I would say that at Bombardier Transportation Group, we’re not using technology in the way we could be and should be using it – I would self-critically say that we’re in the bottom third if I look around – but we have taken the decision, as the leadership team in the legal community, to tackle it.
I see two challenges of employing technology in an in-house legal context. One is budget and the second is that we need software applications that work around the globe. It doesn’t help us if we find the perfect solution for the legal team in Germany – we need to find the global application that the legal team can use in the UK, in France, in Sweden, in Thailand, in the US, in Australia, in South Africa, in India – you name it. It needs to be a software that is so generic that it can be universally used, possibly also in different language settings, because despite being a global firm where English is the company’s language, we still do have local languages used in contracts.
Be brave: think long term
Budget, of course, is always an issue because you need to have a convincing business case. You need to go to the CFO and say, ‘I need the budget of X, I will invest in legal tech applications, and the return on the investment is Z, and Z is higher than X.’ But how do you make that case? I would not like a conversation, which I’m concerned some of my colleagues have had, where the CFO says, ‘Sure, I will give you the budget of X, but then please sign here that you will, in return, reduce the head count in your legal team by 20 or 30%.’ It doesn’t work like that.
I think the return on the investment in legal tech and software application is mid term and long term, it’s not short term. It’s not: you buy this software or this contract generator, or this chat bot and then Peter and Paul can take a hike. It’s not that simple, and if that’s the equation, then the equation will fail and in-house legal teams will not be successful in convincing their CFOs, because they will be shooting themselves in the foot. In the long run, they may have a lower need to hire new in-house lawyers. Even in the mid term I would say that’s doable, but not in the short term. You need to be brave to make the investment, because it’s difficult to predict the yield of return from the investment for the legal team.
Window-shopping for tools… and best practice
I see the benefits of legal tech software and legal tech applications not as a means to cut down on headcounts in in-house legal teams, but as a means for in-house lawyers to be relieved of wasting their time on administrative, repetitive, non-value-add work, so they have more time to spend on brain work where, luckily, software is not yet better than the human brain or the legal mind. I really see it as an enabler to focus more on value-added legal work to support bringing the business forward, so I think we are doing our own in-house lawyer profession good if we find ways to manage our time and our energy better. I’m coming from the perspective of increasing the efficiency, effectiveness and impact of in-house lawyers, rather than just looking for a cost-cutting measure.
Recently, a German law firm showed me a smart contract generator tool. The software asks you questions, asks you to provide information and data and then after 50 questions, you have a fully fledged procurement contract. It’s such an easy approach because a company that develops tech software for lay people came up with this idea and they just transferred this approach, a way of guiding a lay person through legally relevant stuff to create the output, which then is a contract. I see various applications for that, for simple contracts that are really standardised, like non-disclosure agreements, a simple lease agreement, a simple purchase agreement, or a simple labour contract. It can be used for any contract that a company uses on a repetitive basis. So it could be for one company’s licensing agreement, it could be for another company purchasing raw materials, it could be for another company purchasing professional services. Whatever the contract, on a repetitive basis, from Monday through Friday, it can be easily standardised and then created by clicking the mouse, rather than typing letters and numbers for hours, creating and drafting a contract.
Another area is copying what service providers have created for end users. For example, one telecommunications company in Germany created an application that you can use if you’re suffering from problems in your WiFi at home. Rather than calling a service line and waiting for 30 minutes hearing lousy music, the app connects to your WiFi router and does some things in the background and tests the connection without you seeing it. If the app (that you can use on your smartphone) detects a problem, it guides you through solving the problem. You don’t have to waste your time on a service line, you’re not wasting money on that call, and you get a quick solution. Something like that could also be used for standard legal questions in a big company that the business asks again and again and again. You just feed the software with information that only a lawyer can give, the software works by itself, the business is supported and they don’t have to phone up the lawyer.
The magic pill that I would like to find, and then eat and swallow, is a software application that we feed with the terms and conditions of our contracts. Based on our project execution experience, the software tells me which are the hot clauses and the cold clauses and, on the hot clauses, what different clauses we have used and how we can improve those hot clauses by learning from our own contracts around the globe. I think we can greatly improve knowledge management when it comes to our own contract execution around the globe.
I was reading the other day that, according to one global consulting firm, 85% of the jobs that people will have in 2030 don’t exist today – which is quite frightening, because it means that only 15% of today’s jobs will survive to 2030. But I would not say that 85% of what I’m doing with my legal team will no longer be done by us in 2030; I see different angles.
There’s one angle where I have the private citizen in mind, and yes I think there will be a huge disruption of how people like you and I, in our private lives, use legal services. I think if you look at the available tools already now, there will be less and less need to engage a lawyer to help you resolve your legal questions and legal disputes.
For companies, by 2030, if they are smart, they will have smaller legal teams but still continue to insource legal services, so they will use less and less external legal advice. I would say that smart in-house legal teams will have managed to develop in-house legal expertise and knowledge in areas where they are no longer dependent on external lawyers, and they can only do that because they are no longer wasting their time and energy on low-skilled, legal administration work. I think it will help the smart in-house legal teams to improve legal quality in areas where they are currently dependent on external experts, so I think it will be tight for external lawyers rather than for in-house lawyers, because there will simply be a decrease in engaging external lawyers.
But not for the real global law firms who make a fortune from global transactions where you need so much more brains and hands than a mid-size law firm can possibly get together. For mid-size law firms, it will be tough moving forward into the future, and you see it already – there’s a big trend of consolidation in mid-sized law firms. I would say that the landscape of law firms will look very different in 2030.
It was acceptable in the 80s
We are quite a conservative profession, at least in Germany, and we are under immense pressure to stop conserving the way we work rather than opening ourselves up to new ways of working. The days where a partner or an associate in a law firm can shift all technical stuff – word processing, Excel, PowerPoint – to an administrator are over with and, sooner or later, there will not be a person who does all that for you and you charge it to your client. I think we all need to step up our technical skills and internet skills and software skills, because our way of working as lawyers, and in-house lawyers, is pretty much the same as in the 1980s –and I don’t think that that’s sustainable.