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Automation in law – why we don’t tackle it and what enormous potential remains untapped

Digital transformation in the legal field can be successfully tackled. There is no ideal blueprint but a number of best practices guiding the way.

The application of legal rules is often standardized. Can it therefore also be automated? Many lawyers will answer: “Absolutely not! The law is far too complex for that”. In my opinion, a different legal guideline would be the right answer to this question, namely “it depends”. All too often, it is human factors, rather than the law itself, that stand in the way of automation.

One problem lies in the fact that most lawyers think they know exactly how to do things right, and therefore don’t need a computer to do things for them. Today’s law firms do not encourage innovation or automation. While automation may create added value for them, implementing it requires standardization and automation itself. Not only do individuals have to spend time on this, but the right structures are also needed to make this possible.

The widespread assumption that lawyers make no mistakes entails a belief that any technical solution can only be worse than its human counterpart. Especially in the field of document recognition, this phenomenon can often be observed. If a provider of a software with Deep Learning Function promises that the software would recognize 90% of the relevant documents, it is dismissed as unsuitable, since an associate could do this better. However, it is disregarded that the associate can become overtired or inattentive.

A certain degree of skepticism about technical innovation is necessary. But human capabilities should not be overestimated.

ROI and applications vary

Another problem lies in the overall structure of the law firms itself. In law firms, the lawyer who has the highest hourly account at the end of the month gets a bonus. In companies, on the other hand, the number of hours or cases is less important to their monthly earnings. Nevertheless, some in-house lawyers may be afraid that their job will be in jeopardy if some of their client’s questions are answered by machines. However, this perspective is shortsighted; if standardized tasks could be solved by machines, then the in-house counsel could address issues that are strategically and economically more important to the company.

Automation in the legal field is often worthwhile, but how to maximize its benefits depends on the specific area and focus of the topic. Two mistakes should always be avoided. The first trap is the lack of a cost-benefit analysis. Not every investment in technology makes economic sense. Before a project is started, a calculation should first be made of the costs and benefits of the project. Ideally, if a particular process is accelerated by automation and hours are freed up for a large number of employees as a result, the costs of implementing that automation will more than pay off. The second trap is focusing too much on the technology and losing sight of the people and processes it needs to serve. Technology alone is not the solution. A well-known triad in the legal tech community is “People – Processes – Technology”, and the order is no coincidence. Using technology should always be the last step. First and foremost, we need people who understand the technology and can work with it, and end users also need to understand it. Furthermore, it must fit the required processes. Many software products of the past failed because the intended technical processes did not fit reality and so the users ignored them.

Automation and law: Perfect match with challenges

Two examples highlight scenarios in which automation could offer added value:

In the first case, a new document is created from a technical template using a form consisting of several modules, or a possibly non-legal user is guided to a correct format template with the help of technical assistance. If a (complex) contract is to be created, this can be done more easily using an automated process. For the legal department this means less work, and for the sales department automation accelerates the process up to the conclusion of the contract.

The second case concerns the automation of guidelines. As these are often drafted by the legal departments, they are often very complex and confusing for laypersons. Interactive interfaces – available immediately for everyone within a company – can greatly speed up the process, which may have to be completed hundreds of times in the group, and make it possible to shed more light on individual points.

Automation and law are more closely related than one would think at first. In order to achieve added value, prejudices must be eliminated and necessary structures created. We are only at the beginning of recognizing the various application areas and improving and refining the existing solutions.

About the author

Nicolai Behr is a Partner with Baker McKenzie in Munich. He is a member of the Global Compliance and Investigations Steering Committee and co-heads the compliance practice in Germany. He is a member of the Global Innovation Committee of Baker McKenzie and co-heads the innovation and Legal Tech team for Baker McKenzie Germany/Austria. He co-chairs the committee “International Affairs” of the German Institute for Compliance (DICO). Nicolai is a regular speaker and author on compliance, white collar crime, innovation and Legal Tech topics.

This text is an excerpt from the article by Dr. Nicolai Behr, “Automationen im Recht – Warum wir es nicht angehen”, Rethinking Law (REL1300577), pp. 68 ‑ 71.