Conclusion
The future of Legal is in technology. Legal can only run as a business if effective IT tools and processes are used. This does not only apply to large corporation, but it is even more important for small companies without legal departments.
For these companies—which form the majority of businesses in all major economies, Legal Tech will be the key to run their legal affairs as any other business processes even without having an inhouse legal function. Legal Tech will enable small companies to effectively tackle the challenges they are confronted with today and in the near future. Providers of Legal Tech solutions will benefit from this disruptive innovation. One example for the attributes of a successful Legal Tech solution for SMEs is a digital legal department. There will be many more Legal Tech products that will effectively solve the needs of lawyers, clients and companies.Legal Tech will change the way Legal is done in the future, for inhouse legal departments, small companies, lawyers and other legal service providers.
Liquid Legal Context
by Dr. Dierk Schindler, Dr. Roger Strathausen, Kai Jacob
With his article, von Alemann covers a huge gap that often occurs in the public debate about the transformation in the legal industry. Typically big law firms and large companies with sizeable legal departments lead the discussion and are subject to research—while there are thousands and thousands of small and midsize enterprises (SME) that form the backbone of the economy and that only have a very small legal inhouse function—or do not employ lawyers at all.
For SMEs, legal management contains a much larger degree of vendor management, i.e. dealing with optimizing the value that can be obtained from using external legal service providers, traditionally outside counsel. Contrary
(continued) to many, von Alemann expects the rapidly materializing opportunity to replace bespoke and customized legal advice by standardized technology to play out in the area of the SMEs as well.
The legal budget is lower in the first place and thus the economic pressure to embrace new opportunities is higher. At the same time, the barrier of non-lawyers talking to (external) lawyers in order to resolve a legal issue in a business oriented manner is even higher— what an opportunity if that could be resolved by means of technology!So what would be the optimal technology-based solution for SMEs with a small—or even no—legal department? According to von Alemann, it is what he calls a “digital legal department”. The whole user interface needs to take into account that non-lawyers, who do not know the legal jargon nor want to dive deep into legal theory, are using it. Natural language processing (NLP) and speech recognition will enable the system to understand the customer’s request and contact the customer for additional details.
This is actually quite intriguing even for a “large company” legal manager: what if your team could literally “talk to” technology that would then translate the request, connect it to the sources in which or by which the solution can be found, and comes back once the solution has been generated? What helps SMEs to cope with legal demand in the first place is an enormous lever for efficiency and cost effectiveness for more sizeable legal departments.
Adding the enormous combined buying power of the SMEs in the legal industry to the opportunity technology provides to them, easily translate into a big economic threat to the business models of law firms. This is why Meents and Allen, representing one of the big law firms, view transformation as a call to action to define value in a new way that goes far beyond the “cost lense”.
References
Callier, M., & Reeb, A. (2015). The industrial age of law: Operationalizing legal practice through process improvement. Oregon Law Review, 93, 853-925.
Christensen, C. M. (1997). The innovator’s dilemma. Boston: Harvard Business School Press.
Galbenski, D. J., & Barringer, D.
(2013). Legal visionaries: How to make their innovations work for you. https://www.amazon.com/Legal-Visionaries-make-their-innovations/dp/1484075366.Hartung, M., & Giirlner. A. (2015). Das “More for less”-Paradox. Deutscher AnwaltSpiegel, 25, 15-18.
Ribstein, L. E. (2012). Delawyering the corporation. Wisconsin Law Review, 2012, 305-331.
Susskind, R. (2013). Tomorrow's lawyers: An introduction to your future. Oxford: Oxford University Press.
Zahra, S. A. (2005). Entrepreneurial risk taking in family firms. Family Business Review, 18(1), 23-40.
Dr. Sven von Alemann is an attorney-turned-entrepreneur and founder of early stage Legal Tech startup rfrnz, which provides contract analysis based on Artificial Intelligence techniques like machine learning and deep neural networks. He is an experienced attorney in IT/IP law. Before founding rfrnz, Sven held positions as Associate at the law firm McDermott Will & Emery, Legal Counsel at Fujitsu and Senior Legal Counsel at SAP Hybris. Sven obtained an LL. M. from the University of Christchurch (2003), his Ph.D. from the University of Hanover (2008) and an Executive MBA from the Technical University in Munich (2015).