The eight minute and forty-six second murder of George Floyd that we all witnessed in 2020 opened America’s eyes to acknowledge systemic racism. The aftermath reignited conversations around racism, discrimination, and implicit bias in the workplace. The legal profession has used this time as an opportunity to train staff and attorneys, reaffirm policies against workplace discrimination, and increase diversity initiatives. These acts are indeed necessary. But behind the cloak of formal policies remains the deep-rooted implicit bias and microaggressions directed toward black attorneys every day, especially when it comes to staffing cases and providing opportunities to take on lead roles in important matters.
There is no doubt that systemic racism and implicit bias exist in the legal profession. Several years ago, for example, a study conducted by the consulting firm, Nextions, provided empirical evidence of implicit bias against black attorneys. Two versions of a legal memo containing the same number of errors were circulated to law firm partners participating in the study. The only difference between the memos was that the participants were told that one was drafted by a white associate and the other a black associate. The exact same memo averaged a 4.1/5.0 rating for the white associate’s memo accompanied with encouraging comments such as “generally good writer but needs to work on …,” “has potential,” and “good analytical skills.” The black associate’s score? He averaged only a 3.2/5.0 rating accompanied by more negative feedback: “needs lots of work,” “can’t believe he went to NYU,” and “average at best.”
Is this same implicit bias diminishing black attorneys’ role on cases? Opportunities to lead and try cases or argue motions before courts are critical for any attorney’s professional development and advancement. And while these opportunities are hard to come by for younger associates, in large part because senior and more experienced partners are slated, or because such decisions are largely driven by client demands, these opportunities seem even rarer for black attorneys, especially young, black associates. As a law clerk at both the federal district and appellate court levels, I witnessed how black attorneys were rarely given a speaking role in motions hearings, trials, or oral arguments. Some of this I attributed to the alarmingly low numbers of black attorneys in major U.S. law firms. Indeed, in 2020, the National Association for Law Placement (“NALP”) reported that only 5.1% of associates and only 2.1% of partners in U.S. law firms are black. These numbers were worse for black women who made up only 3.04% of associates and 0.8% of partners! But even with these low numbers, I wondered if there was more to the story. Why is it that black counsel has a “seat at the table” but not a lead, speaking role? Is it not important to provide these opportunities to black attorneys who not only need the experience but can add value to the case? Does the court or the jury take notice of this disparity? If so, what can we do to fix it?
To answer some of these questions, I interviewed the Honorable Gerald Bruce Lee, retired U.S. District Judge of the United States District Court for the Eastern District of Virginia, for his view from the court’s perspective. Over the course of his more than 25 years on the federal and state benches, as well as his prior experience as a trial lawyer, Judge Lee has encountered more than his fair share of attorneys and firms and has seen first-hand how younger, and arguably more knowledgeable, attorneys are “benched,” particularly black attorneys. In his view, “systemic racism is the answer; it remains a problem.”
We must “be very conscious of systemic racism that exists,” Judge Lee said, and “we have to end the ‘mirrortocracy.’” In other words, we must stop choosing to only work with someone who looks like us. Judge Lee suggests that firms and partners “pick a black associate that you want to work with and put that person to work. Give them the same coaching and mentorship that you would give someone that looks like you,” he said. Not just on one case either, he said, “work with them on 10 cases and see what happens.”
And “it’s not just for social justice reasons,” Judge Lee added. “We are creators, we are innovators, and we can think outside the box, and you need to give us a chance to do that and improve the quality of work that is being done and to create the results that are being attained.” Judge Lee said that judges “think young, black associates have ideas” because “young, black associates have had to improvise and have had to learn how to think creatively on their feet.” To him, “it seems that to have someone as gifted and talented as some of these young, black associates are, who have overcome many obstacles and have many good insights, and not to use them is like wasting resources that you’ve acquired.” He asked, “Why would you waste resources? Put your resources to work.”
Judge Lee “enjoys seeing young, black lawyers come into court who are doing more than carrying a briefcase” because he knows that “if the black attorney’s name is on the brief, then there has been some opportunity for the lawyer to communicate to the partner about the brief.” But many black lawyers are not being given a chance to argue cases, which contributes to a lack of preparedness and the professional development they need to become partners. Judge Lee is not alone in his eagerness, noting that “black and white judges want to see young, black associates at the podium, questioning witnesses, and arguing motions.” “It is time to get your black attorneys off the bench and in the field. What better time than now to acknowledge that you are going to fully use your black associates and partners?,” he asked.
Giving black attorneys more leading roles in the courtroom can also have a positive impact on the case. Judge Lee emphasized that “the days of all white judges and juries are over.” When asked what effect black attorneys have on the jury or the court, Judge Lee said, “the first thing it adds is talent and resources,” but he added that “it could also make a difference in how the jury reacts to the trial.” For example, he said, “if a jury sees a black lawyer sitting there and there are minorities in the jury and they only see that person pass paper, then they know that person is ‘window dressing.’” And from the court’s perspective, he said, having black attorneys in lead roles can also “make a difference in how I view the case from the standpoint of how it was managed and the case was being presented.”
I asked Judge Lee for any final advice for black attorneys looking for opportunities to improve and expand their skill set. He suggested that we continually seek out the work we want and “be persistent.” As a young lawyer, Judge Lee always told himself that the answer “no” was just “the beginning of the conversation, not the end of the conversation.” If partners or clients turn you down the first time, he said, use that as an opportunity to follow up again until they say “yes.” Eventually, he said, “they’ll get tired of you and give you the work.” Use that opportunity to thrive.
Lawyers across the world like to talk about rubber stamping things, even though few who qualified in the last 15 years will have seen a rubber stamp let alone used one to certify a document. But, as we found out speaking to GCs across Asia Pacific for this special report, when a lawyer in that region talks about rubber stamping something, they often mean it literally.
‘Most documents I deal with require physically stamping,’ lamented one Indian GC. ‘Even if you want to automate some part of that process in the end you will need to get a stamp. That means a trip to another office, a taxi ride somewhere else in the city, a long wait in a queue. All to get that piece of paper stamped.’
India may be notoriously bureaucratic, but the problem was far from unique to that country. GCs from Japan, Korea, Indonesia, and even ultra-efficient Singapore told us of cultures rooted in face-to-face contact, deference to senior decision makers and established hierarchies. As a result, even that simplest of legal technologies, the electronic signature, had failed to take root.
The obstacles facing GCs who wanted to introduce technology felt unmovable. Until a pandemic hit. After nearly a year of lockdown, businesses across Asia have embraced new ways of working.
To understand just how much lawyers have adapted to tech in these strange times, GC magazine teamed up with World Services Group to survey over 100 of Asia Pacific’s leading general counsel. We asked them about everything from the impact of Covid-19 on the legal team’s efficiency to their use of AI, how they find the right software (and the money to buy it), and their expectations of outside counsel when it comes to technology.
We found evidence of a region that is almost uniformly embracing technology, a region where even the most entrenched cultural habits may be coming to an end. But let us not get carried away.
Any discussion of how GCs in the Asia Pacific region are using legal tech is liable to fall into the trap of focusing on culture first. Certainly, this special edition shows much evidence of country-specific traits that are restricting or encouraging the use of technology, but it also shows that GCs the world over are facing the same issues when it comes to technology.
Broadly, there are three steps involved in the acquisition of legal tech, all of which are things lawyers have historically struggled with: Knowing what’s out there; understanding and benchmarking the capabilities vs the cost, and convincing the business that it is going to save time and money. Until GCs get to grips with these procurement-driven approaches to buying technology their successes in finding suitable platforms is likely to remain limited.
On behalf of all of World Services Group, I am delighted to welcome you to the third edition of our GC special reports, looking at the importance and impact of technology on the legal profession.
This issue of the report is indeed a timely one, as at no point in our professional lives has the profound effect of technology been more evident. Since the onset of the pandemic, private practice and in-house counsel alike have universally transitioned to new ways of working largely driven by technology, demonstrating on one hand the adaptability of the profession, while on the other, dispelling tired notions of lawyers as technological luddites.
