“Being digital is the currency”

October is a month I always look forward to. For many in India it’s the start of the festive season with Navaratri, Dussehra and finally ending with Diwali. For me, it is also the time for the annual Legal Geek conference that is held in London every year. The conference is a great platform to learn about new innovations that are shaping our industry and to meet and connect with like-minded individuals and firms who are determined to change the way legal service will be delivered. This year, the Algo Legal team attended the Legal Geek Conference 2019, that was held in Shoreditch, London. The conference saw over 2,000 delegates and over 100 speakers – my third conference and the biggest yet. What is clear is the real passion and energy that has gripped this industry. Having followed legal technology over the past 10 years, I can confidently say innovation has officially exploded - with an estimated $2.8bn invested in 2018 and 1,250 legal technology companies with a clear resolve in wanting to solve real-world legal problems. The growth in legal technology start-ups has accelerated after years of lagging behind other specialist technology in areas such as fintech and healthcare. Legal Geek’s own tracker shows 25 start-ups offering legal documents as a service, 11 that do document automation and 15 that provide a legal services marketplace. (See the Legal Geek Start up map in the Appendix) That said, I believe, this has now posed a new challenge the industry is facing. Law firms and in-house legal departments are faced with an overwhelming amount of choice and a lack of a clear starting point has prevented a wide-spread adoption of such tools. Further, adoption also requires a change in culture. Us lawyers are trained to be skeptical. Dr. Larry Richards who has been gathering data on the lawyer personality since the mid 80s calls out skepticism as the number one extreme outlier trait of lawyers and skepticism makes you risk averse. Implementing technology requires a nimble and an open mindset. But let that not dampen any enthusiasm. Change is happening. Over the past conferences I have attended, I can see a clear change in the discourse. Three years ago, people were curious, last year people believed and this year people accepted and were looking for answers on how to adopt. Any change has its hurdles. At this juncture, I am reminded a quote by Frederick Nietzsche “He who has a why can endure any how.’ At Algo we believe in the why. Regards, Sandeep Kapoor Founder and Managing Partner

Overall Trends This year The Legal Geek event has evolved from the yester years to a full blown, vibrant law-tech community of legal tech companies, law-firms, corporates and in-house lawyers innovating, collaborating and refining legal-tech solutions. Companies primarily represented Contract (maximum), Compliance, Deal and workflow Management, etc. The themes and major take-aways of this year’s conference are as follows: a) Rising interest of VC’s and PE’s in Legal Tech with more funding opportunities for legal tech start-ups

b) No innovation without collaboration - Collaboration and Digital Transformation in Legal Industry needs-.

Law firms and clients to collaborate on common themes to reduce cost

c) Client Focused Legal Services Delivery – use of Legal Design concepts to ensure better client experience and

legal advice/support delivery. Major law firms such as Freshfields and Eversheds are implementing legal

design principles to provide solutions/advice to their clients. Start-ups such as Juro, DWF Ventures are using

legal design thinking to assess client needs, engage, ideate and prototype to build technically viable

solutions while keeping the cost low.

d) Easy integration – Open API, tech-agnostic solutions that can integrate various features and that can speak

to each other, receive or share data, etc. is a standard requirement

e) Law is a data driven business – With more focus on data, digitization and digital legal transformation, data

security and cyber threat aspects are real. Lawyers need to be more data driven in their approach too,

starting from simple training on use of excel

f) Platfirms is the future and data fluency will be a legal skill requirement. An example was seen with Eagle

Labs, part of the Barclays incubation centre, that talked about ‘empathetic legal solutions’ that blended

highly skilled lawyering with tech platforms

g) A lot of innovation in contract management – Tools are moving from simple contract creation and

management to more NLP and AI support driven contracts. The focus is to bring in efficiency, minimize

review time, automated contract abstraction, and automate mundane process steps to expedite the

contract process.

Legal Geek conference 2019 was attended by over 2000 delegates

Key players covered

Several key players that continue to be part of Legal Geek included:

Thompson Reuters (TR) (recently acquired HighQ) focused on integration and providing end-to-end solutions

from legal project management to due diligence, contract management, timesheet and billing, etc. With TR

acquiring HighQ, the focus is more on integrating its current TR offerings with HighQ’s platform. TR also shared

the Legal Tech Startup Report of 2019 that documented the rise and maturity of the new companies that are

contributing so much to the digital transformation of the legal industry. Categorization of the startups across

various areas per their products/solutions.

LawGeex – Automated contract review based on organizations’ approved business policies, contract approval workflow and guided contract editing (company’s approved contract language, fall-back positions

Luminance that uses AI and machine learning techniques to conduct document reviews, clause approval, compliance tracking, diligence/integration with systems, aligning existing contracts with boilerplate clauses and flag non-standard clauses, escalate issues for immediate review etc. Use cases for Luminance include GDPR, Bribery, Brexit and other Regulatory Compliance, Due Diligence, Insurance, Contracts, etc. Per Emily Foge, CEO of Luminance, the system uses “ML-lite” to read and understand documents and presented case studies on implementation and value created through Luminance in Torsten (Bech Bruun) a Norwegian law firm and Rajah and Tann, Singapore law firm.

