Acts of innovation

In the context of London International Disputes Week (LIDW21) last week, Luke Tucker Harrison correctly observed that we should expect evolution rather than revolution in the modernisation of legal services.

This seems consistent with the adage that evolution follows necessity. Last year for example, a sudden need for video conferencing and digital document management materialised, transforming well established but largely under-utilised technologies into essential tools.

We typically think of innovation as building a new product or tool, but useful innovation can also be about doing new things. However, as creating such change is difficult enough, I would suggest that legal innovators think first about changing expectations and behaviour before embarking on the acquisition or development of new tools.

Evolutionary needs

As we return to the new normal, what are some of the needs that will promote legal technology innovation? At the very least we should revert to cost reduction and efficiency. New technology will naturally continue to evolve and gain adherents, but I don’t believe it will drive innovation as much as other factors. In the near-term I would expect to see three themes dominate:

• A more critical view of technology development;
• A heightened interest in improving processes based on available technology; and
• The continuing rise of corporate counsel’s influence.

Process trumps technology

Being a tech geek is now a desirable trait, but we may have gone a bit far in thinking every consultancy and law firm should be building tools. Many recent tech development initiatives go a long way to demonstrate a focus on efficiency, but don’t necessarily achieve it. In any event we can expect that, going forward, technology  development will be subject to greater business case rigour and ROI tracking.

Technology in search of adopters

A focus on process is sensible given the availability of a broad range of tools and processes.  Many of these remain under-utilised, partially due to a reluctance to depart from tried and tested processes, or to absorb the initial added cost of adopting new techniques. Fortunately, such barriers tend to diminish over time.

The impact of process over technology can be illustrated with an example most of us can relate to—contract negotiation. Imagine a negotiation that involves a lawyer instructing an expert, each of whom is advised by in-house counsel. The process begins with a draft sent by one party to the other as an email attachment. Various revisions are then exchanged with comments from each of the four stakeholders. One party might write handwritten amendments and return a scanned copy. Another may type comments in the covering email, referencing contract sections by number.

If this negotiation process seems familiar, you may recognise how inefficient it is. It requires that each party spend a significant amount of time locating comments from the other parties, consolidating them, producing new drafts, and circulating them until the final draft is sent for signature. Instead, the parties might have used modern processes based on tools that centralise the agreement online, inviting each party to view and add comments in real-time. The system keeps track of all inputs, versions, and enforces the proper use of track changes. Finally, all parties are invited to execute the final draft digitally with a few clicks (or finger taps).

The somewhat simple hypothetical about contract negotiation is a microcosm of much larger legal processes that fail to use readily available technology developed to improve such processes. In the end the job gets done, but with unnecessary expense and delay.

Don’t innovate alone

Naturally, there are good reasons why we miss out on opportunities to use optimised processes. In addition to the disincentives mentioned above, several elements need to come together:

• Awareness that a better process is available;
• Faith in the process;
• The ability to implement it; and
• The means to refine it over time.

It is also difficult to set and refine a process when the participants are from different organisations and may involve different teams from one matter to the next. For this reason, it is essential that someone take the lead on innovation—explaining the need to change, defining the process to be used, and instilling confidence that the investment will benefit everyone involved.

Corporate counsel as catalyst

Who should act as such a team leader to drive process improvement? I would suggest corporate counsel.  This role sees the big picture, including cost and performance, and has the authority to request a particular performance standard from legal services providers.

The benefits would be significant. Whereas the negotiation of a contract is a relatively contained task, the equivalent benefits of efficiency savings in the context of complex investigation or cross-border litigation can run to seven figures.

As I think of our own corporate counsel, I recognise that most already have a lot on their plate, and more significant concerns on their mind, such as protecting the firm and ensuring compliance with a growing set of regulations. The solution should therefore include the allocation of a resources to develop the competency to lead on process improvement.