How LegalTech can Change the Legal Industry, One Efficiency Platform at a Time

    During the course of my nearly 25 years in the legal industry, a large portion of which has been spent innovating via leading alternative legal services provider, ZentLaw, I’ve always been drawn to change and innovation within the industry. This is why I created ZentLaw Labs, a division of the company focused on building and incubating legal tech solutions. Over the years a specific focus of mine has been the use of legal technology to improve collaboration and knowledge sharing in firms both internally and with outside stakeholders.

    When we launchedLawDesk360, a cloud-based, artificial intelligence powered collaboration platform that gives a comprehensive view of what is relevant to the work on team members’ desks, I wrote extensively on the importance of collaboration platforms in our industry. The reception was lukewarm but since the global pandemic, the acceptance for this concept has grown significantly. Specifically designed to facilitate the nature of the legal workflow cycle, the platform provides tools and functions that support work at various stages of a matter – from initial assessment to creation and collaboration to resolution and closure.

    You may be asking yourself, “How can a LegalTech product change the legal industry?”

    This is how- one product, one idea, once concept can change the industry. I have been at this for years pioneering new business models, methodologies and thought leadership and have seen time and again that the lukewarm reception first received is never the accurate barometer for the change that will ultimately come to fruition.

    Challenges

    As many of us know all too well, true collaboration in law has long been stifled for a very long time, thanks to a deeply rooted, career-long indoctrination process.

    “Law schools teach students to avoid mistakes rather than to search for creative solutions,” says Mark A. Cohen, CEO of Legal Mosaic and Distinguished Fellow at Northwestern University Pritzker School of Law. In that Forbes blog, Cohen writes that the process continues in private practice where measures for success are hours billed and revenue generated as opposed to offering creative solutions for clients. “Collaboration with other firms and legal service providers is widely resisted and regarded as lost revenue,” continues Cohen. “As a result, lawyers are trained to be insular and inward-facing, not multidisciplinary and collaborative.”

    Real-life observations, however, have shown me that in order for legal work to get done accurately and efficiently, lawyers need to have a steady stream of information exchange and knowledge sharing.  Having operated multiple businesses over many years in industries outside of law, I have experienced firsthand how productive a collaborative team can be and the benefits of facilitating collaboration as a leader. In order to shape decisions, colleagues need to share information about a transactional matter and be able to access best practices of what was done on a prior, similar matter. Even something mundane, like when a person goes on vacation and someone has to step in and cover their matter, can upset the information flow. It’s challenging to have that person to take over another’s work seamlessly.

    Such exchanges and collaborations in the legal universe are happening all the time, but are ad hoc—in-person or one-to-one email exchanges are most common. With the advent of email as the primary information-sharing method of choice, people’s inboxes have become inundated and often unmanageable and inefficient.  In fact, more than 60% of legal professionals said administrative tasks like organizing emails were their biggest source of frustration at work.

    What’s more, achieving proper context, communicating concisely and efficiently collaborating on complex legal matters with colleagues and clients in email strings is at the very least inefficient or at the most cause an issue.

    While email may be here to stay, how can we explore, search, find and use the information we need from colleagues quickly and efficiently to get work done?

    Before the global pandemic, collaboration seemed like a ‘nice to have’ for most lawyers content on doing things their own way year after year. Since the pandemic, legal teams have found that tech-enabled collaboration is a ‘must have’ in order to keep pace with workflows and clients that move at the speed of now.

    Solving the Contract Conundrum

    As an example, take the important task of contracting (if you’re in-house) or transactions (if you’re at a firm). Every in-house legal department is trying to wrangle the contracting beast that is all of the company’s in-bound and out-bound contracts for everything every bought or sold. Similarly, every law firm is trying to deal with how they can manage transactions for clients efficiently to avoid burning out their personnel and running up a client’s bill.

    Collaboration is inherent to the contracting and transacting process with multiple stakeholders, including attorneys, outside counsel, accountants and other legal professionals, weighing in, escalating requests, and answering questions. The time spent on a typical contract averages about 40 hours according to the International Association for Contract and Commercial Management, with work divided amongst legal, procurement, operations, project management, finance and compliance professionals. Furthermore, businesses lose an estimated 9% of annual revenue from ineffective contract management. The time spent on a typical contract averages about 40 hours according to the International Association for Contract and Commercial Management, with work divided amongst legal, procurement, operations, project management, finance and compliance professionals.

    Whether in-house or at a firm, the vast majority of this effort takes place over email requiring attorneys to spend precious time sifting through their inbox, shuffling tabs and searching folders. These tasks add up to a lot of churn when multiplied across the many contracts that an in-house legal department or their law firm services which, collectively, create drag on the contracting process.

    New collaboration technologies like LawDesk360 enable what I call “collaborative contract management” or “CCM,”  which solves the problem by taking a disjointed and disorganized process and integrating it into one platform. The ability of CCMs to improve productivity and workflow can help cut unnecessary time and cost in this area.