Kira systems – that automates key contract clause abstraction, review and analysis, due diligence, etc. for the lawyers. The UI/UX used by Kira/Luminance are very attractive and user friendly. Per Noah Waisberg of Kira systems said, “sophisticated businesses only understand 10% of their contracts because of which big opportunities are being missed. “Contract Capital” must be understood to create value and therefore, systems like Kira automate the contract abstraction/review and analysis of data to overcome the limited human review capability - both in terms of time and perceived Return on Investment.” ThoughtRiver – This is a remarkable platform that offers contract pre-screening, AI enabled automation to interpret key risk issues, exceptions and outliers, uses Natural Language Processing (NLP), machine learning and other techniques to extract the relevant meaning from the contracts enabling lawyers to focus on critical contractual risks instead of wasting time on mundane document review. Additionally, ThoughtRiver launched its contract review Microsoft plug-in, Lexible during LegalGeek that is very useful and provides review support with intelligent risk profiling, default and specific positions based on your own contract playbooks, clause replacement, edit, etc. As Tim Pullman- CEO of Thought River stated, “if you want clients to use your workflow – you must embrace existing and well used technologies. (“Don’t replace the familiar”).” Genie.AI – helps drafting contracts. With Genie, clauses are recommended using machine learning, and can be searched by sector, client and other smart filters, automatically redact sensitive information from contracts from GDPR respective, providing an automatic knowledge base for law firms. SuperDrafter can be installed in private cloud or on premise, and automatically anonymises client data before using it. Integrating legal communication via emails to actionable events, workflow, comment trails, notifications, email

security platform - Tessian

Certain start-ups that have evolved on innovative concepts include: Juro – the AI-enabled contract workflow platform offers contract creation, negotiation, e-signing and analytics tools with a stack of integrations, including Slack, Google Drive and Salesforce for document management, comment trail of negotiations etc.

EigenTech.com - automates the extraction of data from documents/contracts using natural language processing technology and classifies documents based on their content. This data can then be used for analysis, risk-assessment, etc. per the organization requirement. On-site/online deployment and integration to various systems. Other open source platforms that connect contracts to your existing tools so that you can automate business processes and contract management (Clause.io) Visual Contracts – Uses Legal Design Thinking principles to help review the contracts (Legal design thinking is the cross-discipline of Legal Thinking, Design Thinking, Visual Thinking and User Experience (UX) design) New Entrants that are filling the gaps in the legal tech environment and aroused interest were:

Autto – This is a legal flow automation platform. It uses analysis based on a Runner -Repeater-Stranger-Alien methodology. This model segments inputs of demand from customers and uses the different characteristics of those segments to develop optimal operational responses. This not only captures the workflow, but helps document generation, linkage to emails and track the flow per Max Cole, Founder of Autto.

iManage RAVN – a cutting-edge Artificial Intelligence platform that powers several applications to automatically organize, discover and summarize your documents. The iManage RAVN platform sets the pace of the market allowing all types of organizations to increase efficiency, increase productivity and mitigate risk. The system analyzes and extracts key data points from documents such as leases, loan portfolios, or M&A documents, allowing you to perform due diligence, financial statement reviews, and other necessary tasks with ease. Dealsign – is contracting and negotiation services platform that helps complete deal execution along with digital signature workflow. Libryo – is a compliance management system that includes custom legal registers, updates and notifications, compliance research repository, summaries of legalese into simple language, built-in translations, document storage, activity trackers, auto alerts and notifications, specialist support and integration with GRC, risk assessments and audit reports. Libryo claims to provide compliance support for 64 jurisdictions globally with dedicated support from regional lawyers. Other Companies showcasing their legal-tech products included:

Net Documents Claritis Orbital Witness Lexoo Clara Tessian

Summize Evident Proof Libryo DealSign Legatics Define

Eagle Labs Lexical Labs Crafty CounselVisual

Contracts

Extracts from some talks worth mentioning

Collaboration

1. Simon Davis - President of the Law Society

• If you behave like a robot, you will be replaced by one • Figure out how to get into the soul of your client and you will win the business • Digitise what is not core to a lawyer • ‘’An uncritical reliance on technology could lead to wrong decisions that threaten human rights and

undermine public trust in the justice system.” See: Algorithms in Criminal Justice System June 2019 – a nice report that highlights the threats that tech brings and what we need to do to mitigate them (https://www.lawsociety.org.uk/support-services/research-trends/algorithm-use-in-the-criminal-justice-system-report/)

2. Isabel Parker- Chief Legal Innovation Officer at Freshfields - Insights on Collaboration • No innovation is possible without collaboration. Law firms’ clients are expecting collaboration on

common themes to reduce cost. Don’t hide information if it’s not strategic. • To collaborate you must share a vision • Respect and nurture the ecosystem and it will pay you back

