A tech-savvy company does not necessarily have a tech-savvy legal team. Nor, for that matter, does it necessarily encourage the use of tech among support functions. But a supportive environment is at least a start. It is refreshing to see that 81% of respondents said their companies were supportive of the use of technology in the legal function. At the same time, 67% thought their companies were more supportive than their rivals. At least 18% of them must be wrong…

But this support has not necessarily translated into financial backing: nearly half (45%) of GCs said that insufficient budget for was the biggest barrier they faced to obtaining technology for the legal team. Knowing what to buy among the many systems available is also becoming problematic, with 73% of GCs either unsure of what technology was available or feeling that there was no suitable third-party tech to meet the legal team’s needs.

There are also cultural barriers to implementing legal tech, sometimes in surprising places. Japan may be the home of everything high-tech, from robots to video games consoles, but its businesses still lean heavily toward tradition when it comes to ways of operating. Angela Yuen, deputy general counsel at JERA, Japan’s largest power generation company comments:

‘In every Japanese organisation there are more layers than an onion. For instance, taking an approval system from paper to electronic format can be a huge task because under the old system of internal approval there will be a large number of steps required at various levels and no one wants to be cut out of a decision.’

‘Furthermore, while people in Japan embrace technology, the legal field has been slower adopting legal technology due to a conservative, careful approach. I think these are two significant factors in why Japanese corporates have been slower to embrace legal technology’.

The long and costly road

When it comes to wish lists for new technology, GCs are looking for either a simple efficiency boost (38%) or readily customisable software (24%). Surprisingly, value for money (15%) and ease of use (10%) were not big concerns for GCs looking to implement new systems. Clearly, legal teams accept the road to tech-enabled efficiency gains will be long and costly.

But the costliest of all solutions, advanced automation and AI, have yet to gain traction with Asia Pacific’s GC community. Only 23% of those surveyed said they were using an advanced tech solution in the legal team, with many deterred by concerns over the cost and reliability of the such systems (29%), difficulties finding the right software (20%) and their own lack of product knowledge (21%).

There was also a healthy degree of scepticism on display. ‘The maturity of AI solutions for legal work is lacking, and I think there is more marketing hype than real AI solutions on the market’, comments Bernard Tan, Asia Pacific managing counsel at Agilent Technologies. There were also concerns that more advanced software would generate more risk for the business. As one respondent commented:

‘There are a number of advanced technology options, but none so far have I found to be absolutely effective. Those that do exist seem to create another layer of liability, which can add to the responsibilities of the legal team. No single tech platform is able to resolve multiple issue, regardless of what their sales teams claim.’

There have, however, been positive experiences. Ivy Wu is head of legal for Greater China at American business-to-business IT service provider DXC Technology. Recently, DXC signed the largest-ever managed services partnership agreement with UnitedLex, giving them access to a suite of advanced legal technology systems.

‘The AI-based legal research translation tools mean we accrue significantly less time and cost penalties when compared to having a dedicated department for this task’, Wu comments. ‘A document can be translated very quickly and will only require a very simple manual double confirm, which is very useful for some litigations, especially international ones which require a lot of translation. The feedback from the business from seeing this data is very positive because they are able to see the cost saved by the legal department is greater than our budget’.

Friend or foe?

GCs may not be using advanced technology en masse right now, but they are keeping a close eye on developments in the field. More than half (55%) were concerned that legal tech would disrupt the in-house job market, while just over a third (38%) felt that lawyers were well equipped to adapt to technological changes within the profession.

But, as Susan Cattell, senior legal operations manager at AMP, concludes, the end game is not lawyers being made redundant, but lawyers learning to do things more effectively.

‘I look forward to the disruption of the industry when we get this right, as when we do, the possibilities of better service to the end-clients, lower cost processes and better managed teams should promote an even better working environment.’

JERA is one of the largest energy companies in Japan but it is also a relatively new company established as a joint venture between Tokyo Electric Power and Chubu Electric Power.

