Is Law Firm Tech Talk Just a Lot of Hot Air?
From the outside it can feel like progress has been faster than it really has been.
December 09, 2019 at 02:54 PM
4 minute read
The original version of this story was published on The American Lawyer
A senior in-house lawyer at one of the world's largest technology companies recently told me she never uses the phone anymore, opting instead for video calls. Except, that is, when she talks to lawyers. She says they are the most antiquated people she deals with and that she can't understand why they find it so difficult to show themselves on camera. She also finds it frustrating that lawyers don't use WhatsApp or Google Docs like everyone else.
For her, this reticence to modernise makes a mockery of law firms' claims that they are making great strides in technology. And she is not the only sceptic.
One former global head of a large international firm says he thinks most legaltech initiatives are just hot air, while the London head of another global firm echoes such concerns, saying he has yet to see any meaningful way in which lawyers' working lives have been changed by legaltech.
Part of the scepticism is undoubtedly linked to the fact that it is natural for people to take operational efficiencies for granted. When was the last time you praised the time-saving inventions of a microwave or a dishwasher? For years, large law firms have been taking advantage of automating technologies, especially in areas such as contract drafting and on commoditised work. Security systems, due diligence and dispute resolution and arbitration tools have all improved, to little fanfare.
But there is also little doubt that the sceptics are speaking the truth when they dismiss a lot of the hype surrounding the industry.
From the outside, it can feel like progress has been faster than it really has been. Announcements by large firms in this space are not evidence of progress. The former international firm leader says many such announcements are just part of the marketing deal law firms agree to to get a tech company to work with them to develop something. Some tech providers call it "innovation by press release".
Nor are innovative solutions guaranteed to succeed. Don't forget that partnerships that sign off on large investments are inherently made up of older people who have less incentive to see the need for change and spend money on the future. This is a big frustration of many in the tech world. Partners frequently say that legaltech is the future, but not in their specific department, as the work they do is too complex or has too many variables.
The billable-hour model also hinders the growth of legaltech, according to some tech providers. Most clients do not choose lawyers because they are fast. Efficiency may improve internal profitability, but it does not necessarily improve client service.
And some partners argue technology often has a negative effect on efficiency. They say that the ease with which contract terms can now be tweaked actually prolongs the process, rather than abbreviating it, as both sides make countless adjustments before reaching an agreement.
The other enemy of legaltech is the growth of the tech market itself. There are now so many startups offering a whole range of products that it can feel to buyers that the prudent thing to do is wait on the sidelines until there has been more consolidation and the products are more compatible with one another.
All of this leaves us with a strange situation in which one of the sectors most in need of modernisation is also largely resistant to it. This won't remain the case forever, of course. No one wants to be left behind, and there will undoubtedly come a point where certain tech products become clear market leaders and are widely adopted across the industry.
But until then, claims about the future of legaltech will need to be tempered with a heavy dose of realism. For an in-house lawyer at a tech giant, the firms that currently lead the market will simply be the ones that learn to do video calls.
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