How businesses are using the systematic thinking of lawyers-turned-tech-entrepreneurs
The Managing Partner of Hogan Lovells Russia on the modern solutions in the sphere of LegalTech, their impact on the positions of lawyers in the business community, differences in legaltech solutions for the countries of Anglo-Saxon and Roman-German law families and the most promising products in the legal technology market.
In anticipation of the International conference Skolkovo LegalTech. BlackEdition which will be held on November 29 in Skolkovo, we met Oksana Balayan, managing partner of the international legal company Hogan Lovells in Russia. She is one of the most respected experts in corporate law, M&A transactions, legal support of private equity investments, Balayan also pays close attention to the development of special technologies and programs for lawyers.
Many professional spheres, first of all, the financial sphere, human resources management, logistics, have already experienced the powerful impact of technology. In order to pay for the purchase or make a bank transfer, we only need a couple of clicks on a smartphone. Today, the same processes are developing rapidly in the field of law. In a conversation with Rossiyskaya Gazeta, Oksana Balayan told us how new technologies change the very meaning of the legal profession.
-It’s been widely discussed that automating daily tasks in law departments opens up new opportunities for lawyers. From service professionals they can become a crucial element of management to define the company's strategy. Are businesses ready for coming changes? Does this change require lawyers as leaders, lawyers as policy-makers?
- Without a doubt, they are ready. The world has already changed. Entrepreneurs have been using the brains and systematic thinking of lawyers for a long time; in many companies, lawyers became effective managers, making use of their extraordinary understanding of business context. But lawyers are really immersed in a swamp of routine work and a sea of laws, codes, instructions and regulations.
LegalTech allows to automate routine processes: from compiling uniform lawsuits to creating basic templates of complex (M&A) agreements.
New technological tools allow lawyers to take a breath, reduce the risk of errors that can be made, and free up the time for more complex tasks, and to enable businesses reduce budget expenditures on the basic legal support and get a strategic business partner in the person of a competent lawyer.
Businesses expect us to work faster and better. But entrepreneurs also expect that the lawyer will pay more attention to complex legal solutions, focused on business development. I’m sure in it.
- Who is placing greater demands on LegalTech solutions: in-house lawyers or consulting services?
- LegalTech solutions are now in demand everywhere.
Digitalization has rapidly embraced all aspects of our lives, where the legal sphere is no exception. Today, the speed of mastering the automation of processes in marketing, HR and, of course, in the legal segment largely determines the company’s success.
In-house lawyers usually know quite well where they have to automate business processes and where it can be done. For example, I witnessed how the head of the legal department of a large Russian company with IT specialists designed a legal bot, who replaced the employees and started answering the same questions in departments of sales in all regions. It allowed to save up a lot of time for lawyers, and all answers have become uniform. And the legal department is focused on more complex tasks. Counselors don't fall behind. Law firms now invest a lot in LegalTech – both for special projects of their clients and in order to improve their competitiveness, reduce the price and increase the speed of legal services through technology. You can register a license for a Hoga Lovells product and then use it to create your own forms and documents. I believe that the future is in the hands of those products which in-house lawyers and a consulting service will be develop and finalize the project together.
- Which LegalTech products have been developed or applied at Hogan Lovells?
- We’ve been very instrumental in using LegalTech products. Among them is Legal Project Management (LPM), a structured model of legal services, which allows us to clarify the scope, objectives and results of each project/transaction, to manage the expectations of clients and teams to ensure the quality of work and profitability measurement, to define and plan each stage of the project. We also provide LPM training for those clients who are interested in its use within the company for more effective management of the legal practice.
To date, we have trained more than 1,700 Hogan Lovells lawyers and clients. Our portfolio also includes the Collaborate Data Room, an electronic document management system. It is distinguished by security and reliability, high speed of data processing, has a wide functionality for structuring information.
DraftXpress is our know-how, designed for the automation of standard documents. This product allows us to reduce the time required to prerare the first drafts of documents and to focus on individual solutions for the client that precisely meet their needs.
We have also developed Collaborate iSheets – a good product for data collection and management, which can also be uploaded to DraftXpress. In one click you can create any number of similar documents, where each of them will have individualized data.