Having a short history has in fact helped us to onboard legal technology. If our company had a history of a hundred years, it would be almost impossible to fundamentally change the way the legal group works because there would be so much tradition built up that the organisation would be very resistant to change. With a new business one finds that nothing is set in stone. We are also fortunate to receive strong support from our ICT group, which is leading the digital transformation of our company.

But even with a young company, doing something new and bringing in a big change is not easy. One must secure budget and buy-in from management. One must also acknowledge the fact that Japan is a very traditional culture when it comes to doing business. Historically, Japanese companies have relied on paper, ink and physical signatures or seals to confirm documents.

However, COVID-19 has forced companies to examine technological solutions and embrace non-traditional working practices. This may have opened their eyes to the possibilities that technology provides, which will lead to a corresponding increase in demand. We are now able to get corporate approval at all levels via electronic confirmations, and paperless working is moving ahead throughout the company.

We are currently introducing and deploying contractual review legal technology. We introduced two [tech providers] for contractual review purposes, one English and one Japanese. I find this necessary as a Japanese solution is needed for Japanese-language documents and an international provider is needed for English-language documents. Some international companies also claim that they have Japanese language adaptability, but the quality is limited because of the nature of AI. Unless they process a huge amount of data, the AI will not grow to a level of capability that satisfies us.

The next area we would like to incorporate legal tech into will be that of workflow management. At the moment, all of this work is undertaken manually; we pick up the phone or receive emails and the consultation starts. In the future we would like to introduce management software to assist this process.

While not all our legal staff are equally eager for legal tech, particularly if they feel learning a new way of doing things will be time consuming, the technology we have introduced so far has proved to be very successful.

We would like to be even more ambitious with the technology we introduce, but we have not got there yet. Take something like document management systems. Transitioning to this type of software is so complicated that we are not sure which supplier is the right fit for us, or whether any company is able to do what we need. We are watching and waiting for the market to evolve.

Naturally, given the company’s size, the legal group’s work is on a global scale, and we need to work with both Japanese and English language documents. The uniqueness of language is one factor as to why Japan does not have as advanced a legal tech sector as other mature economies such as the US or UK. Japan is to some extent isolated from the global market because of this. It is making some headway in catching up, especially due to the COVID situation, and will hopefully progress further.

I firmly believe that the trend of increased legal tech adoption in Japan will continue and we will see an increasing number of companies introducing some sort of legal tech, whether that is document management, contract review or higher-end AI solutions.

We are looking for improvements to our legal technology in most areas. Although I believe we are a bit ahead of the curve in terms of openness to technology adoption, our use of legal tech is limited to contractual review and the contractual review itself – we are talking about relatively standard documents.

If technology advances and other areas can be also processed by legal tech, then the accuracy and efficiency of our work will be significantly higher, which is why we are looking out for new products and evaluating them on an individual basis. Adopting advanced technology to assist the company is one of our top priorities over the foreseeable future.

It’s fair to say that legal operations in Australia has evolved differently to the US, where businesses typically have much larger legal functions with many more lawyers in the organisation. There’s quite a sophisticated supporting structure around all of that which has effectively been brought into the legal operations umbrella. Australia is a little different.

The Corporate Legal Operations Consortium (CLOC) in Australia evolved out of a desire to bring together a group of legal staff working at some of the larger companies who had an interest in sharing things that we were learning through our operational improvement initiatives. That included technology but it also included other less tech-focused initiatives aimed at just improving our efficiency and service delivery.

CLOC, particularly in the US, also has quite an extensive array of online resources and online collaboration tools, including some active chat forums where people ask information about what’s happening, and seek insights from other CLOC members that might help them with particular problems that they’re facing or issues they need to solve. In the last year or so, CLOC has also put in place a law firm membership so that external legal service providers can share what they’re doing from an operational improvement perspective.

Legal operational enhancement can be a real challenge if you’re starting entirely from the ground up. One of the great things about CLOC is that you can very easily learn from what others are doing, so that you’re not reinventing the wheel. You are learning from others’ experiences, which makes it a really good forum for embarking on that journey, connecting with people who’ve been through similar experiences and being able to benefit from their experience of the things that have gone well or not gone well in that context.

