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  • By Georgios Stathis

The Shock of Legal Tech: No one Ignorant of Technology Should Read This


Introduction

As a son, grandson, and great grandson of lawyers, I fell into the law trap. From a young age, I was exposed to the legal profession and have experienced traditional lawyering. Recent developments in the field of technology have affected that traditional way of operating within the legal sector, giving rise to the field of legal technology (also known as ‘legal tech’). Legal technology is concerned with the use of technology as a means of advancing the delivery of legal services. The legal industry is undergoing a fundamental change, which has not yet been understood to its full extent by the majority of the legal community. The following example illustrates how this change occurs.

Walking in the streets of Amsterdam for the first time is a once-in-a-lifetime experience for any tourist. Most tourists come from countries where bicycles are not used as often as they are in the Netherlands. Anywhere one walks in Amsterdam, one will definitely be distracted by all of the attractions spanning throughout the city. However, while one tries to sightsee, bicycles are crossing from every direction, causing some minor disorientation. The feeling of which is reminiscent of this painting.

What the bikes represent for a tourist in Amsterdam is what legal technology represents for a legal professional used to the traditional practice of law. Inadequate understanding related to existing technological advancements and the potential of technology cause this disorientation. [1]

This article investigates how legal technology shapes the legal industry and legal education, and proposes solutions to bridge the gap between traditional lawyering and technology-based lawyering. The article will briefly introduce the importance of legal technology, incentivize an interested member of the audience to look further into the subject, and hopes to inspire legal institutions to adapt to educational needs.

Facts & Figures

Technology is introduced to the legal industry through innovation, which can be observed on two levels. The first level concerns in-house innovation, where internal research and development occurs in legal corporations. The second level is related to start-up innovation.

At the first level, one may observe that law firms already compete to that extent. For example, in the Financial Times’ ‘innovative lawyers’ annual competition firms or key individuals who create or make use of innovative legal technology solutions are awarded. As for the second level, according to legal complex, a company that quantitatively measures the legal startup landscape, the number of startups has grown to 5,908 in September 2018 from 22 in January 2010. [2]

A considerable interest is noticeable in creating and adapting to new technological innovations in the legal industry. That interest raises the question of why such a motivation exists. According to the figure of the International Bar Association (IBA) in the next page, those are the main drivers for that change.

Arising Skills

The innovation observed in the legal sector creates a certain demand, which should be matched by a certain supply from law school graduates, who should possess the necessary survival skills in such a technology-based legal environment. These skills could be separated into five different groups.

The first and most important skill that arises is the need for the development of character qualities as fundamental factors for adapting to change. Unfortunately, building character qualities has not been a fundamental concern of educational institutions, even though it can be considered as the number one factor that provides successful results to people interested in change. The best example for one to understand this is through the criteria investors have when investing in new ventures. Building a company is the best example of understanding the importance of adapting to change, as no company has a certain future. Investors, therefore, have a substantial need of mitigating risks by taking into consideration different factors, out of which the most important is the character qualities of the people running the companies in which they are interested.

Warren Buffet supports this notion in that any successful investment he has made is based on investing in exceptional people with certain qualities. [3] Inspired by his mentor Benjamin J. Graham, he promotes the importance of values, not as a means of acquiring financial returns, but as qualities in peoples’ character that assist them in taking the best approach in their decisions, in other words, the one that extracts the most value.

If educational institutions do not focus on building such qualities for their students who will later on become professionals, how can they expect them to survive in an uncertain future?

In addition, the introduction of data science to the legal sector has created the need for analysis and interpretation of data. Data science is the study that uses scientific methods to extract knowledge from factual information. Memory and repetitive learning have been the greatest driving forces in using previous data by lawyers in traditional practice. With the increasing interest of data science, legal data may not only be used in the advantage of lawyers but of the greater legal community, by lowering costs and time, and thereby increasing the efficiency of legal services. Lawyers can use data science to predict, analyze and better understand potential future outcomes and gather knowledge for more appropriate action.

