The Deal Force + The Library Force of Legal Tech

What is driving legal tech? What are the forces that are shaping its use and the development of the tools in this field? The answer appears to be several distinctly different, but intertwined forces, two of which can be called the Deal Force and the Library Force.

The Forces of Legal Tech

For some years it’s been apparent that people take very different approaches to legal tech in terms of what it means, what the main focus ought to be, and what its purpose is.

This always struck this site as something of a conundrum that needed solving. You can speak to X and they say: ‘The real focus is data, how it’s arranged, where it’s kept, how it’s moved, what systems and methodologies you use to organise it. This isn’t about efficiency, economics, or anything like that, it’s about knowledge management, it’s about putting the information lawyers need in front of them in an organised way.’

And you can then turn to Y and they reply: ‘Yes, data is essential, but that’s just part of it. Legal tech is there to create an output for a client, so it’s fundamentally about bringing efficiency to legal work. It’s about reducing time and creating repeatable processes that help lawyers to complete their work without having to rely just on manual inputs. This also implicitly has an economic aspect.’

This difference in approaches also accounts for the occasional friction one sees from time to time, and also the uncanny phenomenon of conference presentations on ‘legal tech’ that seem to completely ignore the existence of one of these world views.

How can this be explained? These patterns are not contradictory, in fact they are overlapping and deeply interlinked. Yet, they seem sometimes to move with their own momentum, their own constant drive.

And so, it seems that what we have are several different constant patterns in legal tech, or what we can call Forces.

The Deal Force

Lawyers create outputs, i.e. they perform ‘legal work’ to get to an outcome, e.g. creating a contract, or a review of a set of contracts so a merger can take place, or they are managing the documents needed in that transaction so it can complete.

Here then we have a range of tools that can help, such as:

• document automation – to help create a contract, whether simple or complex, to make that deal move forward.
• contract pre-execution review and negotiation tools – to help other parties manage their side of a deal.
• deal management platforms – systems to help control and give visibility to all the moving parts of the transaction, helping with collaboration and deal closing.
• document review – such as for due diligence, which is needed as part of a deal.

These tools are also all about data, for sure, but the force that is moving things along here is the deal. E.g. a partner is asked by a client to execute a deal, and perhaps they are asked to make this process fast and to reduce unnecessary costs where they can.

They are thinking about this in terms of speed, efficiency, and how can they tap previous processes to make this event move along more easily. They are looking at where tech can help to inject firm knowledge more rapidly into this process, and how any manual review work can be reduced also with tech. They may also look to transaction platforms to help manage things, and speed the closing.

And they probably will be thinking about the economics of it all. They are in charge of the deal, the team, and the economic output, i.e. the cost to the client and the profit that will return to the firm as a direct result of how the deal has been conducted.

They may not be thinking about the data that can be extracted at the point of contract creation, or afterward using NLP. They may not be thinking about how the contracts created can be used to refine the firm’s KM library. And they may not worry too much about where all that knowledge came from. They just want the deal done, because that is what the client wants and that is what makes the firm stay in business.

In short, to them it’s an essential, powerful drive that is moving this output forward and all the decisions about what tech to use: it’s the Deal Force.

The Library Force

But then, as noted, there is another powerful force, which is just as essential. In fact, it likely pre-dates the Deal Force in terms of its importance to legal tech. It is the base of most legal outputs and a primal energy that seeks to accumulate knowledge and make that knowledge searchable. This is the Library Force.

The Library Force is all about collecting and storing information, adding value to it to turn it into knowledge, and then making it easily searchable and deliverable to the point of need inside a firm or inhouse legal team.

It’s not necessarily seen as all about efficiency, and cutting time, and driving economic improvement – even if those are implicitly part of it. The goal is to create and then deliver knowledge, something without which the lawyers would struggle. This is The Library Force.

• DMS – the base layer of it all – where you store all your documents.
• Precedent and clause libraries – more detailed base layers which can feed into many of the above tools.
• Legal research libraries – essential for disputes work.
• Regulatory and compliance databases / update systems – feeding in external knowledge and shaping internal knowledge.
• BI dashboards – used primarily by inhouse teams to see long-term business information obtained from contracts, whether at the point of creation or afterwards with NLP and manual review.
• (CLM – clearly covers much of the above, but there is also a Deal Force aspect as well, so CLM can be seen as an overarching approach encompassing both forces; a bridge, one could say.)

The accumulation of knowledge and arranging it into libraries pre-dates all other legal tech, and it stems from physical law libraries, hence the term. The urge to make a library is strong in all knowledge industries, but in law it is overpowering.

No KM means making lawyers spend far more time on ‘search’ than would be economically possible, and that would also force them to make everything from scratch, and also where every output was a ‘shot in the dark’ without any prior reference. I.e. without the Library Force creating resources for them lawyers would find it a lot harder to function.

Clearly then the Library Force is just as powerful as the Deal Force, maybe even stronger.

The Discovery Force

As always, there are aspects to physics that are not neat and tidy. That’s just how nature is. The same goes for legal tech.

Where do we put eDiscovery? It’s not a deal, as there is no transaction. It’s also not really a KM exercise as the event is a one-off, i.e. a dispute between X Corp and Y Corp creates an eDiscovery output that is almost unique to that case.

And yet, there it is. It also likely pre-dates many of the tools formed out of the Deal Force’s drive. So, for now, let us create a third force, the Discovery Force that covers tech used in litigation review and disclosure work, as well as investigations.

Other Forces

Are there other forces at work? Quite possibly. As noted, nature is not a neat and tidy system, so there well may be others. For example, what do we do with time, billing and accounting software? We could put this with the Library Force, as it’s all about collecting and ordering data. But, others may feel that it needs its own category. However, then we start to move away from legal tech itself, i.e. tech designed to improve legal outputs and head more towards broader sector categories, e.g. accounting software in general.

Conclusion

We’ll leave it there for now, and Artificial Lawyer will come back to this again, refining these descriptions and perhaps adding to them. However, the conclusion, at least from this site’s observations, is that much of legal tech is shaped by two powerful and ever present drivers: The Deal Force and the Library Force.

—

By Richard Tromans, Founder, Artificial Lawyer, March 2021.