As the legal leaders featured throughout the report illustrate, innovation – particularly as it pertains to technology – is apparent in every corner of the profession. Just as we saw in the first two editions, neither budget nor business size need to be obstacles to innovating, with much of the counsel-driven development originating from little more than an idea and an opportunity.
Yet as we celebrate the shared successes seen across the legal industry, we must remain cognizant that innovation is a journey on which we will never reach a final destination. And with evolution emerging from every corner, it would be all too easy to rest on our collective laurels instead of continuing to build on the progress made. So, while we look on at the innovators and their accomplishments detailed throughout the report, we should also consider what we can do to foster and facilitate the emergence of the next wave of visionaries, set to take the profession further still.
Here at World Services Group, we want to embody the change that we advocate for. As an organization, we have seen that investing in technology, talent and corporate sustainability best practices that foster social and economic development are essential elements for ongoing business success – all of which represent key commitments I have made for my tenure as Chairman in 2020-21. By taking a strategic approach to our proprietary digital platform, empowering emerging leaders across our network, as well as improving training and accessibility to technology for all our membership, World Services Group is committed to ensuring that we are properly prepared to capitalize on the growing wave of technological innovation, for the benefit of both our members and clients.
In closing, I’d like to thank all of those in the legal community who contributed their thoughts and insights as part of the research for this report. By sharing your own lived experiences along this journey, I have no doubt you will help to shape and inspire the coming generation of leaders and innovators, set to once again disrupt the idea of what it means to be a lawyer.
What have we learned since March 2020? For Amar Sundram, head of legal at RBS in India, it is that talk of lawyers being an uncreative species was greatly exaggerated.
‘We are now seven months into the pandemic and the main myths about lawyers have been broken. The myths that we are not adaptive, that we do not take risks, that we are averse to technology – they have all disappeared. Lawyers have found that, when faced with necessity, they can take to new tasks as well as any other professional group.’
Our survey of over 100 of the leading counsel across the Asia Pacific region showed that less than a fifth of legal teams (18%) felt their output was significantly affected by the pandemic, though the bulk of respondents (73%) had experienced some level of disruption.
For many legal teams, the pandemic was an unexpected experiment in working remotely. While over half of legal teams (59%) had a prescribed remote-working policy in place before the pandemic hit, and almost all (95%) felt such a policy was necessary, this was scant preparation for having the entire team work remotely for weeks at a time.
Marcus Clayton, general counsel and company secretary at leading Australian integrated construction materials producer Adelaide Brighton Cement (Adbri), reflects on the early days of lockdown:
‘With a very lean team to start with, working from home through COVID-19 and splitting the legal team into Team A and Team B made it much harder to produce the expected outcomes, [particularly as] demands increased. We were all to work longer and harder in difficult circumstances to achieve a lesser product than before.’
Many survey respondents pointed to a similar problem, noting that in the early days of lockdown they had been expected to meet more challenges with fewer resources. As one respondent, a legal director working at a large industrials company in Singapore, commented:
‘While demand for regular commercial advice has tailed off somewhat, we have had to contend with an increased number of requests for regulatory advice. At the same time, there has been a huge increase in the number of online meetings, with some of these taking up the entire day. Managing this challenge of growing demand under such unusual circumstances has been particularly difficult.’
Others pointed to the lack of connectivity in the legal team, and the difficulty of ‘discussion, deliberation and evaluation of the finer points of a matter’ while working remotely. Some felt that the organisational support for remote working was still lacking, with one Hong Kong-based general counsel at a consumer electronics company commenting:
‘A documented remote working policy has worked well for us. However, it will only work if home infrastructure allows employees to work remotely. It is more than simply providing a laptop. This has not been a problem with the lawyers in the legal team but has been a problem with support staff.’
The A and B Team
While talk among GCs has turned from “business resilience” to “business resurgence”, few expect their return to normal to be synonymous with a return to the office. Staff may be returning on a team by team rotation, but a growing number of companies have started to think about how they can operate a remote working policy as their default setting.
To do this successfully they will have to deal with the issue of cyber security. As Pulin Kumar, senior legal and compliance director at adidas India, notes:
‘In today’s environment a lot of things are system driven, and once you have a system driven environment then everything has to be connected. It is almost a given that for remote working to succeed information must be highly accessible. The data will flow to far more places and people, so the security checks in place need to be robust. This is a matter for IT teams, but it is also a matter for legal and compliance teams. Employees’ understanding of compliance has to be updated to account for the mass shift we are seeing toward working from home.’
Respondents to our survey echoed this, pointing out that remote working had exposed their companies to enhanced cyber security risks. Over a third (36%) felt the biggest risk came from loss or theft of confidential business information. As one GC commented, ‘Sensitive data and applications are now being accessed through non-secure networks. Businesses need to give this some more thought, and will likely have to invest more time, effort and money to strengthen their IT infrastructure.’
Of course, when it comes to new ways of working, not all legal work is created equal. Work involving insurance claims relating to physical infrastructure, anti-bribery and fraud investigations, or due diligence in the context of an M&A where virtual data rooms are required are all exponentially more difficult to do remotely. As Nancy Wei, associate legal director of Skechers China comments: ‘Remote working is really helpful non-litigation scenarios. For litigation issues, I tend to choose face to face meeting to discuss the facts of the case and collection of evidence.’
A pandemic in numbers
But perhaps we should not dwell on the negatives. One of the most surprising things about the lockdown has been the ability of many businesses to function as normal. Likewise, legal teams have managed to weather the storm successfully. Nearly a third (27%) of respondents to our survey felt their efficiency had improved, while a similar number (24%) said their output had in fact increased. Being on call 24 hours a day does have some advantages….
Another positive has been the invigorating effect remote working has had on legal teams. As Amba Prasad, vice president and head of legal services at Indian construction and engineering conglomerate Larsen & Toubro comments:
‘COVID-19 has shown that the remote working can be efficient despite the challenges of management and the interplay of work related to teams based in different locations. Scaling up our technological infrastructure in a timely manner aided this transition.’
Aside from helping the legal team find new ways to operate efficiently, he continues, the pandemic has had other benefits. ‘It has brought the team together in a manner that was never before seen. Caring and sharing between team members has really become an embedded practice.’
This much is clear from our survey. Fully 31% of those we spoke to said employees within the legal team were happier with their current out of office setup.
While most GCs felt remote work had been a positive thing for the legal team, there are questions of whether the same established structures can endure over the longer term. Bernard Tan, Asia Pacific managing counsel at Agilent Technologies, comments:
‘I don’t think there is an immediate negative impact to productivity as we have the necessary working culture, processes and technical infrastructure that enable work to continue on a remote basis. The concern is more about long term engagement issues and whether, as a legal team, we are able to continue to exert the necessary influence and engagement with internal clients if we work on a 100% remote basis perpetually.’
The solution to this ongoing question will likely involve increased spending on technological infrastructure and enhanced cyber security protocols, but it will equally depend on the approach taken by lawyers. As Nancy Wei concludes:
‘It is going to be a case of legal teams learning new and more flexible ways of doing things. We need to communicate more efficiently and effectively, especially when facing up to balancing business opportunity and risks. Trust among team members is going to be very important in facing up to this uncertain situation.’
With nearly three quarters (73%) of respondents saying the expect remote working to increase over the coming months, pressure on GCs to find ways of dealing with uncertainty is going to be with us looks set to become the new normal.
‘If I’d lived in Roman times, I’d have lived in Rome.’
John Lennon’s famous words when asked by a journalist why he was living in New York, then the cultural and economic centre of the world. In 2020, a growing number of tech investors that have relocated to Beijing are giving a similar answer.
President Xi Jinping has outlined a plan to make China a world leader in advanced technologies, investing more than a trillion dollars into key industries. Even without this state support, the country’s tech sector is on an upward swing. Investment in its artificial intelligence (AI) sector for the first half of 2020 has already surpassed US$9bn, making China one of the leading global players in the field.
Following China’s lead, tech companies across Asia have seen a boom in investment. Many of the region’s fastest growing businesses – Hong Kong’s WeLab, Singapore’s Synagie, India’s GoBolt – are led by charismatic, tech-savvy entrepreneurs.