Another skill that needs careful consideration is communication between legal and non-legal professionals. New roles unfamiliar to lawyers appear, which for professionals with other backgrounds, such as that of a legal engineer (explained in the next paragraph) or a computer scientist, would be more suitable. A communication barrier, however, is observed between lawyers and non-lawyers, given the alienation of law in relation to other scientific fields in recent years. The position of lawyers, in the traditional sense, currently becomes less advantageous and the need for survival creates the need for new partnerships. These new partnerships, in order to last, need to grow in a welcoming and understanding environment, from both sides. For that to occur, biases and preconceptions from previous years should be eliminated and new forms of communication should be adopted to nurture a healthy and productive culture.

The fourth skill is legal engineering. No one can describe better the skills required for that position than Daniel M. Katz, the leading U.S. professor of legal technology. In his article, the ‘MIT School of Law’, he describes the importance for law schools to build polytechnic disciplines for their students. [4] He describes how law firms can be seen as an equation consisted of law – tech – design – delivery, where law is the substance and tech, design, and delivery is the process.

Legal knowledge for a long time has been semi-structured. With the introduction of technological methodologies, such as data science, and applied skills to legal education the possibilities for systematic learning, structuring and delivering legal knowledge increase.

Last but not least, lawtrepreneurship, entrepreneurship focused on the legal profession, is vital. Looking at the two levels of innovation, one can observe the importance of business skills for legal education. Even though some universities embrace this approach, greater interaction with start-up communities would lead to greater results.

In fact, between the two levels of innovation, start-ups are far more important. This is because in-house innovation is based on advancing the existing reality of the market (going from 1 to N), while start-ups are based on creating ground up solutions that bring the market to a new reality (going from 0 to 1), which fits more closely to state-of-the-art technology and constantly changing societal needs. [5]

This is directly linked with legal education, since universities also tend to focus on the existing reality rather than focusing on adjusting to the new reality. A potential problem is that in the same way that most start-ups fail to provide impactful value for the creation of a new reality, some universities may also not be able to provide substantial education value that corresponds to the new reality.

One can therefore imagine how a technology-based law firm may operate in the not-so-distant future. Adjustments on each level of a firm’s operations will be required. The firms that will gain a competitive edge in the market, however, will not be those that will quantitatively absorb technological solutions, but those that will rediscover themselves by experimenting on a qualitative basis by adopting technological solutions.

Conclusion

Most law students begin their legal studies by maintaining the expectations of the 20th century, and it is not until they start looking for work when the first disappointments occur. The current pursuits of institutions providing legal education to adapt to a technology-based lawyering do not match the necessities of the market to a proportional extent. As one can see in the law school innovation index, U.S. legal institutions already compete on the basis of who is providing greater quality and quantity of legal technology education courses. [6] Which approach should law schools take?

The answer may be found in Ancient Greece, specifically in Plato’s belief that the youth could be educated through various incentives, such as the walls of the city they live in. [7] What is interesting is the way in which he turned his belief into action. In the lintel of his Academy he placed the expression stating: ‘no one ignorant of geometry should enter’. Perhaps a solution for law schools would be to place on their lintels the expression stating: ‘no one ignorant of technology should enter’.

Notes

[1] The example and title of this article are inspired by Alvin Toffler’s ‘Future Shock’, (1984), Bantam Books

[2] https://www.legalcomplex.com

[3] Peter Bevelin & Warren Buffett, ‘A Few Lessons for Investors and Managers from Warren Buffett’, (2012), PCA Publishing

[4] Daniel Martin Katz, ‘MIT School of Law? A perspective on Legal Education in the 21st Century’, (2014), University of Illinois Law Review

[5] Peter Thiel & Blake Masters, ‘Zero to One: Notes on Startups, or How to Build the Future’, (2014), Crown Business

[6] https://www.legaltechinnovation.com/law-school-index/

[7] Plato in his dialogue ‘Laws’ - various editions of this dialogue can be found.

About the Author

Georgios Stathis (1995) is a PhD Candidate at the Center for law and Digital Technologies (eLaw) at Leiden University since 2017. He studied International and European Trade and Investment law (LL.M.) at the University of Amsterdam (2017) and Global Law (LL.B.) at Tilburg University (2016).

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