    After introducing the term CCM via a piece I wrote on Corporate Counsel a few years ago, the response to the piece was overwhelming.  Legal industry thought leaders such as Bernadette BulcanStarin exclaimed “Collaboration is key to CLM success. CLM Tech optimizes and strengthens relationships (with both external business partners and internal stakeholders). And, when deployed collaboratively and enterprise-wide, truly unlocks the hidden data and insights– across business units and divisions, geographies.”

    Bottom line: email is not an effective, efficient collaboration tool, and the contracting process or transaction handling are prime examples. When people are not collaborating and sharing information, it can result in costly delays and mistakes.

    New Advancements

    The trend towards the creation of a more efficient means of collaboration and knowledge sharing has been driven by two developments: the continued rise of remote work, and the advent of social communications platforms.

    In 2018 nearly 4 million U.S. employees worked remotely at least half the time, an astounding increase of 115% since 2005. It has become clear early on that whether workers are toiling at home, at a shared workspace or even a coffee shop, this new, remote and flexible workforce would require access to new platforms to make on-the-go communications easier.

    This new level of demand has given rise to collaboration platforms powered by new technologies. There’s no doubt that people have become more comfortable with alternative ways of connecting with friends and colleagues. The corporate world has steadily implemented the use of collaborative platforms to communicate, and it appears to work:  In a 2017 McKinsey study, corporate executives reported that social tools had increased employees’ ability to communicate more freely and to self organize with members of their teams.

    For enterprise, these social tools have evolved into workflow platforms. While the use of such tools across industries is growing, the legal industry has lagged behind. I see a couple of reasons for this: First, legal professionals often don’t have time to invest in becoming tech savvy. They’re busy helping clients, and just don’t have the time to learn how to use new platforms. Second, many of the platforms that exist in the industry today are clunky, counter-intuitive and require much training.

    Clauses in the Cloud

    In recent years, though, legal tech has moved towards agile and easy-to-use applications, with no training required.

    An important driver of this is the adoption of cloud computing. Although McKinsey finds that enterprise cloud adoption is only about 20% at present, it’s expected to accelerate rapidly until most organizations will be in the cloud sooner rather than later.

    Meanwhile, the use of cloud-based encryption and cutting-edge authentication security controls is alleviating data security concerns related to the cloud. The benefits of the cloud for legal organizations are many: besides the cost savings advantages, there’s improved mobility – applications and data are available to people no matter where they are in the world – and increased collaboration, as dispersed groups of people can meet and share information in real time, via shared storage.

    Advent of AI

    Perhaps the most intriguing and promising feature in these new platforms is AI-powered search. In order to work at an optimal level, AI requires massive amounts of data, which makes the legal industry a natural for AI adoption.

    In LawDesk360, for example, AI is built into the clause and search engines. Through machine learning, for example, certain sole remedy language can be linked with related indemnity or warranty clauses. Making these connections is important in law: as one section of a contract is touched, there’s a ripple effect to other parts of the contract. This type of learning doesn’t happen overnight. It will take lots of data and time to make these links.  But the payoff will be massive: legal professionals will be able to refocus their time spent on mundane tasks like search and making updates and instead invest their time in higher value tasks.

    Technology is Transforming the Legal Industry

    Together, these cutting-edge technologies have resulted in secure and sophisticated, yet easy-to-use, workflow efficiency platforms that facilitate communication, knowledge sharing, and negotiation of a wide variety of legal matters.

    Such platforms help to avoid unnecessary churn, waste and inefficiency in and across organizations.  This can also benefit legal specialties where matters must be tracked and handled from start to finish, as in the aforementioned contracts.

    “The ultimate goal of legal technologies is to streamline operational and administrative activities as much as possible,” says Stephanie Corey, cofounder of legal strategy and operations consulting firm UpLevel Ops. “Collaboration tools can play a large part in reaching this goal.”

    I was excited about the release of LawDesk360 at the time and I’m just as excited about the future of legal tech, its positive effect on collaboration and workflow, and its adoption across the industry. LegalTech can drive the industry forward and it’s happening right now. There’s much to look forward to including further advances in AI, blockchain technology and quantum computing that will continue to exceed what is possible today.

    About the Author

    Monica Zent is an experienced entrepreneur, investor, businesswoman and trusted legal advisor to leading global brands, over a period that spans decades. She is the founder of leading legal services company, ZentLaw and its innovative ZentLaw Labs. She is also the founder of LawDesk360, the workflow efficiency platform for legal departments and law firms. Zent is an investor in real estate and start-ups. She dedicates much of her time and talent to various charitable causes. She is a diversity and inclusion advocate, inspiring all people to pursue their dreams. When she’s not running companies, Zent runs distance as an endurance athlete.@monicazent

     

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