Geoff Dunnett, Managing Director of Shieldpay and the host of Shieldcast, looks back over the transaction management series and the conversations had around legaltech and what the future may hold.
You can find all the episodes in the series on our podcast page.
Over our recent podcast series, we discussed the transaction management lifecycle with some of the leading names in the legaltech world. We asked them about the challenges they encountered working in or with a law firm and how they are overcoming these through technology interventions as well as looking forward to the new opportunities emerging to disrupt the industry.
As the series has drawn to a close, we wanted to reflect on the conversations had and pull out a few of the key points discussed. The following is a snapshot of the six episodes and the insights shared by our guests, but of course there is so much more to listen to in each of the podcasts.The why: Reasons for adopting legaltech
1. To fix the disconnect between parties
In our conversation with Eliot Benzecrit, Co-founder of Avvoka, we discussed the need for law firms and general counsels to be more aligned when working on a matter. Eliot retold his experiences working as a corporate lawyer at Slaughter & May and the frustrations caused by not sharing knowledge of the clauses in the drafted contracts between parties. It was this pain point that motivated him to co-found Avvoka, telling us: “We wanted to give information back to the owners of the contract”.2. To enable better cross-collaboration
Our first guest of the series, Oliver Owen, talked about what StructureFlow offers as a visualisation tool. Importantly for lawyers, having the deal structured and laid out as a visual representation gives all parties a comprehensive view of deal and the stages ahead to enable better coordination and ensure everyone’s on the same page.3. To allow lawyers to do the job they want to do and improve job satisfaction
Richard Mabey, Co-founder of Juro, spoke to us about his former career as a corporate lawyer and his grievances in the job, saying: “I felt like I was bogged down in a low value process work as opposed to the high value complex problem solving that I wanted to be doing”.
This was also mentioned by Daniel Grant-Smith when we talked about Legatics’ recent research into the barriers for adopting legaltech. When interviewing lawyers, it was clear they wanted to use what they learned in law school, "rather than high pressure admin that’s really stressful and doesn’t feel very useful”. In this way, it is important for lawyers to find tools that can take away these low value pieces of work to free up their time to focus on the work they trained to do.What’s stopping law firms: Barriers to adopting legaltech
1. Adopting new tools isn’t the priority
With Daniel Grant-Smith, we delved into the research he and his team conducted on the barriers to legaltech adoption. Their recently published whitepaper goes into finer detail on their conclusions with key suggestions for how to overcome the barriers. In the episode, he mentioned the critical point that adoption and change isn’t the priority for many lawyers. Especially for the large firms that are making high margins on their work, they don’t consider the need for efficiency and improving their service delivery. Time plays a large role in this as the industry on the whole is high pressured and driven by billable hours. With this, many don’t have a spare moment to learn how to use a new tool.2. Disruption isn’t the way forward
Jack Shepherd, Legal Practice Lead at iManage, spoke about how best to engage with lawyers to adopt legaltech tools. For him, it’s not about disruption and proposing fundamental change. Instead, legaltech companies need to build trust over time and take on board customer feedback to build a product that really works to solve their problems.How: Embedding legaltech into the transaction management lifecycle
1. There is no ‘one-size-fits-all' way about it
Jack Shepherd highlighted the need to approach adoption firm-by-firm and role-by-role. In our conversation, he spoke about the differences in attitudes between associates and partners. For associates, it’s all about the “standard lawyer persona”, meaning you need to lean into their stereotype of being overachievers. Young lawyers are motivated by approval from partners, so it is hugely important to get senior level buy-in and ensure those at the top are leading the charge. Daniel Grant-Smith also touched on this, sharing that his research showed there is a greater need for role-modelling from the firm’s leaders to increase adoption.
Partners, however, are driven by profitability and client satisfaction. Jack told us legaltech companies should talk about how their tool improves process improves margins and the importance of efficiency for the client when presenting to partners for buy-in.2. Social engineering
Adoption needs to be made simple. Anthony Rose, Co-founder of SeedLegals, told us of his approach of ‘social engineering’, explaining that where lawyers tend to want everything editable and customisable, legaltech doesn’t need to nor should allow this. Rather, the platforms need to give less options and more standardisation.
In a similar vein, Jack Shepherd spoke about building data collection into everyday practices rather than creating completely new processes. If new means of technology or data collection can be embedded into the everyday rather than needing to be disruptive and require hours of training, lawyers will be more receptive to the new (or slightly adjusted) ways of working.3. Changing mindsets
Currently, legaltech can seem a bit overwhelming or perhaps a nuisance. With Daniel Grant-Smith we talked about how the pandemic changed attitudes towards digital transformation and has given lawyers a better understanding of how technology can improve their working practices. We saw larger scale adoption of tools such as e-signatures and video conferencing software. However, more complex tools that can bring greater change to legal service delivery are further behind. There needs to be a greater drive to change the mindset of technology from being disruptive, fear-inducing and frivolous to being essential to the industry. Technology needs to be seen as necessary for deals to be run better, risks to be mitigated and services to be delivered at a higher standard and as a key driver for firms getting more instructions, clients and, ultimately, profit.