It’s very difficult to actually objectively assess whether what legal tech providers are saying their product or service delivers is actually what it delivers. Being able to leverage the experience of people who have used those products and services to see what the actual output is helpful.

In my own in-house legal department, we were using an array of technology from the very basic, starting out at the bottom end in terms of core functionality, things like an internal matter management system, which generates data about what the team is doing and feeds into reporting on what we’re up to. We also have a document management system as well, that allows for ready storage of documents.

We’ve built a number of these tools, for example, a self-serve non-disclosure agreement tool that allows people in our businesses – without having contact with a lawyer – to be able to generate and execute a compliant confidentiality agreement. There’s also marketing review tools and a contract review tool that we’ve built and are continuing to evolve. Our objective is to identify processes that our lawyers would otherwise do that are not particularly complex and not particularly strategically significant. And where we can, making use of a tool so that can be done within the business in a user-friendly way that manages the risk.

Going forward, we are exploring the use of more sophisticated tools, particularly more advanced document review technology. The idea is to do an 80/20 review of incoming contracts so that against some key parameters that we’ve identified so that it really helps the lawyers to narrow down their focus on what’s really important in terms of those contract reviews.

We are fortunate in our business that we are relatively free to look at using technology ourselves, although there is some formality in the process. We have to ensure the software we are interested in complies with our data security frameworks, so everything needs to be reviewed by our cybersecurity team to make sure that it is compliant with our standards. The other – perhaps obvious – issue is fitting it into our budget. Aside from these issues, though, there is a fair bit of freedom for us to explore and test different offerings.

I would make the observation that lawyers increasingly need to be at least attuned to technologies and what they do. There’s an open argument as to whether lawyers need to be capable in skills like coding et cetera, my view is that this is probably not necessary but that they at least they need to be familiar with the technologies that are available, and need to be comfortable living with these.

Lawyers who are beginning their careers now are going to be looking at a very different way of practicing in 10 or 20 years’ time, and they need to be adaptable to that. Some have said that what is really important for lawyers is perhaps not so much blackletter expertise but around building empathy and their soft skills development. I think there’s certainly some wisdom in that.

Lawyers across the world like to talk about rubber stamping things, even though few who qualified in the last 15 years will have seen a rubber stamp let alone used one to certify a document. But, as we found out speaking to GCs across Asia Pacific for this special report, when a lawyer in that region talks about rubber stamping something, they often mean it literally.

‘Most documents I deal with require physically stamping,’ lamented one Indian GC. ‘Even if you want to automate some part of that process in the end you will need to get a stamp. That means a trip to another office, a taxi ride somewhere else in the city, a long wait in a queue. All to get that piece of paper stamped.’

India may be notoriously bureaucratic, but the problem was far from unique to that country. GCs from Japan, Korea, Indonesia, and even ultra-efficient Singapore told us of cultures rooted in face-to-face contact, deference to senior decision makers and established hierarchies. As a result, even that simplest of legal technologies, the electronic signature, had failed to take root.

The obstacles facing GCs who wanted to introduce technology felt unmovable. Until a pandemic hit. After nearly a year of lockdown, businesses across Asia have embraced new ways of working.

To understand just how much lawyers have adapted to tech in these strange times, GC magazine teamed up with World Services Group to survey over 100 of Asia Pacific’s leading general counsel. We asked them about everything from the impact of Covid-19 on the legal team’s efficiency to their use of AI, how they find the right software (and the money to buy it), and their expectations of outside counsel when it comes to technology.

We found evidence of a region that is almost uniformly embracing technology, a region where even the most entrenched cultural habits may be coming to an end. But let us not get carried away.

Any discussion of how GCs in the Asia Pacific region are using legal tech is liable to fall into the trap of focusing on culture first. Certainly, this special edition shows much evidence of country-specific traits that are restricting or encouraging the use of technology, but it also shows that GCs the world over are facing the same issues when it comes to technology.

