Frankfurt Boookfair and digitization. A surprising connex

I have been visiting the Frankfurt Book Fair for 35 years. For reasons of cost (hotel prices at fair times are astronomical there), we usually sought out accommodations that were located outside. I have fond memories of a hotel in Hanau, for example. Hanau is a neighboring city of Frankfurt, and the public connections to the Main metropolis were good even then. But ...

But the trade show program also included attending evening events, which had to end with a cab ride back to the hotel. And here the horror began, not out of fear, but because the cab drivers regularly didn't have the slightest knowledge of the area as soon as they passed the Frankfurt city limits. Erroneous journeys, unsuccessful inquiries with colleagues - the journey home was always an odyssey.

Why do I remember this? Because these days the CEO of Uber Austria demanded that the test of local knowledge for obtaining the driving authorization should be dropped without replacement; it was obsolete in times of digitization (note: for rental car drivers like those of Uber, this obligation was only recently introduced in Austria). Is it?

I wrestled with myself for a while, but I think the man is right. Surely it's not a mistake for cab drivers to have some local knowledge. After all, systems can break down once in a while. But we live in the age of digitization, and it's more important to me that the driver drives properly and perhaps also speaks the local language. In truth, I don't care whether he follows his knowledge or a digital helper on the way to Hanau.

Perhaps the following will get around to the representatives of the cab industry: If you're late, life punishes you.

The Oxymoron in Legaltech

In the context of the anniversary event of the German EDV-Gerichtstag - I reported - a judge had raised the postulate of scalability, but at the same time human control, in connection with the machine anonymization of court decisions. An exceptionally educated, highly esteemed colleague spoke privately of an "oxymoron" in connection with this. Is he right and are oxymora perhaps even generic characteristics of legaltech?

If one follows the various dictionaries of terms, oxymora are combinations of contradictory words or terms to or within a statement. This probably applies to the example cited at the beginning, because automation and human control run counter to each other. But are there other examples?

In a recently published survey by a major professional information provider, there were quite a some clues: For example, the respondents rated collaboration with clients highly, but at the same time considered communication by phone and e-mail to be indispensable. Or the cost-effective automation of office processes is desired, while at the same time the continued use of the law firm's own forms and formats is postulated.

I don't know if these are oxymora in the strictest sense of the word. Most importantly, I wonder if those who express these contrary desires are even aware of this fact. If the answer was no, it shouldn't be surprising. The buzzword bingo in legaltech in its monthly variations of terms is not to be outdone. What non-specialist is supposed to keep track of it all? And the feeble query "What importance do you attach to AI. in the future?" is already confusing in its generality. The appeal to legaltech providers can therefore only be to present clearly defined products in equally clear language and not to keep changing the vocabulary.

Otherwise, the legaltech providers themselves are the oxymoron.

"The 'robojudge' is technologically impossible."

With this clear statement, the Executive Director of the Center for Legal Technology and Data Science at Bucerius Law School in Hamburg, Dirk Hartung, tried to direct the discussions about the digitalization of law into more realistic channels.  "We tend to be concerned with the social impact of technologies, the use of which is far beyond any meaningful period of consideration," Hartung said.

The occasion for his lecture was the 30th EDV-Gerichtstag (EDP Court Day), which for well-known reasons was again held virtually rather than in Saarbücken.  Prior to this, Florian Matthes, professor of computer science at the Technical University of Munich, had given a highly interesting talk in which he screened the main technologies that are currently shaping the development of legal informatics. Matthes did not hesitate to address controversial topics. When he describes Natural Language Processing (NLP) for legal texts as an essential field of research, hardly anyone will disagree with him; his appeal to rely (again) more on rule-based expert systems, on the other hand, is likely to meet with headwind.

The topic of NLP also reveals a topic that ran through the entire event. One might agree that "computer scientists and lawyers must become friends" (Maximilian Herberger) if one is concerned about the digitalization of law. However, the very mention of "understanding" legal texts as a link between the processing of existing texts and the generation of new ones triggers fundamentally different associations in lawyers and technicians: the linguistic-logical understanding of a legal issue literally collides with the mathematical approximation analysis that is meant by "understanding" from a technical point of view.

Also of direct interest to Austria is the issue of anonymizing court decisions as a prerequisite for their publication. Work on automating this labor-intensive process has been going on for some time in both Germany and Austria. It is interesting to note a thesis of the judge Isabelle Biallaß: Anonymization not only has to be humanly controlled, it also has to be scaled, depending on whether the anonymized text is to be made available to science or industry.

That could still take some time.