The region’s legal industry, often seen as a bastion of conservative values, is now waking up to the challenge of technology. Singapore now houses one of the largest legal tech accelerator programs in the world, Chinese courts have become world leaders in the use of technology, and even less mature markets have turned to technology as a way of bypassing their stretched legal systems.
To find out why the region is proving to be such a fertile ground for legal innovation, and how this is impacting in-house counsel, we spoke to general counsel who are making the most of legal tech.
States across Asia Pacific are jostling for position, with substantial sums being spent by governments aiming to achieve legal technological pre-eminence. Already, legal tech initiatives region-wide have ridden on the crest of this wave. For example, Indonesia has made amendments to laws affecting legal tech, for instance by introducing a list of certified Indonesian e-signature providers. India has huge domestic demand for legal tech as it looks to boost efficiency in what is still mostly a pen and paper legal system.
Increasingly, the more established corridors of business are looking to capitalise on this success. Stung by the rising number of high-profile tech companies looking to list outside the region, the Singapore Exchange (SGX) has started offering grants to help fast growth businesses cover the legal and regulatory costs of their listings. In a similar move, Hong Kong’s financial secretary Paul Chan Mo-po has set aside HK$50bn (US$6.5bn) in funding to support greater innovation and technology development in Hong Kong.
In April 2020, the Government of Hong Kong announced a HK$35m LAWTECH Fund to assist law firms and chambers upgrade their IT systems. As Jerrold Soh, assistant professor of computational law at Singapore Management University (SMU), explains:
‘Hong Kong’s approach is similar to Singapore’s in that it is driven by external demand, but their focus is more on the mainland China market, especially technology related to the Belt and Road Initiative (BRI). For instance, a comprehensive electronic dispute resolution, arbitration and mediation platform was constructed out of Hong Kong to assist the
Taken together, these initiatives suggest a regional trend, but the Asia Pafic tech market is anything but a unified field. It is, says Jerrold Soh, a market preoccupied with solving domestic rather than regional problems, and nowhere is this truer than in China.
‘Domestic demand is the key driving force for Chinese tech companies, many of which are not so much interested in attracting outside investment. They really are just building their own topologies, and the same rule applies in the
legal tech space.’ ‘There are so many new tech startups, firms and applications that are being built there. Not only are these companies becoming significant players, but they are changing the way we think about the law. You can have an entire dispute resolved on an app, powered by WeChat. That is something incredibly exciting in the legal field that is being driven by Chinese tech and innovation’.
While many of even the largest tech companies remain unknown outside the PRC, they boast user bases that would be the envy of a Silicon Valley unicorn. They are also becoming increasingly sophisticated, adds Ivy Wu, head of legal for Greater China at American business-to-business IT service provider DXC Technology.
‘In the time I have observed the development of legal tech in China, I have found that in both litigation and non-litigation products the technology has developed amazingly quickly. For non-litigation software – for example, for document management and review tools – Chinese technology is now more advanced than anything available internationally. There are suppliers focusing on contract management processes and internal process approval on legal documents which have proved to be very effective, as has software aimed at the record keeping of signed agreements.’
Nancy Wei, head of legal for Skechers China, says the rapidly maturing domestic tech scene offers legal counsel greater flexibility when it comes to resourcing legal matters.
‘We use a mix of both international and domestic Chinese technology in our team. For our database systems we use internationally known suppliers that have been active in the market for several years. However, for contract management we select local suppliers who may or may not have international experience, but who, in this area, tend to provide systems that are more user-friendly for the Chinese market’.
Kenji Tagaya, general counsel executive officer and head of the legal group at JERA, Japan’s largest power generation company, says it is common for large organisations to look to both domestic and international providers.
‘We introduced two [tech providers] for contractual review purposes, one English and one Japanese. I find this necessary as a Japanese solution is needed for Japanese-language documents and an international provider is needed for English-language documents.’
‘Some international companies also claim that they have Japanese language adaptability, but the quality is limited because of the nature of AI. Unless they process a huge amount of data, the AI will not grow to a level of capability that satisfies us.’
A home-grown revolution
It is not just the rise of domestic tech firms that is changing the way GCs operate. Increasingly, legal teams across the Asia Pacific region are looking to develop their own IT platforms before turning to external suppliers.
Carl Watson, general counsel for Asia at design and engineering consultancy Arcadis, underlines the value this brings to the legal team.
‘What I would say is that you don’t know what you don’t have until you look… There’s a whole volume of very helpful apps that you’re paying for anyway, but you probably don’t even know it; I’ve always been quite interested in what’s available and then optimising these sorts of technologies.’
‘Demonstrating value through use of simple technology tools to provide dashboard insight into what we’re doing [is] how I got the ball rolling in the very early days. I think it’s about building trust and identifying tools that were available without needing any great investment’.
Faz Hussen, general counsel and director of government relations at McDonald’s Singapore, has found similar benefits in harnessing existing technology within the legal team.
‘Using home-grown software has two main advantages. It is obviously much cheaper, and developing our own in-house software means that we can hedge on business costs as opposed to getting them signed off for external technology.’
‘Perhaps a bigger advantage is that internally developed technology can be customised to match systems we are already familiar with. That will ensure other business units can seamlessly work with the platform.’
Turning to the results of our survey of over 100 legal teams across Asia Pacific, it seems that this message has yet to find a mass audience. Only 9% of legal teams are currently looking internally to develop tech solutions, while 83% of teams are looking to tech vendors for readymade or bespoke solutions.
Technology and the legal profession in Asia-Pacific have long had a delicate relationship; while the potential impact of technology has long been understood – albeit oftentimes fodder for debate – its implementation and execution has, until recently, remained largely an academic exercise for most.
‘The practice of law is very much dependent on everyday life,’ explains Janet Toh Yoong Sang, partner at Shearn Delamore & Co.
‘With the growing use of technology all around the world, private practice law firms have been encouraged to use legal technology to keep up with the quickly changing nature of business and industry.’
But much like their in-house counterparts featured throughout the report, private practice lawyers have had to learn and adapt quickly to these new working habits brought about by the pandemic – including the toolsets which facilitate remote legal work. For many, this marks a sharp departure from established norms – with much of the profession in Asia-Pacific notoriously reticent on technology-driven shifts to legal practice. But for most in private practice, the global pandemic has meant that integrating technology has fast become a business imperative.
‘In-house clients are expecting that we have sufficient knowledge of the various technology tools available and how best to make use of them so that the successful delivery of legal services during the pandemic can be ensured,’ explains Zhuowei (Joyce) Li, partner at Han Kun Law Offices.
‘Many expect that social distancing measures will be central to commercial thinking for years to come, making the effective use of technology a vital component for maintaining business relationships and offering the best service to our clients.’
That experience echoes the results of the empirical research which underpins this report, with technology becoming an increasingly important factor for in-house counsel when assessing their law firms, with 59% of respondents reporting that a firm’s use of technology comprised a direct part of panel reviews and 68% saying that it was either very important or crucial that law firms remained abreast of new technologies. While some of that shift may be attributable to the short-term needs-driven innovation, few anticipate the uptake in technology to be a fast-passing trend.
‘As service providers, we are naturally driven by client demand, and that demand will push law firms like ours to use more and better technologies in the coming years,’ says Vinay Ahuja, Partner – Indonesia, Lao PDR & Thailand and Head of Indonesia Practice at DFDL Tax & Legal.
‘Since March we have seen just how much technology can facilitate legal work, and I do not think I will be the only person to predict this will become an established habit among all lawyers.’
Nonetheless, homegrown legal solutions are finding champions at the largest companies. Sheldon Renkema, general legal manager at top-10 ASX listed diversified conglomerate Wesfarmers, has worked to introduce a number of self-service tools into the legal department, including a non-disclosure agreement tool that allows commercial teams to generate and execute a compliant confidentiality agreement.
‘Our objective is to identify processes that our lawyers would otherwise do that are not particularly complex and not particularly strategically significant. And where we can, making use of a tool so that can be done within the business in a user-friendly way that manages the risk’.