Broadly, there are three steps involved in the acquisition of legal tech, all of which are things lawyers have historically struggled with: Knowing what’s out there; understanding and benchmarking the capabilities vs the cost, and convincing the business that it is going to save time and money. Until GCs get to grips with these procurement-driven approaches to buying technology their successes in finding suitable platforms is likely to remain limited.

On behalf of all of World Services Group, I am delighted to welcome you to the third edition of our GC special reports, looking at the importance and impact of technology on the legal profession.

This issue of the report is indeed a timely one, as at no point in our professional lives has the profound effect of technology been more evident. Since the onset of the pandemic, private practice and in-house counsel alike have universally transitioned to new ways of working largely driven by technology, demonstrating on one hand the adaptability of the profession, while on the other, dispelling tired notions of lawyers as technological luddites.

As the legal leaders featured throughout the report illustrate, innovation – particularly as it pertains to technology – is apparent in every corner of the profession. Just as we saw in the first two editions, neither budget nor business size need to be obstacles to innovating, with much of the counsel-driven development originating from little more than an idea and an opportunity.

Yet as we celebrate the shared successes seen across the legal industry, we must remain cognizant that innovation is a journey on which we will never reach a final destination. And with evolution emerging from every corner, it would be all too easy to rest on our collective laurels instead of continuing to build on the progress made. So, while we look on at the innovators and their accomplishments detailed throughout the report, we should also consider what we can do to foster and facilitate the emergence of the next wave of visionaries, set to take the profession further still.

Here at World Services Group, we want to embody the change that we advocate for. As an organization, we have seen that investing in technology, talent and corporate sustainability best practices that foster social and economic development are essential elements for ongoing business success – all of which represent key commitments I have made for my tenure as Chairman in 2020-21. By taking a strategic approach to our proprietary digital platform, empowering emerging leaders across our network, as well as improving training and accessibility to technology for all our membership, World Services Group is committed to ensuring that we are properly prepared to capitalize on the growing wave of technological innovation, for the benefit of both our members and clients.

In closing, I’d like to thank all of those in the legal community who contributed their thoughts and insights as part of the research for this report. By sharing your own lived experiences along this journey, I have no doubt you will help to shape and inspire the coming generation of leaders and innovators, set to once again disrupt the idea of what it means to be a lawyer.

Ramon Moyano
Chairman
World Services Group

Partner
Beccar Varela

Legal tech is becoming big business in the Asia Pacific region, so much so that the Singapore Academy of Law (SAL) has opened a legal tech accelerator. But much of the industry’s focus remains on selling to law firms. For GCs and in-house legal teams, making sense of the myriad systems can be a daunting task.

It is no surprise then that GCs would like to see law firms doing more to help them make sense of the market. While more than half of respondents to our survey (62%) said their external firms were using technology to deliver legal services, under a quarter (23%) said their firms had offered to share information on how technology might benefit their legal team’s operations.

‘Law firms need to demonstrate the value to in-house teams of adopting technological solutions’, noted one respondent, a Hong Kong-based legal manager at an international consumer goods company. ‘Right now, I think the focus of law firms is using technology to improve their bottom line rather than creating value for clients.’

Another respondent, an Indonesia-based head of legal at a large insurance provider, added: ‘It would be great if the external firm could also offer the service of helping in-house teams find the right legal tech solution for their team. They are often far more aware of the trends and services being used in the market so this would really help us understand things.’

Given the clear client demand, it is surprising that law firms are not seeing the opportunity here. Then again, law firms themselves may have a lot to learn. Just 22% of respondents were satisfied with the technology being used by their external firms.

Law firms should take this dissatisfaction seriously – 94% of respondents said it was important for law firms to keep up with new technologies, while 59% said they had started assessing their firms’ use of technology as part of their formal panel review process.

The incentive for law firms is clear. While legal tech is often seen as a disintermediator, disruptor or challenger to the established order, it does not have to be treated as a zero-sum game. As Susan Cattell, senior legal operations manager at Australian financial services company AMP, notes: ‘Clients and law firms have to work together to ensure the right tech solutions have been put into place and that they benefit both parties.’