Show factor

In his column "Lost in innovation," the highly respected Markus Hartung expresses doubts about the innovative power of both law firms and their clients, the legal departments. There is no other way to explain the fact that both staff numbers and per capita turnover at law firms continue to rise, but so does the number of employees in legal departments, Hartung says. Innovation would require a permanent, joint process analysis between law firms and their clients, and there is no sign of this.

So far, so undisputed. But is this relationship really only a professional one? I claim, no. The value of consulting services (both of lawyers and of tax and business consultants) is, after all, also determined to a considerable extent on an emotional level. The particularly aggressive lawyer's letter to the opposing party, theatrical meetings, and even heavy documents - they all serve to convince clients of the extraordinary qualifications of "their" lawyer and of his overwhelming commitment to the cause.

The question remains why clients play along here. The answer is probably differentiated: some because they want to - the behavior described above gives them self-justification that they have made the right choice. And the others? - they are probably to be found in the rapidly growing group of clients willing to change, as described in the current Future Ready study by WoltersKluwer. 

Everything will stay the same until it will change.

In the end, it's always about money

Wolters Kluwer's Future Ready Lawyer Study 2021 was eagerly awaited, as it provides an opportunity to track changes due to the pandemic. There is one aspect in particular that I would like to address here: the growing willingness of legal departments to change.

A quarter of in-house counsel surveyed said they were looking to change law firm(s). The figure has doubled since the previous year. A key reason is the lack of use of technology in law firms. That's worth a closer look.

One would like to think that a client could care less how the lawyer handles his mandate, as long as the time, quality and price are right. To paraphrase Bertram Burtscher (Freshfields): Whether hordes of "ants" (a term used by me) are involved in due diligence or AI-supported software - who cares, as long as the result is right. 

But that is obviously no longer true. Apparently, the awareness is spreading among in-house counsel that the use of technology in law firms can lead to better quality results. Presumably, however, it's not about the technology per se, but about the transparency of the processes for the client. Or thinking one step further: in the end, it's about the best possible quality and - surprise! - it's about money.

Client communication: from bad to worse?

 

One regularly reads that the use of email to communicate with clients is problematic for lawyers. The focus here is on unsatisfactory confidentiality, since the sender can never know who all in an organization has access to the recipient's mailbox. Behind this is the desire to put client communication in general on a new footing and to replace Outlook & Co. with shared workflow systems.

The online magazine THE ARTIFICIAL LAWYER has now investigated the question of which methods (products) lawyers regularly use in their professional activities. The magazine surveyed 2000 lawyers, including attorneys and other members of the legal industry. The result: two out of three respondents use cell phones and Microsoft Outlook, followed relatively closely by WhatsApp (!) and Gmail. LinkedIn messages also come in at almost 50% usage, Slack at around one quarter. Facebook messages and Apple Mail rank below the rest.

In other words, if we disregard MS Outlook (mail and appointments), messenger services have gained a most prominent position in the legal profession. And the trend is probably upward. This will not please the data protectionists and certainly not those who are responsible for knowledge management in the company / organization. Those who are surprised now, however, must accept the following fact: We have known for at least 10 years that young people communicate exclusively via cell phones.

One could have been prepared.

Filters, views, relations - and where is the AI?

During a panel discussion, Judge Michael Kunz from the Vienna Oberlandesgericht (Higher Regional Court) showed the essential functions of the new case management system "Justice 3.0" in Austria. In a nutshell: the years of preparatory work have paid off. Judges and public prosecutors now have access to a digital case management system that offers a wide range of functions:

Users can filter their cases according to a wide variety of criteria, they can also build their own "views," and even create relation tables, where key points of the parties' arguments are compared and linked to the file content. The fact that the system supports fully digital communication with all parties involved is almost taken for granted in Austria. This also includes the use of digital signatures.

The framework for Justice 3.0 was purchased from the Bavarian government, but all functions were developed in Austria. It is to be rolled out to all courts and public prosecutors' offices by the middle of next year. At those departments where it is already available, its use is strongly recommended by the employer.

And if a completely new system is being set up, aren't artificial intelligence components also being used? More about that soon ...

Software: permanent relationship instead of simply purchase

One characteristic of the Corona Crisis is the variety of webinars on offer. Those who wanted to listen actively were able to pick up valuable insights at yesterday's event hosted by Frankfurt-based reinvent legal innovation hub. Guests were David Bloch from Swiss legaltech startup Legartis and Martin Kay from international vehicle supplier ZF.

Legartis offers an AI-driven software for highly automated analysis of legal documents. At ZF, this is in use to speed up the review process of NDAs. What are the key findings?

1. If new software is to be deployed in a highly operational company, it is imperative that it is "ready". That is, the promised functionalities must actually exist and the software must have been extensively tested. If it turns out in live operation that essential functions do not work or do not work sufficiently, it is highly probable that this would be the end of the project. So there is no question of a "minimum viable product".
2. The project is by no means complete once it has been successfully put into operation. Rather, it must be followed by a process of continuous collaboration. It is particularly important to keep this in mind because the entire contract structure and pricing must be based on this.
3. The process change associated with the use of software only pays off if as many relatively uniform and not too complicated documents as possible are to be analyzed.
4. Last but not least: software does not replace people.

The good news: Despite all the challenges that could be read between the lines, the project was judged positively on both sides; consequently, new contract types are now being tackled.