Creating tech solutions internally can also act as a catalyst for the creation of a culture of open-mindedness and creativity within teams, which can pay dividends in other areas. As Bernard Tan, Asia Pacific managing counsel for US-headquartered analytical instrumentation manufacturer Agilent Technologies comments, ‘It is important that we don’t just follow corporate-wide technology projects. We need to create a culture of innovation and digitalisation within the legal function itself, and that means we need a sort of skunkworks for the legal team itself to develop and pioneer new tech.’
Chek-Tsang Foo, group deputy general counsel of NTT Limited, has followed this ethos, working with legal colleagues to create a suite of proprietary legal tech solutions, including a contract risk scoring tool for contracts. The next few years, he says, will be transformational for legal teams.
‘Legal tech will not just change how fast we work, but what we work on. As technology matures, routine and repetitive work can effectively be automated. This frees up bandwidth for internal lawyers to do more complex work that requires more creativity.’
‘It will allow us to spend much more time on things like negotiations, resolving complex matters and proactive legal risk management. The in-house team may also start to provide new areas of value to the enterprise, leveraging the legal team’s skillsets and attributes. The future is also what we create, with the help of legal tech. Perhaps technology will help solve the modern in-house counsel’s struggle for sufficient bandwidth.’
For GCs across the world, 2020 has been a year of learning to work remotely. As DXC Technology’s Ivy Wu puts it:
‘COVID-19 has totally changed people’s lives and changed the way workplaces operate, and people have spent a long time adapting to a work from home lifestyle. This will have big implications for the uptake of legal technology.’
‘In recent years, legal innovation has mostly benefited law firms and companies, but we are now seeing a trend toward traditional legal venues embracing technology. Courts are encouraging lawsuits to be filed online, and there is a push towards virtual hearings. Legal technology has made things more efficient for all players in the legal system, and those effects will continue to grow.’
JERA’s Tagaya adds: ‘Until now, Japan has had a tendency to believe in paper, ink and physical signature or seal. But now that COVID-19 has forced companies to examine technological solutions and embrace non-traditional working practices, it may have opened up their eyes to the possibilities that technology provides, which will lead to a corresponding increase in demand and thus growth of this sector’.
Julien Bergerat, head of legal and chief compliance officer for Nghi Son Refinery and Petrochemical (NSRP), a joint venture to build and operate the largest petrochemicals refinery in Vietnam, is an old hand when it comes to working remotely.
Before moving to NSRP in 2019, he held senior positions in Kuwait, Qatar, Switzerland and France. The ability to access legal information on demand has now become an expectation, he says:
‘We are living in a world where technology cannot be avoided, and the legal profession is no exception. Contract management, document automation and storage, legal research and, more recently, client relationship management and data and contract analytics tools are used by legal professionals as a matter of course’.
‘Over the last decade, legal technologies have given the profession opportunities to improve its overall efficiency and the tools to adapt to agile and challenging working environments. The lower cost of hardware, improved ease of use of software and increased mobility have allowed for easier means of communication but, most importantly, they have enabled lawyers to work from almost any location extremely efficiently’.
But it is not just the demands of remote working that are changing the way legal teams operate. The pressure to do more with less, never far from the minds of GCs, has suddenly become one of the main priorities of businesses fighting to cut costs in a time of crisis.
Benjamin Teong, associate counsel for legal operations at Lazada, one of South East Asia’s largest e-commerce companies, sees adapting to this change as an increasingly unavoidable part of managing a legal function.
‘For in-house counsel, the scope of the work and its complexity is increasing, but we are being forced more and more to work with leaner teams and really maximise the manpower that we do have. There is pressure to achieve more creative and innovative outcomes for the company’.
‘We have tools that are specifically geared toward ensuring that we work efficiently and avoid low-value work as much as possible. We have a workflow management tool, which tracks any work requests to the legal team, allowing us to manage it from the time that we receive the request until the request is fulfilled, and to prioritise issues that are more pressing’.
Across Asia Pacific, GCs are finding that the simplest technologies carry the most impact when it comes to changing the way their teams operate. For Dimas Nandaraditya, general counsel of Indonesia-based Traveloka Group, this relatively simple software has proved to be a quiet revolution.
‘Adopting a new technology requires time and managing multiple vendors and software for our business processes can be cumbersome, therefore we prefer out-of-the-box solutions.’
‘We adopted software that sends regular reminders on when a contract or license is due to expire, which means lawyers no longer need to go through all documents one by one to assess the relevant expiry date or manually send reminders to the relevant stakeholders. The technology itself is rather simple but its impact is very significant: it makes our lives easier’.
There is, adds Nandaraditya, a degree of skepticism toward more advanced forms of legal tech, such as machine learning. ‘Basic AI functions such as e-discovery or automated diligence are starting to get traction, but I doubt that they will be widely available in the next one to two years.’
Jeremy Ryan Chua, general counsel of JAC Liner Group, one of the largest bus companies in the Philippines, has a similar take: ‘Artificial intelligence can assist in gathering data and narrow down possible decision-making choices, it cannot replace the intuition, on the ground experience, and foresight of a seasoned lawyer’.
Made in China
As US sanctions start to bite, businesses in the PRC are becoming ever more reliant on domestic technology. GC asks what it means for the country’s lawyers.If you want to build a nuclear powerplant, a maglev train, or a quantum computer it is increasingly likely you will rely on Chinese expertise. In the space of little more than two decades China has emerged as a global economic powerhouse, transforming itself from the home of low-cost manufacturing to a leader in cutting edge technologies.
Bin Zhao, senior vice president, legal and government affairs at tech multinational Qualcomm has seen China’s technological prowess grow over two decades.
‘Since late 1900s, China has started to highly promote the tech industry. The government made a lot of direct/indirect investments and extended a significant amount of polices in all business areas to advance Chinese technological development. That is when big multi-national tech companies came into China and made business successes.’
‘At that time, there was a honeymoon period between China and multi-national companies, and American companies such as Microsoft, Intel and many others grew significantly during this period, taking advantage of both the open-door policy, and the Chinese leadership’s good intentions to merge into the international market. The situation however has changed dramatically recently, and the tensions between the US and Chinese governments are making things much less clear.’
Dealing with this uncertainty is likely to be a key theme for the coming months. DXC Technology (DXC) is just one of a plethora of American companies operating in China that has felt the repercussions of ongoing trade wars.
‘It is not something we can really prepare for,’ says Ivy Wu, head of Greater China legal at DXC. ‘Draft copies of regulations are coming out all the time, so we review to determine whether they will impact our business.’
‘As in-house counsel we have to be fast acting, agile and knowledgeable in all aspects of laws in China. When a crisis happens, you need to keep in mind what kind of risk is associated, then you need to take some action, and manage all situations in a proper way.’
Indeed, escalating tensions between the United States and China have dominated news headlines in recent years. Chengyang Xie, vice president & chief legal officer at Foxconn Industrial Internet Co Ltd (FII), believes the potential decoupling between the United States and China is one of the chief concerns for in-house counsel in the region.
‘When the trade war between the United States and China began to bite, we really saw things change. This year, the sanctions on Huawei and other entities have continued to be challenging, and there are now over 200 entities on that sanctions list. This will be a great challenge for the years to come. The one certainty is that everything is uncertain for multinational companies in China.’
Trade tensions aside, China’s corporate counsel are finding themselves facing the same pressure to do more for less as US counterparts. While using technology to streamline processes has been on the radar of legal teams for some time, the recent COVID-19 pandemic has accelerated the need for new ways of delivering legal advice.
Gordon Liu, vice president, legal for Dell Greater China, says he has been fortunate in his ability to draw on a comprehensive suite of workplace technologies.
‘Dell was a forerunner in workplace tech, so we have the infrastructure to work from a distance. Even before the pandemic, we were used to working in this way. However, systems that were somewhat experimental are now becoming our default way of working. For example, we use a contract management tool, which generates a lot of standard contracts, as well as handling negotiations, revisions and other changes. The pandemic has accelerated our use of these technologies, and our strong position in this field has allows us to navigate the lockdown without interruption.’