Richard Mabey had a positive outlook on the future for law firms. He told us that: “The real positive of this is law firms are stuffed full of clever people, right? Clever people who want to do high value work. So, it's not that the lawyers don't want to change. I'd actually think the good lawyers really do want to change. They don't want to be doing process work. They want to have better enablement and tooling, and they want to make the right decisions. I think this is ultimately what will drive the innovation in the law firm market.”What’s next: The opportunities available
1. Data for decision making
In a number of the episodes, we tackled the big question of data. While a hugely valuable area for so many industries, it is yet to be fully embraced by legal services. For the legaltech companies we spoke to, however, there is so much potential to be unleashed for lawyers. In particular, we discussed how data can be used to determine ‘what is market’ and make “finger in the air” decisions, as Jack Shepherd called them, such as fee estimates.
An interesting example of this came from Eliot Benzecrit and the work Avvoka has been doing with the Loan Market Association (LMA) in standardising and automating their documents. He told us Avvoka brings a slightly different approach to the project in the way the tool ‘containerises’ the data which can then be used to inform the wider market.2. Delivery of structured data at the end of the transaction
Owen Oliver brought to our attention feedback he has heard from clients for the need for “the delivery of structured data at the end of a transaction”. From his conversations with clients, they said it would be valuable to have the data from the deal structured and shared alongside the transaction Bible to be used as a reference for future legal matters.3. Machine learning (ML) to draft legal documents and integrated automations to trigger tasks
A couple of ideas that we floated with Eliot Benzecrit on the future of legaltech were around ways to improve the drafting and use of contracts throughout the transaction management lifecycle. For him, he sees great opportunity to use ML technology to make suggestions when drafting and marking up documents based on a database that comprises of clauses and terms previously used. Then, when these have been fulfilled, the contract could trigger the follow-up task to be completed. He used the example of integrating Shieldpay so when a term is met, funds could be released from escrow.4. AI
The research Legatics conducted was part-focused on legaltech adoption and part-focused on AI in legal services. Daniel Grant-Smith explained to use some of the barriers to the industry taking on the technology: “Often they require a bit of a village to put in place, requiring lots of infrastructure and systems, models need to be trained, people need to be proficient with the use of the software and you might need certain people employed specifically to look at the use of the software. They can also often be scary to use, a bit intimidating.” However, their approach was focused on ‘microservices’ to bring the technology into their platform, making it accessible and easy to use.Why it isn't happening now: The blockers to technology taking over the deal
1. Moral and ethical issues of data
With both Jack Shepherd and Anthony Rose, we touched on the macro level impact data can have on the industry. For Anthony, SeedLegals is used by a substantial proportion of the market and therefore he feels a great deal of responsibility for how the fundraising platform functions to ensure it doesn’t cause long-term and wide-spread damage to the market.
Jack talked more about the risks of having a centralised bank of information. While having an open database of deal terms would be invaluable for lawyers to determine what is market, whoever owns and manages that would be very powerful and could (either intentionally or not) cause huge detriment.
Interestingly, Eliot Benzecrit mentioned and compared sharing deal terms to the Open Banking system which could be something the legal industry considers in the future as a way of managing transparency and embracing opportunities for innovation.2. Data hygiene
We asked Jack Shepherd if he thought there could be a way of sharing data and iManage collecting information from across the industry to develop a database. While, as explained above, there are ethical barriers, he also spoke about the stumbling block of data hygiene. In order to merge and combine data points from numerous firms, there must be a clear, standardised process in place which can be easily adhered to by lawyers across the industry.3. Billable hours
The demise of the billable hour is a highly contested debate. While there are strong arguments for changing the system, we are not yet at the critical point of inflection. Daniel Grant-Smith spoke about movement towards fixed fee work. With this, there is more of a drive towards efficiency and increased margins, and therefore more of a drive towards the use of digital tools. However, for the firms that are adamant to continue to bill hours (mostly larger international firms), technology is reducing their workload which impacts the profitability of the firm. Daniel made the comment that “it's like that classic thing of telling millionaires that they need to change their business models. They're probably thinking, “really, do I? Because it's going pretty well for me at the moment”.
The conversations we’ve had over the past six episodes have been hugely insightful and brought up some critical debates on the future of legaltech and the transaction management lifecycle. We’d like to say a huge thank you to all of our guests for this series for taking the time to speak to us as well as contributing to our latest eBook. Their chapters in the book take some of these key points of discussion further to explore the role of the emerging technologies and legaltech tools in the future of legal service delivery and how we may (or may not) see fundamental change to the industry.
We’ll be taking a short break but will are looking forward to another series of the Shieldcast podcast soon!
Shieldpay's technology-led solution provides Third-Party Managed Accounts (TPMA), corporate escrow and paying agent services across the professional, financial and legal services industries. Get in touch to find out more.