Why Legal Tech Matters (Even If No-One Notices)

‘If a legal tech tool is used by a lawyer, but no-one notices, does it really matter?’ That is the question, and answering it reveals plenty about the nature of legal tech and where it fits into the human jigsaw of value chains. I’d also argue that it does matter, here is why.

Legal Tech and Value Chains

If we want to get a sense of why legal tech matters even though the vast majority of humans on this planet will never be aware of its use, then we have to consider value chains.

Value chains, generally, are a way of describing how many different inputs go into the creation of a product or service. E.g. the laptop that you may be reading this article on has received hundreds of inputs from: the furthest reaches of the planet to gather materials to build it, logistics companies that moved those materials to the right places to be processed and assembled, the design team that decided where everything should go and how it should look, the managers who oversaw the whole thing, the team that planned its sale and marketing, the team that deals with customer care, and so on.

You get the picture: it’s a vast network of activity on many different levels. Woven throughout this complex web of human ingenuity and industrious effort are professional services: lawyers, accountants and others, all feeding into this.

And for lawyers it’s even more complex, as companies have inhouse teams, which in turn rely on external lawyers, and the majority of legal tech tools are aimed at this latter part of the ‘legal value chain’ that helps to deliver everything from cornflakes to pension products to us all.

In short, to be aware of legal tech tools (at least used in the commercial legal world) as a regular member of society you’d need super-human levels of perception, hence the altered reference to the philosophical thought experiment: ‘If a tree falls in a forest and no one is around to hear it, does it make a sound?’ This was then later taken on by quantum physicists to explore the nature of reality, especially observation and measurement, leading to the even more testing question: ‘If a tree falls in a forest and no one is around to hear it, does it actually happen?’

Even experts in economics, such as Michael Porter, stated in his own version of the value chain model that a legal input was right at the back of the line, placing the work lawyers did for a company in a category he simply called ‘Infrastructure’, which included a wide range of things that included general administrative work and accounting. And so, legal tech – i.e. software tools designed specifically with the intention of helping lawyers to do their work, is even one step back beyond this.

I.e. If we look at the entire kingdom of inputs that go into Company A making a product or service that you or I might buy, then the legal tech input into all of this is indeed there, it’s just invisible to the end consumer.

That might be very different with access to justice tools aimed at helping the general public, and increasingly now platforms such as CLM tools for inhouse teams can create benefits that are directly and consciously present in the minds of, for example a company’s Sales team, such as providing an overview of licence renewals across the business – as those details may have been contained in contracts which the CLM system has helped to pick out.

That said, the majority of legal tech’s effect on the world is felt indirectly once it passes beyond the realm of lawyers.

So, if we follow Porter’s model, which states that legal inputs are really only a very small (albeit totally essential) part of the total mass of inputs, and legal tech’s benefits are even further back beyond that, does this kind of software input really matter? Yes, it does, and this is why.

Here to Serve

Possibly one of the biggest misconceptions about legal tech is the idea that it is here to replace lawyers in some way, that what we have is a Zero-Sum Game, where tech tool X means the loss of Y number of lawyers. Or that legal tech, by itself, can ‘change the world’ in isolation from the profession it is founded upon.

The reality is that legal tech is here to serve. In the case of commercial legal needs it is primarily here to serve lawyers, who themselves are serving: the external law firm serves the client’s inhouse team, the inhouse team serves the company, the company serves the customers and its shareholders. I.e. we are all serving someone, even if we don’t really dwell upon it as a fundamental truth of how human society works.

So, if legal tech is here to serve, what is it doing? As explored earlier, it’s here to make the working life of lawyers easier (see article), whether on the external or inhouse side.

And, it sometimes needs to be underlined, no business wants to bring in automation or any other type of tech process that makes life more complicated or does anything other than clearly and smoothly improve upon what is already there.

The legal tech company wants to prosper, just like the law firm does, but it’s when objectives align that everything sings in unison and the value chain is happy and free-flowing.

I.e. A legal tech company wants to sell X product, but this product requires a lot of upfront effort by the law firm, its output is sometimes useful and sometimes not, while the law firm can provide the service it is asked to provide successfully without this tech in a way that still allows it to make the money it wants to make. This input is just too weak to really help the value chain. So, there is little traction.

Now, take another example, Product Y requires very little effort to install and is quickly able to start providing value. It is clearly easier to use this than whatever was done previously (e.g. digital law libraries accessible on your phone vs rooms filled with dusty books of caselaw that you physically have to visit).

Now you may want to get your rulers out and measure things – but you don’t need to, just ask the people involved in that ‘legal production line’ how things are going. If they are happy (or happier), then the tool works and is worth having.

I.e. where you want to get to is something like: ‘Wow, this stuff is so good it just sells itself!’

But, fundamentally, the product is here to serve. By serving it makes life easier for the lawyers involved, whether on the buy or sell side of the legal value chain.

A Better Legal Value Chain

It seems fair to say that improving any part of the overall value chain is good for society as a whole. Humanity wants a mass of different products and services to sustain itself – and also bring us all some pleasure – so, anything that removes friction, that reduces costs, that speeds delivery, that reduces risks, that improves the overall output of products and services into our hands is ‘good’.

In terms of the legal value chain tools designed specifically for the processes within this part of the system, they are therefore also ‘a good thing’.

Moreover, lawyers working at the limits of their human capacity can only do so much. We can bring in new business models, e.g. ALSPs to help specialise with certain tasks, such as a team of paralegals that only does doc review, but generally there is a real limit to what lawyers can do with their bare hands and ‘bare minds’.

Legal tech is therefore essential if we want to improve the legal value chain – which in turn is one segment of the larger value chain that serves society.

Legal tech breaks down process bottlenecks, can provide instant access to huge amounts of organised information that would be impossible to obtain that quickly without software, it can speed document review, it can even provide useful statistical predictive insights, it can also break down barriers between external and inhouse lawyers by the creation of tools that can automate the production of answers to legal questions, or link data flows to provide a more symbiotic relationship……which has got to be a good thing if we are thinking in terms of improving the flow of value chains.

Conclusion

Even though the vast majority of people on this planet will never, not even once, stop to consider whether a legal tech tool has had some impact, however small, on the products and services they use – this growing category of software can indeed have a profound impact.

This is because it improves the legal value chain, which feeds into the wider, global mass of value chains, which in turn feed society with what it needs. In anyone’s book, helping society as a whole has got to be something that matters and legal tech very much has its own role to play in all of this.

By Richard Tromans, Founder, Artificial Lawyer, September 2022