general counsel to move beyond many of the stereotypes about lawyers, if they can demonstrate that the marriage of law and technology can make a huge difference to fundamental business goals.
In conclusion, the legal industry needs to look more closely at the fundamental issues of how business practice is changing as a result of digitisation and move beyond technology solutions that focus on legal process. This is not to say that automation and use of technology to improve legal processes is a moot point – indeed it’s still an area that needs much focus and improvement. However, the challenge for legal technology may be the same as for lawyers and the legal industry in general, which is being more than just lawyers and becoming business partners.
A creative focus on technology and law working together to find ways to solve new business challenges can start to produce more interesting innovations. Pasabi is one such business that is creating a new and interesting category of legal technology where the focus is the application of law and AI technology to solve fundamental business problems in counterfeit products and fake reviews.
© Catherine McGregor Research