How to extract maximum value from your legal tech investment

Main visual : How to extract maximum value from your legal tech investment

With legal tech budgets booming, analysts at Gartner are warning Legal & Compliance departments to take a precautionary cold shower before spending any money.

The figures are indeed remarkable. Gartner’s latest data shows that budgets are up from $233 million in 2017 (itself a record at the time) to $1.2 billion in October 2019 – with another quarter still to come!

After years when L&C always seemed to be at the bottom of the pile for tech investment, the temptation to go out shopping right away with all this money would be a mistake, says Gartner. And – contrary to what you might be expecting to hear from me – I agree. Simply buying platforms, solutions or discrete apps from legal technology vendors is not the right starting point.

Even if these solutions have a creditable heritage in L&C departments, they won’t necessarily solve your challenges.

Every organization is different and first of all you need to get 100% clear on what you are trying to fix. Gartner puts forward a rock-solid approach that advocates isolating the business outcomes you want and working backwards from there.

Once you know your destination, you can isolate the necessary capabilities and - only then - the precise tech needed to create or augment those capabilities.

 Let’s think about business outcomes

Improved legal productivity and accuracy are, says Gartner, the top-two changes desired by its L&C clients. And yet, the experience of L&C practitioners who have implemented, for example, contract management technology is not overwhelmingly positive.

Perceived positive value across many possible outcomes, including quality improvement, cost reduction, and customer satisfaction is only between 21% and 28%, and even the best performing factor, efficiency improvement, only scores 42%1.

I think it is highly likely that these unremarkable paybacks stem from a lack of clarity about current and missing capabilities before technologies were chosen.

One of the biggest capabilities hurdles that any L&C departments faces is finding and retaining specialist skills – be that legal expertise or technology specialists needed to extract value from many tech solutions. As transformation projects proliferate and global unemployment rates continue their downward trend, we hear time and again that finding the right people is really, really tough.

Building a transformation roadmap that does not address this issue is, in my opinion, a major mistake.

Yes, you can identify the capabilities you want to create or improve, but can you really deliver the necessary change with your current team, which is unlikely to include tech expertise? And where do you hit the limit when it comes to pushing down legal tasks to less-qualified, lower-cost team members?

The route to legal’s digital transformation

Workflow tech has produced huge progress here in conveyancing, for example, where paralegals now conduct a large percentage of any house purchase process, but we are now at the limits of what can be achieved without a disruptive new technology.

One of those is Fujitsu’s own Sholark, which incorporates AI to break through these limits and barriers to even greater productivity.

Take what looks like a simple task. You might think cataloging the many legal documents that arrive in your department is a relatively low-level job. But most L&C departments are still doing this manually: Sometimes with perhaps very-highly paid end users classifying documents themselves.

Or perhaps they simply don’t have the time, inclination or financial justification for this sort of work, so it is left uncompleted, with negative implications for efficiency, accuracy and customer satisfaction.

Those few cataloging automation tools that are being used are based on metadata (simple factors such as customer name, date of contract, etc.) but not the actual semantic content of the documents. This makes digital or even automatic searching of the meaning of documents largely impossible.

There is also likely to be a wide variety of non-standardized formats and sources of information. These are typically non-digitized, in a variety of unstructured formats, accessed via different platforms and tools (for example, Lexnet, emails and written documents) and within images and documents in heterogenous environments – local and in the cloud. Not such a simple assignment after all.

Fujitsu’s AI-based Sholark solution uses Natural Language Processing (NLP), so can be used by non-specialist staff using common-sense language to build a ‘knowledge graph’ about information in hand, finding all the links that may exist between the items of information – matching names in the document to ownership, for example.

It then builds self-service discovery tools to give lawyers and paralegals easy and fast access to the right data for case work. It also finds and exposes non-obvious, hidden data links, as when legislation has resulted in positive outcomes in two apparently unrelated cases. 

Sholark is already solving the legal and compliance challenges that create day-to-day bottlenecks for lawyers, such as automatic classification, search and summarization of judicial sentences. For the Justice Department of a Spanish Government ministry, Sholark has reduced the time dedicated to this type of task by 60% and increased the efficiency of its cataloging process.

It is also using cognitive computing techniques to generate automatic document summaries, simplifying the review process, and to track the performance of relevant KPIs, such as the number of sentences per organization or per category, the duration of the legal process, the most common searches, among many others.

As Gartner says, breaking through the limits of what is currently possible to generate massive service or cost differentiation is precisely when you look at disruptive technologies such as augmented analytics and Artificial Intelligence (AI).

As Sholark is proving, “disruptive” does not mean “not yet obtainable”. To find out more about how we are working with L&C departments to deliver their transformation, contact me either on LinkedIn or Twitter.

1 Gartner 2018 Legal Technology and Analytics Survey