Legal publishing house may offer contract generator - no violation of legal services law

WoltersKluwer offers a so-called contract generator in Germany under the "smartlaw" brand. The Hanseatic Bar Association in Hamburg filed a lawsuit against this with reference to the Legal Services Act and won at first level. However, the German Federal Supreme Court (BGH) has now confirmed the amending judgment of the Cologne Higher Regional Court (I ZR 113/20 - Contract Document Generator).

In detail, the BGH stated that the creation of a draft contract with the help of the digital legal document generator is not an unfair act according to § 3a UWG because it does not represent an unauthorized legal service within the meaning of § 2 para. 1, § 3 of the Legal Services Act (dRDG). The defendant's activity consists of creating contractual documents on the basis of the user's specifications with the help of the software programmed and made available on the Internet. In doing so, it does not act in a specific matter of the user. It had programmed the software on the basis of thinkable typical factual constellations, for which it had developed standardized contract clauses in anticipation of the given answers. The user's individual circumstances, which go beyond the usual case, would not be taken into account in the creation of the contract document - similar to a form book. Therefore, the user does not expect a legal examination of his specific case.

The German bar association is conducting a whole series of lawsuits against providers of LegalTech applications; so far, they have mostly ended in favor of the providers. However, it should be noted in each case that the German legal situation has no direct equivalent in Austria.

Germany: BGH backs debt collection companies against the legal profession

A decision by the German Federal Court of Justice is causing considerable unease in the German legal profession. What was at issue?

A debt collection company had low-threshold claims from consumers assigned to it in order to bundle them into a class action and then bring them before the court in its own name. A professional association had filed a complaint against this, claiming that this procedure exceeded the scope of the so-called "collection privilege" of the German Legal Services Act. The Court of Appeal also agreed with this view and denied the debt collection agency the right to sue. The Federal Court of Justice, however, does not consider this view to be supportable.

As reported by lto.de, the court refers almost exclusively to the question of whether the consumers who have assigned their claims have a special interest in protection that speaks against the collection agency asserting their claims. In short: this is not the case, since the collection agency must also be represented by a lawyer in court. The BGH also considers the business model, according to which the collection agency assumes the sole litigation risk in order to retain 35% of the awarded claim amount in the event of success, to be appropriate. On the other hand, there is no question of a protective interest on the part of the legal profession, nor are they unduly disadvantaged by the fact that the lawyers themselves are barred from success fees to this extent.

German lawyers must accept, according to the article in lto.de, that they will face even more structural competition from debt collection companies.

 This case law is not directly applicable to the Austrian market, as the "debt collection privilege" of the German Legal Services Act has no direct equivalent in the Austrian legal system. 

Who is being harmed by bad campaigning?

Last week, I reported on this space about the sale of Kira to Litera and the intention to release a standalone product for corporate lawyers under the Zuva brand. The media release emphasized that Kira technology would continue to be operated and developed under the new umbrella.

Somewhat surprisingly, UK vendor Luminance responded with an aggressive campaign urging existing Kira customers in the legal sector to switch, portraying the Kira-sell in a distinctly different, negative light. One could read from the Luminance press release that it was a child disposal, the fact that the existing management would perform a strategic advisory function was left unmentioned.

Several media are now asking what drove Luminance to this activity, and who actually benefits from bad campaigning. On the one hand, this is coffee-bag reading, because without knowing the reactions of the customers, one will not come to a conclusive answer. In any case, the commenters seem to assume that Luminance itself will come out of this damaged. However, I think that the issue shows the enormous pressure that even established legaltech companies are under. Is it the concern of falling behind in development resources? Is it fear that their own customers will switch to Litera's comprehensive software solution because they appreciate the all-in-one concept? - Everything is possible

Markets on the move

As reported by alm, Legaltech group Litera is acquiring industry leader Kira, effective Sept. 1 of this year. The product and brand are to be continued, and at the same time Litera is aiming for market expansion. Why and to what extent can this also be significant for Europe?

Kira is a specialist in AI-based automated document analysis. Main use case is due diligences / data rooms in transactions. Accordingly, Kira's customers are mainly law firms, globally.

Litera, which has grown enormously through numerous acquisitions, describes itself as a leading provider of legal workflow and workspace software. The focus is clearly on speed and effectiveness of legal work towards client service and retention. Litera sees itself as one-stop-shop for any type of legal work. That's why Litera aims to leverage Kira's core expertise in its own software suite. 

The big difference, however, is that Litera also operates in the corporate law market, and by spinning off its own new startup Zuva, Kira is also expected to follow this path in the future.

Consultants on both sides of the Atlantic won't be too happy to hear that.