Adds Xie: ‘The lockdown has taught us that remote teams can communicate just as effectively. In my regional cluster we handle business across 12 countries, so managing a legal team without face-to-face contact is something we are accustomed to. However, the enforced reliance on tech to conduct our daily business has been an interesting lesson to us all. We have seen that many matters are more efficiently processed with software.’
‘Legal technology has become more important in the daily practice of in-house counsel. We now use tech-enabled platforms for legal drafts, intellectual property work and legal databases.’
Despite the advantages of legal tech, in-house have also experienced drawbacks, says Zhao: ‘On one hand, internet-based, cloud-based and 5G smart phone-enabled tools have significantly improved lawyers’ efficiency. At the same time, when everybody is connected, and information and data is always flowing around, you have to be aware of the most current information and recent trends, and that is not easy.’
The innovation race
As China continues to support digital innovation and investment, corporate counsel find themselves under more pressure to evolve. Despite the challenges, in-house counsel across China have embraced tech to boost efficiency, connect legal teams and manage the ever-growing pressure to do more with less.
‘The tech sector is a rapidly growing industry in China. There has emerged quite a few online, e-commerce and technology companies. With fast growth, there is a lot of energy volatility in the market,’ says Liu.
However, as the domestic tech companies continue to develop in China, the future of international tech giants remains ambiguous.
‘When talking about the future, the first word that jumps into my head is uncertainty,’ says Zhao. ‘I think that is the biggest challenge facing all multinational companies doing business in China.’
As Zhao puts it, the next few months will be decisive for multinationals in China: ‘This is a very important point in history. We will have to wait and see what is going to happen after the US presidential elections. It will determine a new era of history for high-tech companies, and their future development in China.’
Perhaps unsurprisingly then, while the potential of advanced legal tech continues to excite the region’s GCs, it has so far failed to gain any real traction in legal teams. Josh Lee Kok Thong, chair of Asia Pacific wide legal tech forum ALITA, remains optimistic.
‘The technology is really improving. One example is ROSS Intelligence, which recently rolled out a free Google Chrome extension. Users can plug in the case that they want to review, and the system will instantly pull it out. Tools like this will change how in-house counsel behave.’
‘The next generation of AI technologies will help lawyers start to write and craft opinions. This will be a game changer because it helps spark the inspiration process, it eliminates writer’s block and enhances the cognitive abilities of lawyers. Building on this, the technology is a game changer. It will allow lawyers to gain new ways of thinking and new insights they may not have seen before.’
This should come as no surprise. As Per Hoffman, vice president and head of legal affairs and sourcing for North East Asia at Ericsson, comments:
‘China is huge, so when it does something the volume it does it with and the impact that has on markets are all huge. AI will be the thing that will come into legal areas. Today you have contract databases where you can search and find various contract clauses. But the next step after that will be AI. China has one of the most advanced AI research and development environments in the world, so for lawyers that is the place we will look to for change.’
As the saying goes, “Ask a hundred lawyers and you’ll get a hundred answers”. Ask over a hundred lawyers about legal tech and the picture becomes even less clear. The legal tech ecosystem itself is so fragmented that almost no two GCs have the same thing in mind when talking about their use of technology.
Some companies are, to varying degrees of sophistication, implementing forms of automation or AI to solve legal or contractual issues, others are partnering with law firms to produce software capable of handling very specific issues like ISDAs, CLOs or loan documentation. But those applications of legal tech remain in the minority. Clearly, there is a distinction between legally useful technology and legal tech. Some basic elements of every office’s software suite can be legally useful, though they are not generally badged as legal tech.
The results of our survey show that by far the most common use of legal tech, shared by nearly a third (32%) of teams, was contract management. However, the overall picture is one of a market still in its infancy. Respondents were as likely to use tech to manage relationships with their external firms (17%) or handle invoicing (14%) as they were to do automate legal advice.
Notably, these trends affected companies of all sizes: those employing more than 50,000 people and with legal teams with over 100 staff were no more likely to use advanced legal tech than small to medium-sized organisations. This should come as no surprise. Even companies that specialise in developing very sophisticated technology face the same issues as their less technologically advanced counterparts when it comes to finding solutions for the legal team.
As one respondent representing a Hong Kong-based tech and IT solutions company commented, ‘As a provider of services then of course [the business] will have all this fancy technology, but most companies are much more sophisticated at developing things for clients than for themselves. As a user, as a GC using software to do something, you are in the same box as everybody else.’
Clearly, more money is invested in the revenue-generating side of a business than on its support functions. As experimental psychology has shown time and again, people naturally favour making gains over protecting losses, and businesses seem to be no different.
‘Take a large bank,’ continues our respondent. ‘It may have well over 1,600 lawyers globally. That bank is effectively running a top 20 law firm in terms of its legal staff, and that’s before you even consider its far larger compliance team. Yet when you look at how it is doing its legal work it will be nowhere near as sophisticated as a law firm. To understand why that should be the case you’ve got to consider that the law firm is practicing law as a business whereas the in-house counsel is a cost. Anything that solves a problem for in-house counsel therefore needs to be quantified as a cost saving when proposed to the business, which makes it much harder to justify.’
‘Even the most persuasive pitch for new legal technologies looks unappealing to most businesses because all you’re doing is comparing one cost with another cost: the cost of technology vs the cost of salaries to do the same job. Either way you’re reinforcing the view that you are a drag on the business that will incur costs! It’s not at all true – those are jobs that need to be done, but it’s how people will see it.’
Innate risk aversion when it comes to corporate budgeting is only part of the story, however. Part of the answer to why GCs struggle to acquire technology lies within the legal team itself. First, lawyers tend to be poor at understanding and explaining their technology needs. They may understand their legal needs very well, but this does not necessarily translate into seeing what sorts of tools they need to accomplish that end.
As another respondent pointed out, it also requires a lot of time and no small amount of skill to adequately benchmark legal tech. ‘Even doing the work to see whether an automatic translation service for legal documentation is efficient if automated and whether that can be measured in terms of efficiency gains is not something I would expect many GCs to successfully handle. Lawyers are generally terrible at that sort of exercise, which is a procurement exercise we are just not trained in.’
But – and this is neither the first nor last time this will be said about the subject of legal tech – a change may be about to come.
Over two thirds (68%) of those surveyed said that the use of technology within the legal team had increased significantly over the past five years. Just 5% reported that their use of technology had not increased at all. The bulk (95%) of respondents though that legal tech would end up significantly enhancing the day-to-day operations of the legal team, while nearly three quarters (73%) said they would like to step up their use of technology.
Perhaps a clearer indication of this change is that, for all their cynicism over tech, GCs are not disputing that it has changed the profession – 87% of respondents said that legal tech had already changed the industry to at least some extent. Even more strikingly, 95% of GCs felt legal tech would change the industry in the coming years, with 33% saying that the change would be significant.
Networking, as any diligent MBA-holder will tell you, is essential for an eye on corporate leadership. But finding the time to network is often the last thing on a busy lawyer’s mind.
How things change.
Several months into lockdown, finding effective ways to network has become the only escape route from sliding into set ways of doing things. ‘Remote work is the future of work’, says Amar Sundram, head of legal for RBS India. ‘That means we need to come up with new ways of forming and building relationship and keeping on top of changes in the way other organisations are doing things.’
Nowhere is this truer than the world of legal technology. For many GCs, keeping up with the pace of new technology was challenge enough. The pandemic has only made that job more difficult. As a result, a growing number of GCs are seeking out new forms of community building, networking and peer learning to help them cope. Suddenly, professional learning networks (PLNs) have become all the rage.
Across Asia Pacific, a raft of dedicated tech networks aimed at training and educating GCs has sprung up, from the Australian legal Technology Association (ALTA) to the Future Law Innovation Programme (FLIP) in Singapore. These organisations do many things, but all of them aim at a common goal. As Josh Lee Kok Thong, chair of the Asia-Pacific Legal Innovation and Technology Association (ALITA), puts it, they ‘encourage lawyers to take learning into their own hands, to be more interested in the technology and other disruptive forces that can affect their work’.
