The Triple Threat Facing Generalist Law Firms, Part 2: Legal Tech | Firesign | Enlightened Legal Marketing

The introduction of LegalMation should be a cautionary story.

With the haunting motto “Worth a day of work in two minutes”, LegalMation uses IBM Watson’s artificial intelligence to automate legal disputes. Submit a complaint, confirm the nature of the lawsuit and jurisdiction, and in about two minutes you will receive draft responses and initial discovery inquiries.

Although subject areas and jurisdictions remain limited, LegalMation has signed contracts with Walmart, a national insurance company, and two national employment boutiques.

At Legaltech, a Walmart General Counsel estimated the product to save 60 to 80 percent in time. This is great news for Walmart – less so for lawyers doing the math by the hour.

A bigger trend

In Consero’s 2020 Corporate Legal Operations Report, 79 percent of lawyers said they would spend more on technology. This is an increase from the 2019 survey when 74 percent planned to increase their tech spend.

In Altman Weil’s Chief Legal Officer 2020 survey, nearly a third of CLOs said they wanted to use in-house technology to replace labor costs. And the events surrounding COVID-19 forced a higher level of comfort with the technology. In the same survey, respondents rated increased use of technology as the second most likely permanent change in legal departments after the pandemic ended. (No. 1? Remote work.)

Of course, software is unlikely to replace lawyers entirely. Legal personality is essential to the strategy and robots have yet to be licensed. However, the impact of technology on an industry dominated by the billable hour will be profound.

For example, the Financial Times reported that Allen & Overy developed MarginMatrix, software that automates the creation of certain documents for bank customers. MarginMatrix reduces the time it takes to create these documents from three hours to three minutes – a 98 percent reduction in billable time.

The Financial Times cited a study by Deloitte which estimated that legal tech could automate 114,000 jobs in the UK alone in the next two decades.

The motivation

Sterling Miller, the former general counsel of Marketo, Inc., Saber Corporation, and Travelocity.com, made a compelling case for law firms turning to technology: In-house lawyers are incentivized to find the most efficient, cost-effective way to do things. Many law firm attorneys are motivated to do just the opposite.

In addition, “technology doesn’t tire, sleep, call sick or go on vacation, and take breaks to eat or when nature calls,” he wrote for Thomson Reuters. “Technology just works on and on and on.”

And it works damn well.

In a study, artificial intelligence against 20 lawyers was included in the contract review – especially in the correctness of the review of confidentiality agreements. The AI ​​achieved an accuracy of 94 percent, compared to an average human accuracy of 85 percent.

The underlying software LawGeex promises internal legal departments that they will close deals three times faster and save 90 percent in costs. It lists eBay, Johnson & Johnson, and PepsiCo as customers. (LawGeex is doing another try with traditional law firms, offering “A Practical Guide to Reducing External Spending Through Automation” on its website. They’re not paranoid if they’re really out to reach you.)

What is vulnerable

What are the main areas where in-house attorneys are shifting resources to legal technology?

According to Miller:

  • E-discovery
  • Due diligence reviews
  • Contract preparation
  • Contract management
  • Analysis of legal costs / legal transactions
  • Process analysis
  • Fraud and Compliance Monitoring
  • Legal research

If you’re curious about what’s going on in your areas of expertise, take a look at Legaltech Hub, where you can search for technology offerings by functionality, job areas, compatibility with other software, target users, and more.

What this means for you

When a significant portion of your work is focused on similar, common processes, legal engineering poses a clear and present threat. While legal technology cannot entirely replace human lawyers, it can do absolutely enough work to affect your law firm and your livelihoods .

How can you make your practice robotic proof? Here are three important steps:

  • When you can define, develop, and dominate a particular niche, you will develop into a position where you will receive the strategic questions that require insights well beyond binary code. Marketing a niche law firm requires discipline, expertise, and skillful communication, but produces long-term results.
  • Focus on your humanity. Invest wisely in your personal relationships with your customers. Substantial customer feedback is a good start: research by Acritas shows that only 16 percent of customers are invited to formal customer feedback in any given year. Those who do this are happier as a group and are less likely to change providers.
  • Let the robots do the work for you. Increase your own efficiency and profitability with the legal technology currently available – or create your own. What do customers ask repeatedly? What processes do you do over and over again? What work do you do with worksheets or templates or decision trees?

Husch Blackwell provides a strong example on this last point. After the shutdowns triggered by COVID-19, the law firm’s labor lawyers advised several clients on the reopening of their facilities. The company eventually summarized this knowledge in a COVID-19 and return-to-work policy generator. “An easy-to-use, affordable tool that enables organizations of all sizes to create return to work plans that are tailored to their operations, starting from the start.”

Users fill out a survey form asking key questions about their facilities and their responses generate a draft based on preprogrammed options. An employment lawyer reviews and finalizes the draft policy, then schedules a call to review and finalize with the client.

What a blessing it is for both sides of the relationship.

Customers get the predictability they crave from an unpredictable industry. Husch Blackwell says it will deliver a policy within two to four business days for a fee of $ 2,750 to $ 8,750, depending on the size and complexity of the company. (Note that 28 percent of customers say they avoid legal solutions because the final cost is not clear, according to Clio.) Every customer benefits from extensive and battle-tested research – nobody drives it.

In the meantime, the company has the opportunity to increase its profitability and efficiency through repeated use of this work product. It also removes many barriers to cross-selling. Lawyers don’t have to worry about the deskside nature of a product (nor about it stealing origination credits) – or refer a client to a colleague they don’t know. Additionally, saying, “Our company has a policy generator that can help you,” is far more action-oriented than saying, “I think Jane Doe in Employment does.”

From 2021, intelligent lawyers will be creative when it comes to using legal technology to make their work more cost-effective – and to consolidate their position as efficient, strategic and indispensable advisors.

The not so clever lawyers? Maybe they should start welcoming their new robot overlords.

Did you miss part 1 of our series? Check out The Triple Threat Facing Generalist Law Firms, Part 1: Insourcing.

Next up: Part 3 – The big four, not just more accounting.

[View source.]

Comments are closed.