3. Thompson Reuters & High Q - Richard Punt – Chief Strategy Officer; Stuart Barr- Head of Product

Strategy- High Q. • TR wants to create opportunities for others • Need a seamless experience across the industry • Platforms must be open and interoperable and create an open network • The future is the Platform

Sources of innovation

1. Ben Chiriboga of NEXL, a firm that helps early stage legal technology companies grow by bringing them the best marketing and growth strategies. Another supporter of the “Collaboration” theme, he believes it takes an army to change the current legal landscape and we must all succeed, en masse. He claimed to have cracked the secret of how to orchestrate change in organizations. His “Secrets”: • Telling Great Stories as it triggers a chemical reaction in the body • Every story needs a Hero - and you have to depict the lawyer as the hero

2. Rob Wilmott Founder & CEO of Crowdicity, makes the software that ignites potential of innovation and

crowdsourcing of ideas (“open innovation”) can be harnessed through tools or simply by changing the mindset in an organization to listen and encourage new ideas. He believed that great ideas can be found anywhere in an organization and they need to be uncovered- and people need to be empowered to contribute.

Adaptability of Law Firms to Legal Tech

1. Peter Buck of Net Documents brought in the concept of Software Defined Law Firm. According to Peter, legal services is very fragmented and law firms can be successful only when they share their data. This is cloud-services era so don’t ignore it and try something different. In the future, data will need to be leveraged through APIs and law firms will see results based on data + intelligence. The software defined law firm will beat the hardware-centric alternative.

2. Founder & Managing Partner of Fisher Broyles, LLP discussed the first distributed law firm model that he has created. Their platform is based on compensation, people, location, and technology. They use smart contracts on a distributed network where all partners can see how everyone is billing, it’s automated and in the clear. Partners get 80 percent of all billable work for their clients. If you work with another partner, you receive 48 percent of the earnings. The cost savings comes from having no physical office space as every partner is geographically distributed as well. Their people join this internal compensation engine/program from some of the biggest firms in the world with the attraction of no commutes, no overhead, increased professional growth potential, and an extremely diverse partnership. Lastly, their technology is a mix of both cutting edge and traditional tools to help their clients. They call themselves as the ‘Law Firm of Future’.

Challenges to digital transformation

1. LegalTech is still expensive and doesn’t connect (Stephen Allen- Innovation and Digital). Per the Technology Products Margin Reports by Proband, a technology service provider in UK, the legal sector’s pay margin for IT is the highest compared to other industries due to lack of accountability by IT vendors, cost effectiveness of solutions, transparency of tech pricing and lack of tech expertise in-house. With legal ops positions moving into law firms and legal departments, new roles such as CIO tasked exclusively with managing and improving the firm’s technology, law firms can demand more cost efficiency in spend and technology and keep IT vendors and managed service providers (MSP) accountable for the services they provide and the rates they bill.

2. “Mind the Gap” between innovation, product and sale. Probe the commercial case before spending time and money (Slaughter & May – Program “Collaborate”). The firm highlighted that it is difficult to find the right tools for law firms. Often they don’t work or have to be adapted so there is real need to work with early stage tech to get the right tools. Tech providers need to be mindful that the legal buyer has to write the use case – so it must be obvious.

About Algo Legal Algo Legal is a technology driven full service law firm for investors and start-ups. Our team is comprised of practitioners with decades of extensive experience in handling sophisticated, high value transactions and providing practical commercial advice. Our team is dedicated to providing VC/PE investors and startups with top-notch legal services.

The team is comprised of new age lawyers, company secretaries, chartered accountants, management and human resource professionals. By ‘new age’ we mean professionals with an open mind to embrace, experiment, evolve with the new work environments. We tend to bring the best practices and strategies that will make our work space highly competitive, responsive, and challenging.

Interesting reads Legal Tech Startup Report of 2019 - Thompson Reuters report on Legal Tech startups. Algorithms in Criminal Justice System June 2019 – a nice report that highlights the threats that tech brings and what we need to do to mitigate them (https://www.lawsociety.org.uk/support-services/research-trends/algorithm-use-in-the-criminal-justice-system-report/) “Legal AI Efficacy Report” (need to pay for it) assesses what’s adding real value in the AI space.

What is next in the industry - Amazon’s foray into legal services – will this shake up the industry.

Technology Products Margin Reports by Proband, a technology service provider in UK on the legal sector’s pay margin for IT is the highest compared to other industries.

Interesting social media handles to follow

The Law Society (@TheLawSociety) | Twitter

Legal Design Lab (@LegalDesignLab) | Twitter

LIFTED by SAL (@LIFTED_SAL) | Twitter

Contact Us

Website: www.algolegal.in

Twitter: @algolegal_law

LinkedIn: https://www.linkedin.com/company/algolegal

The Algo Legal team at Legal Geek 2019

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