- Today, we can observe the implementation of innovative solutions in a variety of areas. Do you plan to use robots or artificial intelligence in legal practice?
- Some our products are now connected to Kira (AI - Artificial Intelligence), which learned how to check documents and find arguments and other information we need to create automated documents. Now we work to ensure automatiс data loading, found by Kira in DraftXpress. It means that the document is self-composed. Kira reads, transmits data while DraftXpress receives and reacts by filling in the response A to the argument A (only using all logical chains). The distinctive feature of Hogan Lovells solutions suggests an integration of several products into one system to perform the entire process from A to Z.
- You are one of the most respected professionals in M&A. Can LegalTech solutions to a greater or lesser extent serve in legal support of such transactions? Aren’t they too complicated?
- LegalTech tools are a powerful support tool, including the area of M&A. Let's start with due diligence.
Technological solutions help to process a huge volume of data and documents, make a report and get focused on the risks that need to be taken into account in the contract of business purchased based on the audit, rather than on the monotonous reading of hundreds and thousands of contracts in the data room.
So far, we have only started applying these solutions in transactions, where we need to analyze the Russian documents. But it's only a matter of time. LegalTech solutions allow us to create the basic versions of Term Sheet (Protocol of Intentions), sales agreement, shareholder agreement in a few minutes, and devote more time to the individualization of a product to match a specific transaction.
Hogan Lovells applies an individual approach to each request and offers the customers the solutions to meet their specific needs at this point. We are not only guided by technological trends, we understand the very essence of automation, simplification of work processes.
- Are there any unique products at the Russian market? May we refer to those, for instance, the Card Index of Administrative Affairs?
- Pravo.ru has been actively moving towards LegalTech solutions over 11 years now. It has created a number of products, including the Card Index of Administrative Cases and the website of Pravo.ru. CIAC was a truly revolutionary project on the Russian market. I admire my colleagues.
As far as I know, CIAC is now used by both parties to arbitration cases and the companies, who need to check the reliability of the counterparty. As for uniqueness, I would like to say again that the needs of each specific business are unique. Accordingly, customized products can help the customer more efficiently.
For example, Hogan Lovells launched Eigen for the Russian market. Kira, which I mentioned above, understands only Latin letters, but this machine understands Russian and Chinese.
AI can be trained on a specific case, a specific area, which is what we do. All our solutions are specific: we do not use generally acceptable solutions, and we code every document individually for a client, a project, and practical use. These machines were originally conceived for the corporate practice as part of due diligence and other contract audits, but now we are experimenting with other practices.
-What are the prospects for commercializing Russian LegalTech products? Which challenged can you see?
- The products which are being developed for the Russian market, are very local. There are restrictions to the scope of such products, that’s why they may not always be in demand at the outside market.
And let's not forget Kaspersky’s story: there is still a concern about Russian technological solutions. Possibly, in-house lawyers make use of the Russian products. Real customer needs are very specific. There is a tough competition between software developers, that’s why I believe that the prospects of commercialization do not look promising.
-Which problems in producing LegalTech-solutions would you highlight? At which level do you experience difficulties: technology, data, interface?
- The linguistic component proved to be very important, even though a career in translation seems to be a thing in the past. However, coding a unique document without being able to speak the language in which it is written is not yet possible. Otherwise, you just get internet templates which you are still trying to trade. All best solutions are global, i.e. designed for the English-speaking markets.
-How does the specifics of the Russian legal system affect solutions in the sphere of legal technology? Is the lack of case law rather a plus or a minus in the development and the launch of products, related to the analysis of court practice ?
- The countries with common law jurisdictions have technological products to analyze large databases, for instance, they have LexisNexis.
The United States, for example, use an algorithm to analyze all common laws (everything is publicly available in e-form), including decisions made by a specific judge in the past (each judge has its own approach to the investigation of cases), and makes a forecast for the court’s decision.
This is the so-called predictive analysis. We have different legal traditions. It is hard to predict anything in our case as we are primarily guided by the law.
Therefore, in Russia it’s good to focus on other aspects, for instance, on improving automation – the machine analysis and high level processing to facilitate the decision-making of lawyers.