Kollegen im Gang

27.08.2018 | Blog Legal Tech: How lawyers benefit from digitisation

Lawyers avoid social networks, use the PC rather as a typewriter replacement and read thick law books instead of websites to solve their cases – this idea about the everyday working life of lawyers still prevails in many minds. Digitisation has long since also affected the legal departments in companies and also the work in law firms. Here are some practical examples of Legal Tech.

Digitisation has by no means left the legal sector unscathed. The term “Legal Tech”, which is made up of “Legal Services” and “Technology”, includes all software and online services that help specialist lawyers in their daily work. This concerns topics such as matter management, document management, legal spend analytics, compliance management, e-billing and last but not least contract analytics. More and more law firms are cooperating with technology companies today. Legal departments of large corporations work with IT companies to develop new products or afford ever larger IT service departments,

Lawyers and specialist lawyers often have to deal with large quantities of contracts in their day-to-day work, which they have to process quickly and under time pressure. It is important to extract the essential clauses and data points from page-long texts and to interpret them correctly. IT trends such as big data analytics, content analysis, artificial intelligence and machine learning processes are therefore of particular benefit to lawyers and specialist lawyers.

The following three examples illustrate how digitization is driving the work of legal departments:

1.) Due Diligence: Reading and Analysing Contracts

Particularly in due diligence procedures, when companies are up for sale, lawyers have to work through large quantities of contracts such as employment contracts, rental contracts or other agreements. Depending on the size of the company, several thousand contracts can come together and have to be examined. Often it is only a few clauses, formulations or key words that matter.

Thanks to modern technology like Legal Tech, lawyers no longer have to work their way through piles of paper and laboriously check each contract individually by printing it out and editing it with highlighters. Contracts that are available in paper form can now be digitized quickly and easily. First, the contracts are scanned. To turn the scanned contract into readable text, OCR technology, which is able to recognize text, even if the contract is only available as an image in JPEG or TIFF format, for example. The contracts, which are now available as readable PDF or Word documents, are then uploaded into so-called virtual data rooms. In these data rooms, specialist lawyers can now work together on the contracts.

Machine learning methods help to classify the large number of contracts and assign them to specific topics. Contract analysis software such as the Contract Analyzer is able to extract the relevant clauses or key points from these contracts and list them clearly for the lawyer, specifying the source of supply. This saves the lawyer the reading of long contracts and also helps him with an initial quick analysis of show stoppers. Even when working through standard contracts, such as employment contracts, the lawyer saves an enormous amount of time because he no longer has to check each contract individually for a specific relevant clause. The software does this for him and lists the contracts and clauses clearly. Using the Contract Analyzer user interface, the lawyer can now check off the individual clauses, comment on them or forward the contract to the colleague for further review.

2.) Fraud Detection: Compliance and E-Discovery

Whether DSGVO (GDPR), Basel III or FCPA – companies must meet a wide range of compliance requirements and guidelines on data protection and data security – otherwise they face severe penalties. Here too, Legal Tech software can help to identify relevant content in contracts or documents and uncover possible weak points. The IntraFind DSGVO Monitor helps, for example, to search through e-mail, ERP, CRM or file systems for personal data, so that compliance officers, data protection officers and the associated IT service units can trace and delete them more quickly and specifically – and also respond promptly in the event of a DSGVO request for information within the four-week period.

E-discovery is about securing electronic evidence in cases of fraud or violations of the law so that it can be used in court later on. For example, corporate counsel may have to check thousands of outboxes and e-mails sent for irregularities or suspicious information. The software is able to cognitively search large amounts of e-mails of a company for certain keywords and concepts and to mark the relevant places. This gives the investigator an overview of where, for example, sensitive data has left a company, what is only possible with intelligent AI methods and goes far beyond classic word recognition in conventional systems.

3.) Monitoring

Lawyers must not only work with large quantities of contracts, but also know as soon as there is a change in the law. As a rule, newsletters from legal publications and certain online portals provide information on such updates. To be informed in real time and independently of newsletter editorships, software like the Change Analyzer helps. The Change Analyzer crawls external data sources such as certain websites and searches them for changes. As soon as a law or regulation has changed, the lawyer is informed.

Conclusion: Legal Tech permeates legal departments

“The machine will replace man – there will be nothing left of many law firms.” The future will not be as gloomy. Despite technological progress, the legal profession will not die out. The extent to which digitisation has affected the legal sector is particularly evident in legal advice: If calculations for family and inheritance law can now be easily carried out using special online tools and online portals provide the necessary text modules for drawing up leases and wills.

Computer programs support the creation of contracts and also the research of information. Artificial intelligence and machine learning procedures help to classify and structure a large number of contracts and extract the relevant clauses. However, Legal Tech cannot and will never replace either legal advice or the legal profession per se. Digitisation relieves lawyers and specialist lawyers of standard tasks, such as reading long contracts, minimises risks arising from human error and ensures that relevant clauses are no longer overlooked. This benefits both the lawyers and the clients.

The author

Franz Kögl
Franz Kögl is co-founder and co-owner of IntraFind Software AG and has almost 20 years experience in Enterprise Search and Content Analytics.
Franz Kögl