Corporate lawyers in 2019 find themselves being bombarded with opinions, information and conferences about Legal Tech, Legal Operations, Legal Project Management, Artificial Intelligence and Blockchain. All great topics and, undoubtedly, a big part of the future (at Legadex we’re working very hard on all of them), but amid all the excited talk, isn’t there a risk of putting the cart before the horse? We think so, and it arises because, for most legal departments, the logical approach is to get their core information in order before focusing on the possibilities within Legal Operations and Legal Tech.
As a corporate lawyer, you are responsible for legal risk management and the provision of well-founded advice on issues that are important to the company. But how can you do this thoroughly and efficiently if you can’t get a near-immediate overview of the underlying facts? For example, suppose you need to know the legal structure of a foreign subsidiary and the recent management decisions? Suppose you need insight into your key business contracts and guarantees – do you have it? Can you provide your company’s accountant, legal firm or regulator with the information they want fast? It’s almost too scary to figure out just how much time lawyers waste searching for, inquiring after, miscommunicating about or (worst case) delivering work founded on inadequate information. And this is not just an issue of time and costs – it doesn’t make the job any nicer, either.
90% of legal departments are working with below-par documentation
At the moment, we think (and we believe it is a conservative estimate) that the state of basic legal documentation is poor or bad in about 90% of legal departments. We’re talking about basic documents concerning the company’s legal form, decisions, contracts, guarantees and mandatory registrations. This doesn’t even consider the important information that is scattered around and inaccessible within the company. As a legal department, how can you play a proactive role and push ahead on Legal Tech and Legal Operations if your basic documentation is still lying in a folder in a cupboard, or effectively locked away on someone unknown’s hard disk or in their mailbox? To ask the question is to answer it: you can’t; it is an illusion. The only conclusion you can draw is that having fast access to high quality legal information is an absolute prerequisite for being able to do a good job. It sounds like an open goal, but there remains so much to gain in this area.
Our advice in these situations is to not over-complicate things and begin with the basics. Let the high-tech ways of working come later. If documentation is literally still stuffed in a cupboard, begin by determining what you really need and start selecting within that. Next, digitise your documents and make sure everything is converted to OCR (Optical Character Recognition) for automatic searching. If you want, Legadex can help you collect, digitise, classify and index your data. This prevents a digitisation project dragging on endlessly and ultimately ending up a shambles.
Got your documentary ducks in a row? It’s playtime…
Once you have created your digital overview (including your already-digital documents), you can start playing with the data. How good is the information quality-wise? What's missing? Is some of it outdated? Are there errors? Here, data analysis technology can help; you gain rapid insight into your business information. We will explain this in greater depth in a future blog.
Then there is the issue of where best to store your digital information – simply on a shared hard drive or does the cloud question raise its head? The choice of good, accessible, cloud-based systems for legal entity management, contract management and document management has grown rapidly in recent years, while the use of locally installed software – often expensive and user-unfriendly – is falling rapidly. Legal data management systems are something else we will explore in future blogs, including looking at the available software, what’s common in the Netherlands and what to consider when choosing and designing systems for corporate housekeeping, contract management and document management.
The good news is that the cost and ease of getting your legal basis in order continues to fall – if you tackle it properly in one go. Once you’ve done that, you’re set to ride the wave of whatever new developments emerge. But first, the basics.