As peer networks become an increasingly important way for GCs across Asia Pacific to engage with legal tech, we canvas some of the leading institutions, and their members, on what it means for lawyers’ engagement with technology.
Among the largest informal member networks is the aforementioned ALITA, a regional coordination platform that seeks to promote legal innovation and technology initiatives. The organisation launched in 2019 with a bold mission statement to make Asia a hub for legal innovation. It is, says ALITA’s Singapore-based chair Josh Lee Kok Thong, the first truly Asia Pacific wide legal tech forum.
‘This was a great chance to bring together a vibrant ecosystem and show the significant advances in the development of legal innovation and technology in all countries across Asia Pacific.’
‘While each country has its own legal tech networks, we felt the cross-border interaction was missing. We wanted to give a voice to the region, to promote collaboration opportunities across the region. The results so far have shown just how much progress can be made when GCs and thought leaders from different countries work together to share experiences, context and opportunities.’
ALITA has grown rapidly to around 150 member organisations in 20 countries. The membership includes some of the world’s largest law firms and technology companies, as well as universities, think tanks, legal tech companies, and governmental or quasi-governmental organisations. It is also fast becoming a leading platform for the region’s general counsel.
Narae Lee is a Seoul-based lawyer at Bliss Law Office and an organiser at Seoul Legal Hackers, a separate discussion forum for issues arising at the intersection of law and technology. She recently joined ALITA’s steering committee and says the regional focus will be invaluable to the GC community.
‘Legal Hackers is an international organisation, so I already had the benefit of that cross-border perspective. However, when it comes to the use of legal technology there are nuances of context that matter. As counsel in Korea I will have a very different set of pressures, expectations and possibilities to someone based in Europe or the US.’
‘Generally, it’s useful to have a forum that looks at what other people facing these same issues are doing. The best way to learn about legal technology is to speak with others who are using it and know what it can and can’t do.’
Though still relatively young as an organisation, ALITA is already expanding its activities to create what Josh Lee Kok Thong describes as ‘probably the world’s first legal tech observatory.’
‘Just as an observatory contains a set of tools that help stargazers absorb data and information, draw patterns, and observe movement, we are creating a set of tools to help the legal community scan the Asia Pacific region. Above all, we want to make it a live observatory that feeds people with information on the initiatives that are taking place across Asia, so that actionable insights can be drawn.’
State of the future: Singapore’s bid to become a legal tech hub
The Government of Singapore has set its sights on a new and unexpected industrial development plan: developing the island state into a legal technology powerhouse. GCs speaks to the people looking to make these plans a reality.
Since gaining independence in 1965, Singapore has pioneered an economic model like no other. By combining a free market and open-economy with strong government involvement, the island state has grown at a breakneck speed to become, on a per-capita basis, one of the wealthiest countries in the world.
The lessons of this economic model, poured over by policy makers and business analysts ever since, break down to three things: decide what you want to be a world leader in, back the industry so it has all the conditions needed to thrive, and stay the course.
Singapore’s legal market has been following this rule book for at least two decades. First, in the early 2000s, foreign lawyers were permitted to set up Joint Law Ventures (JVLs) with local firms, a move then Attorney General Chan Sek Keong said would make it a ‘one-stop shop’ for cross border transactions. Since then, the government has been a staunch supporter of its legal industry, developing a world-class arbitration infrastructure and a judiciary that is unparalleled in the region.
When Singapore launched Asia’s first legal technology start-up accelerator in 2019, it was legal tech’s time to take the limelight. Backed by generous research grants, ambitious accelerator programs and direct financial support, Singapore’s legal tech providers had become the latest champions of future prosperity.
If you build it, they will come
When it comes to legal technology, GCs often face a dilemma. While many know what they would like technology to do, they often find themselves disappointed by the marketplace. In short, there is a huge gap between the legal technology that is available and effective now, and technologies with the potential to be truly disruptive.
It was precisely this dilemma that led Singapore to establish The Future Law Innovation Programme (FLIP). Now under the aegis of the Singapore Academy of law, FLIP first emerged out of discussions at the Committee on the Future Economy (CFE), a governmental body founded in 2016 to help Singapore’s economy adapt to the market conditions likely to prevail over the coming years.
Paul Neo, Singapore Academy of Law’s chief operating officer, says the initiative helped draw attention to the economic potential of legal tech.
‘A lot of people knew there were all these bottlenecks in the legal market caused by poor adoption or adaption of technology, but the hard evidence was missing. We needed to take the lay of the land and understand the market through surveys and discussions, which we distilled into our “101 Industry Problem Statements”. That had a number of positive effects in terms of understanding the market, but it also allowed us to show potential investors the huge demand out there, emphasising the rewards available should these problems be solved.
‘A lot of technologists focus on fintech rather than legal tech, so this initiative helped to display to them the opportunities available in legal tech innovation. While there were already a lot of tech accelerators in Singapore, none of them were focused on legal tech, which has its own unique issues. To build one, we had to partner with existing accelerators who knew how to scale companies and had general business know-how, to which we added in our legal expertise.’
That led Neo to found the Global Legal Innovation Digital Entrepreneurship Program (GLIDE). In its early days, the initiative was aimed at Singapore’s investors, but the ambitious attempt to turn legal tech into an investment class has caught the attention of investors far beyond the island state’s borders.
‘Whenever I visit London, law firms and legal community builders want to know about the marketing work being done by the FLIP program’, says Chan Zi Quan, co-founder and CEO of Intelllex, a Singapore-based law tech startup offering an intelligent knowledge management system that allows lawyers to search for, store and share knowledge. Quan, who sat on the minister’s committee during the early days of FLIP. ‘They can see the beneficial effects it is having and are interested in replicating its success.’
Quan, who sat on the minister’s committee during the early days of FLIP, says that while the idea of legal tech providers receiving state funding may seem unusual, it was exactly what the market needed to take off.
‘The legal industry is rather fragmented when compared to other sectors. For example, in shipping or manufacturing there is much more consolidation and it is not at all unusual to see the government step in and offer support. But for a tech provider that caters to all sort of businesses, from SMEs right up to blue-chip global companies, it is much more difficult to make a case for that level of support.’
‘This sort of government support has really boosted our legitimacy. The due diligence they conduct on suppliers has really helped grow community trust.’
While Intelllex itself was deemed too mature to benefit from FLIP or GLIDE – it was, says Quan, ‘founded before there was even a term like “legal tech” to describe what we were doing’ – it was recently approved as a preferred supplier by Tech-celerate For Law, a support scheme for the adoption of technology solutions launched by the Law Society of Singapore, in partnership with Ministry of Law, Enterprise Singapore and Info-Communications Media Development (IMDA). The programme aims to help Singapore-based legal entities compete in the global marketplace, underlining the government’s commitment to its vision of a tech-enabled legal marketplace.
Under the Tech-celerate programme, Singapore-based legal practices are awarded 80% of the costs for any new technology implemented for the first year of use, allowing vendors much-needed time to establish proof of concept and refine their offering.
The infrastructure put in place by the government of Singapore has also attracted tech talent from other markets. Workflow automation software provider Checkbox was founded in Australia in 2016. It has since grown at an impressive rate, tripling its user base over the past year. But, says co-founder and CEO Evan Wong, its experiences in Singapore were transformational.
‘We were part of a competition at TechLaw.Fest that involved a number of rounds of pitching at the conference after a rigorous vetting process. After winning this, it really helped to lift the profile of the company and allowed us to move into the GLIDE program. From there, things started to really take off for Checkbox in Singapore.’
The road ahead
Even more ambitious plans are underway to make sure Singapore is at the forefront of legal tech. The government has made a bold statement through its S$15 million National Research Foundation grant to the Singapore Management University (SMU). This will see the creation of a new Computational Law Centre and research program at SMU, fulfilling SMU Principal Investigator Wong Meng Weng’s strategic vision for the development of legal technology at the University.
The Computational Law Center ambitious flagship project will attempt to build a domain-specific language for law, something Jerrold Soh, assistant professor of law at SMU, says has far-reaching implications for the legal industry.
