Two heads are better than one—a sentiment that may doubly apply to the combination of legal and technology needs that are continuing to arise in the financial services industry. But the variety of institutional knowledge and process-oriented skills required to solve challenges facing the financial industry may be too great for firms, even ones developing innovative technology, to handle alone.  

Case in point: Last week, Dentons and business process management provider eClerx Markets announced they were entering into a partnership that would combine the law firm's legal expertise with eClerx's technology to meet financial services client needs around data extraction, document digitization, document negotiation, customer outreach and legal expertise.

But with both Dentons and its collaborative innovation arm NextLaw Labs no stranger to technology, why seek an outside partnership? Luke Whitmore, a partner at Dentons, indicated that there are some tasks or skills related to finance that don't lend themselves to the talent traditionally found inside firms, such as generating multiple contracts very quickly, distributing large volumes of email or generating highly detailed trade transaction reports.

Attempting to solve the problem by simply bringing technology in-house isn't always effective, largely because the internal skill gap around how to successfully operate such products continues to persist. "I think one of the mistakes that law firms have made over the last five years is being very keen on buying tech, but then not actually being able to adapt and flex that technology to meet the kind of precise requirements of a particular client," Whitmore said.

He argued that specialized providers can respond to client needs around tasks like data extraction in a more efficient and cost-friendly manner. E-Clerx, for example, can automate the process of finding specific clauses inside contracts and then mining the relevant data points.

To be sure, process management companies in the financial services market also have something to gain by allying themselves with a law firm.

Bhavin Patel, associate principal at eClerx, noted that experienced attorneys familiar with the regulatory landscape can help construct the legal framework or structure by which a problem needs to be solved, while technology is the mechanism by which that design is executed.

"There's lots of great tools out there and lots of great technologies. I think the problem that a lot of fintechs have is they don't necessarily have the legal expertise to solve the problem front to back. And so I think partnerships like this help solve that issue," Patel said.

Those partnerships don't necessarily have to be limited to financial services. Whitmore at Dentons believes the amount of regulatory change the financial sector has experienced over the last decade made it a natural starting point for legal and tech collaboration as institutions looked to tackle challenges like LIBOR.

But similar regulatory challenges stemming from the likes of the General Data Protection Regulation (GDPR) and Brexit could lead to more law firm collaborations with outside process management providers down the road if attorneys can get over their initial skittishness.

"I guess there's probably still some nervousness probably in the larger law firms to partner up. Maybe they think that they are giving away house secrets," Whitmore said.