Published in Asian-mena Counsel: Legal Innovation & Technology Special Report 2019
By Nick Ferguson, In-House Community
The way that legal services are being delivered is changing rapidly.
Technology has been changing the world of work since the dawn of the industrial revolution, but it is only in the past decade or so that technological innovations have truly started to disrupt the way that legal services are delivered.
The reason for this is both extremely complex and startlingly simple. Artificial intelligence, machine learning, the internet of things, blockchain and many other relevant developments are all enabled by a continual, evolutionary improvement in computer processing power, as predicted by Gordon Moore back in the 1960s.
But there is nothing evolutionary in the changes that are taking place within the legal industry.
“While emerging technologies such as blockchain and AI are constantly disrupting ‘business as usual’ across all industries, it is anticipated that the impact within the legal industry will be most significant given that this sector is traditionally conservative and averse to change,” says Michael Lew, founder of LegalComet and chief operating officer of Rajah & Tann Technologies, a firm at the forefront of legaltech innovation in Asia. “The underlying push to embrace innovation and, to a certain extent, disrupt the law firm’s current profitable business is driven by the shifting dynamics and expectations from the future clients of legal services.”
As the new economy has become mainstream and companies such as Facebook, Apple and Google — or Alibaba, Huawei and Tencent — have grown into multi-billion dollar global enterprises, the inefficiencies of traditional legal practice have become increasingly frustrating to modern clients.
Trusted advisers and dynamic rainmakers are still as relevant as ever, but everything about the way their services are delivered is fair game for disruption.“Those who wish to maintain the status quo will be left behind, while a whole new spectrum of opportunities awaits those who choose to reinvent themselves to remain relevant in the business of law,” says Lew.
Now that we have crossed the threshold into technologies that can displace traditional legal roles, the developments will keep coming and will continue to fundamentally change the way that law is practised. The role of a corporate lawyer in 2019 is not very different to the role in 1999, but you can be sure that the role in 2039 will be starkly different.
“Technology has re-cast the definition of legal work,” says Preeti Balwani, general counsel of Hindustan Coca Cola Beverages, a wholly owned bottling subsidiary of Coca Cola. “Legal delivery is no longer the exclusive domain of the legal practitioner but a combination of the law, technology and business expertise. It is essential for legal departments to challenge perceptions around the work they do and use technology to improve legal delivery. Effective legal delivery supported by legaltech will in turn foster a more robust tech culture within organisations.”
While many of the innovations within the legaltech sector are emerging from Europe and the US, Asia is starting to catch up as governments, regulators and industry bodies begin to understand the benefits and encourage change.
“It is very encouraging to witness the growing momentum by law firms in Singapore in redefining the roles of legal professionals from solely the practice of law to skill-based positions such as legal engineer, e-discovery specialist, innovation manager, legal data analyst and others,” says Lew.
Indeed, embracing innovation could be even more important in emerging Asia than in the developed world. All the same forces driving adoption of legaltech innovations in more developed markets exist in Asia — in addition to the region’s rapid economic growth. That means lawyers in Asia are getting busier at an even higher rate than in the US or Europe, where growth is slow in comparison and the legal profession is mature.
“The Australian and Asian markets are growing rapidly, which creates challenges for organisations with the ever-increasing amount of data being generated and the need to comply with evolving regulations,” says Stuart Hall of e-discovery company Relativity.
At the same time, budgets are always under pressure. In the past, investing in technology invariably meant new servers, data centres, staff and training, all at great cost. For law firms and legal departments alike, the size of such investments has traditionally been difficult to overcome for all but the most tried-and-tested products, such as e-discovery. But the development of cloud computing is making new tools more accessible.
“Customers are increasingly looking for solutions to their unique data demands, regulatory requests and areas outside of e-discovery,” says Hall. “Our SaaS [software-as-a-service] platform, RelativityOne, allows us to better serve these demands with its scalability and performance, without the significant challenges of investing and maintaining IT infrastructure.”
In private practice, law firms are responding to the needs of their clients by changing the way they are structured and how they hire. Internal incubators, innovation labs and legaltech consulting arms are becoming more common, and so are non-legal and tech-focused roles.
“Market-leading firms are developing and producing new solutions by leveraging disruptive technologies, often in concert with multidisciplinary and client-facing legaltech teams that are effectively in-house solution vendors,” says Eric Chin, a strategy consultant at Alpha Creates. “Hiring innovation consultants, process engineers, developers and design thinkers into fee-earning roles is unprecedented. Those few firms have launched their legal operations’ consulting arms as a means to elevate the relationship from solving legal issues to operational and strategic issues for general counsels.”
In Asia, firms such as Rajah & Tann Technologies are among those pushing the boundaries. The firm offers a range of legaltech expertise, from e-discovery and digital forensics to consultancy, training and data breach readiness and response.
“We are the go-to legal team for data protection and cybersecurity in Singapore because of our ability to understand clients’ needs as they transform themselves to embrace technology and navigate the digital economy, as well as our unwavering pursuit of quality and efficiency in our services,” said Steve Tan, a partner specialising in technology, media and telecoms.
This kind of approach is increasingly important. Unlike the Luddites who smashed textile machinery during the first industrial revolution, today’s young lawyers will need to embrace technology to stay relevant. For law firms and legal departments alike, it is a matter of disrupt or be disrupted.