‘The analogy I would use is that we are doing something similar to what Adobe did with PDFs. Computational law is essentially expressing legal rules as computable units that can be calculated through logical operations. Our project starts with a basic tool, the domain-specific language, and builds legal tools on top of this. For example, someone writing a contract would be able to define the terms and mechanisms in a code-like language so it can be understood by the system. You could then run a check to see if it contains logical errors or has terms not defined’.
‘More importantly, you could also port this code-like language over to various natural languages. Once you have it in a condensed, pure logical form it’s easily translatable between different languages at once. Mandarin to English is doable, for instance, which will have many applications’.
These developments in computational law would not only improve the efficiency of legal tech, but could represent a sea-change in the capabilities of human-machine interfaces more broadly. But, as with most ambitious projects, it remains a moonshot. ‘It sounds like we’ve got it all figured out, but we haven’t’ says Soh. ‘It’s a big research project that will take a lot of time and effort to accomplish’.
With the Government of Singapore now backing legal tech, finding the resources to accomplish these ambitions should not be a problem.
These ground-up attempts to share information sit alongside more formal initiatives to develop awareness of legal tech organised by the region’s academic institutions. Perhaps the most advanced of these is The Future Law Innovation Programme (FLIP) run by the Singapore Management University and the Singapore Academy of Law. FLIP has issued a series of roadmaps on the future of legal innovation in the Asia Pacific region, which were highly praised by the GCs we spoke to for this report.
Australian institutions have also been notable for their activities to promote legal tech. The country’s largest postgraduate legal practice education provider, the College of Law, runs the Centre for Legal Innovation (CLI), a legal innovation and tech think tank focusing on emerging legal practice, future legal tech, innovation and entrepreneurship in the legal industry.
The focus throughout these activities, says CLI executive director Terri Mottershead, is on practical actions, and while CLI is actively monitoring market trends, it is ‘more interested in understanding how to those trends can be translated into solutions.’ For example, CLI offers a programme called Reinvent Legal Business, which looks at the various changes that have been taking place in the industry, covering everything from in-house initiatives to the work being done by law firms and alternative legal service providers.’ One of the biggest shifts across the profession, says Mottershead, has been the growing interest in technology among lawyers.
‘We have seen a real shift in the uptake of technology, particularly in the wake of COVID-19. As part of our Digital Literacy series we are looking at how we can provide support for lawyers to use technology effectively and help them understand how it can be incorporated into their practice.’
CLI, which has branched out from Australia to establish bases in New Zealand and Singapore and, more recently, the UK, does not operate like a traditional network. It offers the bulk of its courses and services for free ‘to help promote the sharing of information’. Recently, it has been devoting more time to vendor-led demonstrations of the newest legal tech from around the world.
‘It’s not intended as a sales pitch’, says Mottershead. ‘It is an opportunity for tech developers to explain the gap they sought to bridge and how they did it, while also giving them a chance to listed to the needs and feedback of end users.’
‘In fact, we have noticed that many lawyers are receptive to seeing how the technology works. The demos have been popular, and we have been holding more and more of them to help meet demand. That suggests to me that lawyers have a big appetite to understand the systems and tools that are available to them.’
Sheldon Renkema, general manager for legal at industrials conglomerate Wesfarmers and the Australia regional co-lead for the Corporate Legal Operations Consortium (CLOC), has a similar take on the value of per-to-peer learning in a fragmented legal tech market.
‘One of the great things about CLOC is that you can very easily learn from what others are doing, so that you’re not reinventing the wheel. You are learning from others’ experiences so it’s a really good forum for embarking on that journey, connecting with people who’ve been through similar experiences and being able to benefit from their experience [of] the things that have gone well or not gone well in that specific context’.
‘It’s very difficult to actually objectively assess whether what [legal tech providers] are saying their product or service delivers is actually what it delivers. Being able to leverage the experience of people who have used those products and services to see what the actual output is very helpful’.
Across Asia Pacific, universities and academic institutions are rolling out a variety of courses that bring aspects of IT and computational thinking skills to a legal audience, alongside a much wider number of courses that teach lawyers about the business impacts of tech and innovation. Some, such as the Singapore Management University, have gone further and now offer combined law and technology degrees.
Haebin Lee, research manager of the crypto finance division at Korea-based Block Crafters, agrees, and gives weight to the idea that membership organisations are the best way for GCs to move the industry forward:
‘There should be more a lot more discussion on how we should shape legal tech, and which direction we should take with new technology. That’s what we’ve been striving to do through Seoul Legal Hackers and ALITA: open up a room for free discussion.’
Path of least resistance
Free discussion and knowledge sharing are changing the way GCs learn about and interact with legal tech, but at a certain point this enthusiasm for change hits hard problems. As Nilanjan Sinha, head legal for Indian multinational banking and financial services company ICICI Bank, observes:
‘Legal tech, perhaps because of the mindset of lawyers, is not as disruptive a space as it could be. The problems have been identified, and various solutions have been proposed by service providers. The hope is that as people become more used to using tech and working from home there will be a greater uptake, but there remain obstacles.’
‘Senior management needs to buy in to a particular way of working for new practices to become widespread. As GCs we have a big responsibility to oversee and facilitate that change within the team.’
An even bigger problem, and one identified by many of the regional organisations we spoke to, is that lawyers’ mindsets need to shift before the profession embraces technology. As Sinha notes, ‘It may take time but there will be greater efficiencies on an ongoing basis if we make the effort now.’
New Ways of Working
Near universally, the global pandemic has forced a fundamental rethink as to how many of us live our lives, be it personally, professionally or otherwise. The legal sector in Asia-Pacific has proved no exception, with the past year providing an impetus for innovation and an acceleration of technology-based solutions.
‘Technology is not only changing how lawyers work on a day-to-day basis; it is reshaping some of the most fundamental aspects of law,’ says Vinay Ahuja, Partner – Indonesia, Lao PDR & Thailand and Head of Indonesia Practice at DFDL Tax & Legal.
‘Consider the huge changes that have taken place in courts across Asia. As someone who grew up and practised in India until 2010, I can safely say that it has come as a big surprise to see India’s courts embracing virtual hearings!’
While virtual courts may be one of the most immediately recognisable changes to legal practice – particularly for those outside of the legal sphere – for both in-house counsel and their law firm counterparts, the day-to-day differences in regular work habits are perhaps even more pronounced.
‘Today, law firms are typically arranging for client meetings and negotiations to be carried out via video conferences, while webinars are frequently being arranged for a range of purposes, including external seminars for clients, as well as internal training sessions for lawyers within the firm,’ says Zhuowei (Joyce) Li, partner at Han Kun Law Offices.
‘The COVID-19 pandemic has made organisations more reliant on technology than ever and as a result, when using technology tools for remote work, privacy and security have become a more critical issue.’
Concerns around privacy and security are unsurprisingly not limited to law firms. Cybersecurity was one of the most frequently cited concerns related to technology that the in-house counsel who took part in the research for this report raised, with the sensitive nature of legal work, in addition to the risks associated with data breaches, both front of mind.
‘With the emergence of new technologies and more broadly, changes in business trends, in-house clients are increasingly moving towards technology-enabled services,’ says Janet Toh Yoong Sang, partner at Shearn Delamore & Co.
‘This has resulted in new and different inquiries coming from clients, with advice sought on issues around data security and risks associated with the use of technology-enable services, as well as an uptick in the number of clients conducting risk assessments of third-party technology providers before consideration of services for contracting can begin.’
These issues speak to the need to establish new frameworks to deal with technology-related issues and are translating to a rise in new types of work for private practice lawyers. Multiple WSG member firms have reported that they are being instructed to advise clients on legal issues arising from the use of technology in remote working scenarios – including the issuance of guidelines for video conferencing software and collaborative working applications – a trend that all expected to continue to evolve as businesses and law firms alike come to terms with new ways of working.
There are signs that this resistance to change is slowly fading, however. Josh Lee Kok Thong, himself a millennial, says a new generation of lawyers across Asia is coming to the table with quite different expectations from their predecessors.
