Technology vs. LPO: Compatible or Opposing Trends?

It is indisputable that developments in enabling technologies are reducing the need for manual labor in legal services and speeding up their delivery. These include: predictive coding, automated contract abstraction, deal rooms, e-billing software, data analytics, ever-more sophisticated search and knowledge management tech­nology, and document assembly.

Back in 2004-2006, it was technology that led to the advent of LPO by enabling offshore locations to interact with clients thousands of miles away. It is the LPO industry that has since continued to embrace and incorporate technology into virtually every element of its legal services delivery offerings, including assisting and advising corporations and law firms on the selection and implementation of labor-saving technologies. It is the LPO industry that now pushes the envelope to redefine the art of the possible, providing expert consultants who weave together advanced technologies as part of an overall legal process transformation. A few examples below aptly illustrate how LPO providers are achieving this.

Litigation The days are quickly fading in which, as part of the e-discovery and document review process, huge teams of attorney reviewers tackled hundreds of thousands—or millions—of seemingly unfiltered documents. Some industry commentators would have you believe that there is a battle for supremacy between advocates of inefficient, overly costly manual document review and the knight in shining armor that is technology assisted review (TAR), but this has little consider­ation for practical realities. The leading LPO providers have long been proselytizers of TAR workflows and have been constantly developing, testing and refining these very workflows to deliver smarter and less costly review processes.

The choice for corporate clients is no longer “should I employ a TAR workflow?” but rather “when should I employ it, and which combination of technology and workflow best suits my needs?” Utilizing these tools is not always about reducing the size of the overall document corpus or finding the proverbial smoking gun. In fact, LPO providers deploy these technologies in a variety of ways, such as to support a quality control process. The LPO industry, being both techni­cally proficient and oftentimes technology agnostic, is well-placed to provide the insights their clients need to choose and deploy these technologies wisely.

Contract Lifecycle Management (CLM) For many corporations, the traditional model for contract lifecycle management is both labor-intensive and cost- prohibitive. Often, there are no formalized processes, standard templates, accepted language, back-up provisions or guidelines for turnaround times for CLM workflows. However, by using Lean and Six Sigma techniques to reengineer contract review processes, applying best practices and flexible resources, and optimizing the mix and utilization of technology, the LPO industry has led the way in CLM transformation.

The different CLM software platform providers offer varying degrees of func­tionality, including searchable repositories, clause libraries and workflow commu­nication and obligations management, with dashboards that provide customizable views and reporting capabilities. These platforms can facilitate effective communi­cation and collaboration between those involved in each step of the contract creation, review and negotiation process.

The degree of sophistication and functionality, and the associated cost of implementing the technology, varies dramatically across CLM platform providers. The role of LPO providers is to be the conduit to the efficient and appropriate utilization and implementation of these technologies. Whether through customizing their own proprietary CLM technology or by partnering with best-of-breed third- party providers, LPO providers work with corporate legal departments to help them understand which platform is the best fit for their environment, budget and toler­ance for change.

Contract Review and Data Extraction The LPO industry is also at the forefront of technological innovation in contract data extraction and migration. Often trig­gered by the implementation of a CLM platform, or following an acquisition, or as a response to an audit, corporations can be faced with the need to locate, review and then extract information from thousands of contracts. LPO providers employ subject matter experts, who in addition to the requisite legal training, also possess a comprehensive understanding of the applicability of the range of technological tools available that can support such an engagement.

The first consideration for a contract review and data abstraction project should be to determine whether technology can assist in the process. While historically the process of extracting data from volumes of contractual documentation has been a manual one, this is no longer the case. There are tools that can be utilized to locate and collate contracts stored on hard drives, file shares, network drives and various software platforms. Once contract files are found, these tools can index them and render any text fully searchable using optical character recognition (OCR) technol­ogy. Then, the information important to the client needs to be extracted from each contract. Automated meta-data extraction and categorization technology can be used to speed up this process and reduce the costs associated with traditional manual contract review. This technology auto-triages contracts based on certain business rules (e.g., the exclusion of expired, duplicate, unsigned or immaterial contracts), groups like-contracts together and prioritizes the most critical contracts for review before automatically extracting the metadata.

Legal Spend Analytics This is another example where LPO providers are leveraging technology to support a more cost-effective and re-engineered delivery of legal services. Data analytics technology, incorporating specialized visual techniques, can facilitate the analysis and presentation of historical and ongoing e-billing data to help a legal department achieve overall legal spend reduction. Although some software companies operating within the legal spend analytics space offer stand-alone analytics services, the more innovative LPO providers are offering consultants, expert in the delivery of cost-efficient legal services, who can organize and interpret this data in support of overall legal process transformation. By digesting, analyzing and then presenting (in a dashboard format) the intelligence gleaned from legal invoices, it is possible to benchmark outside counsel and vendor performance. With access to the right data, one can create business intelligence reporting and management information that provides in-house legal and finance teams with updates on outside counsel spend, breakdowns of matters by firm, practice area and timekeeper, as well as savings opportunities, performance against budgets, benchmarking and many other key metrics.

Knowledge, as they say, is power, and by utilizing software-enabled data analytics and dashboard reporting, corporate legal departments are empowered to revisit the entire gamut—the identification, selection, retention, management, cost and evaluation—of their relationship with outside counsel and other legal services providers. The end-game is one where resource allocation planning is optimized, ensuring that the right technologies and the right legal professionals, based on a combination of expertise, cost and availability, are assigned to the delivery of the requested legal services, given the type and complexity of the matters at hand.

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