‘The millennial generation is going to be key. We are going to hold key decision making roles in organisations, law firms or in-house departments in a few years’ time. Once that happens there will be a fundamental shift in thinking in terms of how legal services are going to be provided’.
Besides which, the writing is clearly on the wall. Technology will play an increasingly important role in how lawyers deliver their advice, whether lawyers like it or not. But more importantly, when it comes to the law, the medium is the message. As Mottershead notes:
‘At the moment, we see legal tech as a tool that assists us in doing things more efficiently, but over time, that will develop or will actually provide different ways of delivering legal services altogether. It will inform decision making processes and create the opportunity for additional or new revenue streams.’
At which point, even the most conservative of lawyers will see their interest piqued.
A tech-savvy company does not necessarily have a tech-savvy legal team. Nor, for that matter, does it necessarily encourage the use of tech among support functions. But a supportive environment is at least a start. It is refreshing to see that 81% of respondents said their companies were supportive of the use of technology in the legal function. At the same time, 67% thought their companies were more supportive than their rivals. At least 18% of them must be wrong…
But this support has not necessarily translated into financial backing: nearly half (45%) of GCs said that insufficient budget for was the biggest barrier they faced to obtaining technology for the legal team. Knowing what to buy among the many systems available is also becoming problematic, with 73% of GCs either unsure of what technology was available or feeling that there was no suitable third-party tech to meet the legal team’s needs.
There are also cultural barriers to implementing legal tech, sometimes in surprising places. Japan may be the home of everything high-tech, from robots to video games consoles, but its businesses still lean heavily toward tradition when it comes to ways of operating. Angela Yuen, deputy general counsel at JERA, Japan’s largest power generation company comments:
‘In every Japanese organisation there are more layers than an onion. For instance, taking an approval system from paper to electronic format can be a huge task because under the old system of internal approval there will be a large number of steps required at various levels and no one wants to be cut out of a decision.’
‘Furthermore, while people in Japan embrace technology, the legal field has been slower adopting legal technology due to a conservative, careful approach. I think these are two significant factors in why Japanese corporates have been slower to embrace legal technology’.
The long and costly road
When it comes to wish lists for new technology, GCs are looking for either a simple efficiency boost (38%) or readily customisable software (24%). Surprisingly, value for money (15%) and ease of use (10%) were not big concerns for GCs looking to implement new systems. Clearly, legal teams accept the road to tech-enabled efficiency gains will be long and costly.
But the costliest of all solutions, advanced automation and AI, have yet to gain traction with Asia Pacific’s GC community. Only 23% of those surveyed said they were using an advanced tech solution in the legal team, with many deterred by concerns over the cost and reliability of the such systems (29%), difficulties finding the right software (20%) and their own lack of product knowledge (21%).
There was also a healthy degree of scepticism on display. ‘The maturity of AI solutions for legal work is lacking, and I think there is more marketing hype than real AI solutions on the market’, comments Bernard Tan, Asia Pacific managing counsel at Agilent Technologies. There were also concerns that more advanced software would generate more risk for the business. As one respondent commented:
‘There are a number of advanced technology options, but none so far have I found to be absolutely effective. Those that do exist seem to create another layer of liability, which can add to the responsibilities of the legal team. No single tech platform is able to resolve multiple issue, regardless of what their sales teams claim.’
There have, however, been positive experiences. Ivy Wu is head of legal for Greater China at American business-to-business IT service provider DXC Technology. Recently, DXC signed the largest-ever managed services partnership agreement with UnitedLex, giving them access to a suite of advanced legal technology systems.
‘The AI-based legal research translation tools mean we accrue significantly less time and cost penalties when compared to having a dedicated department for this task’, Wu comments. ‘A document can be translated very quickly and will only require a very simple manual double confirm, which is very useful for some litigations, especially international ones which require a lot of translation. The feedback from the business from seeing this data is very positive because they are able to see the cost saved by the legal department is greater than our budget’.
Friend or foe?
GCs may not be using advanced technology en masse right now, but they are keeping a close eye on developments in the field. More than half (55%) were concerned that legal tech would disrupt the in-house job market, while just over a third (38%) felt that lawyers were well equipped to adapt to technological changes within the profession.
But, as Susan Cattell, senior legal operations manager at AMP, concludes, the end game is not lawyers being made redundant, but lawyers learning to do things more effectively.
‘I look forward to the disruption of the industry when we get this right, as when we do, the possibilities of better service to the end-clients, lower cost processes and better managed teams should promote an even better working environment.’
Legal tech is becoming big business in the Asia Pacific region, so much so that the Singapore Academy of Law (SAL) has opened a legal tech accelerator. But much of the industry’s focus remains on selling to law firms. For GCs and in-house legal teams, making sense of the myriad systems can be a daunting task.
It is no surprise then that GCs would like to see law firms doing more to help them make sense of the market. While more than half of respondents to our survey (62%) said their external firms were using technology to deliver legal services, under a quarter (23%) said their firms had offered to share information on how technology might benefit their legal team’s operations.
‘Law firms need to demonstrate the value to in-house teams of adopting technological solutions’, noted one respondent, a Hong Kong-based legal manager at an international consumer goods company. ‘Right now, I think the focus of law firms is using technology to improve their bottom line rather than creating value for clients.’
Another respondent, an Indonesia-based head of legal at a large insurance provider, added: ‘It would be great if the external firm could also offer the service of helping in-house teams find the right legal tech solution for their team. They are often far more aware of the trends and services being used in the market so this would really help us understand things.’
Given the clear client demand, it is surprising that law firms are not seeing the opportunity here. Then again, law firms themselves may have a lot to learn. Just 22% of respondents were satisfied with the technology being used by their external firms.
Law firms should take this dissatisfaction seriously – 94% of respondents said it was important for law firms to keep up with new technologies, while 59% said they had started assessing their firms’ use of technology as part of their formal panel review process.
The incentive for law firms is clear. While legal tech is often seen as a disintermediator, disruptor or challenger to the established order, it does not have to be treated as a zero-sum game. As Susan Cattell, senior legal operations manager at Australian financial services company AMP, notes: ‘Clients and law firms have to work together to ensure the right tech solutions have been put into place and that they benefit both parties.’
Regulation is taking over the agenda for in-house counsel across Latin America, according to the results of the 2020 GC Powerlist Survey: Latin America. Almost 70% of respondents reported that the sector in which they are operated is highly regulated – 92% said that their sector was at least moderately regulated.
What’s more, 85% of all respondents said that they expect regulation in their sector to increase in the next five years, with almost half of that number (37% of all respondents) expecting a great increase in regulation. Virtually no respondents expected regulation to decrease in the next five years, and just 14% expected no change at all.
‘The explosives industry is highly regulated and for very good reasons,’ says Jorge Hirmas, general counsel for the Americas at Orica.
‘The regulations in the different countries of the region are similar and of a high standard.Some important aspects of our industry regulations and the means of implementing them could be improved, however, in most countries there are plans currently underway to address these gaps.’
The numbers reveal a complicated relationship between in-house counsel, their businesses and the regulations that are governing their conduct. Taken as a whole, the in-house counsel that participated in the survey were cold on the prospect of more regulation in their sector: 42% said that they thought more regulation in their sector would be a bad thing, compares to 23% who thought it would be positive. Those who came from highly regulated sectors we most likely to see increased regulation as a bad thing: half of those from such sectors said that more regulation in their sector would be a bad thing, as opposed to just 18% who thought it would be a good or great thing.
‘Regarding regulation, it is required because we owe fiduciary duties and so we are regulated on investment limits and eligibility of investment assets,’ explains Sheila La Serna, chief legal counsel at Profuturo AFP. ‘However, there are always aspects that can be improved in regulation now that we are facing more digital relationships with our clients.’
Overall, counsel reported that their companies were well prepared for the event of a regulatory investigation: 76% said that their company has a response plan for such an event. Predictably, those that came from highly regulated sectors were more likely to have a response plan (89%) as opposed to those who came from sectors with less regulation (66% for those in lightly regulated sectors, 79% for those in moderately regulated sectors).
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