Legal-tech, which includes technological developments for traditional tasks performed by lawyers, has been gaining ground in the past few years. Various software programs streamline legal work and save on monotonous drudgery, which prevents wasting precious time and expensive resources.
The most advanced programs even formulate complex agreements of hundreds of pages and conduct 'due diligence.' This is achieved by using artificial intelligence (AI) prior to deals involving the examination of thousands of documents. Through technological development, it is possible to receive a better picture of a company at the press of a button. There are other software programs used to comply with the requirements of the Law Prohibiting Money Laundering and to conduct advanced reading of legal agreements, and there is even a program to examine how long a lawyer has spent working on each document, in order to streamline work and bill the client.
"Until two years ago all legal work was conducted by humans. Technology will significantly reduce the amount of drudgery. Lawyers helped by technological tools can now begin where they once ended. They don't need to be frightened that maybe they missed a line," said Adv. Lior Aviram, senior partner and head of the hi-tech and venture capital practice at Shibolet & Co.
Fischer (FBC) law firm has even decided to develop software for themselves to make work more efficient. They hired Adv. Alon Zinger, a software engineer who manages the firm's data and formerly served as VP R&D at data analysis company CB4, which was sold to Gap earlier this month. They have developed software for electronic documents discovery and analyzing agreements.
Adv. Maayan Snir, partner and HR manager at FBC said, "We checked and we saw that the existing programs on the market did not provide us with sufficiently accurate solutions for this and so we decided to develop it internally. This allows us to let lawyers focus on higher level legal work and less on technical matters. You have to remember that the legal world is fighting to keep its talent and the best lawyers, and from this point of view we want to help them."
How far is legal-tech expected to penetrate into law firms? On the one hand, firms have a reputation for being conservative and struggle to progress on everything regarding work methods. On the other hand, these are the firms that represent startups developing advanced technology and they are also interested in moving forward. Some of the firms already make use of advanced software and have even appointed a head of innovation, while other firms are still refraining from using software to replace the work of lawyers.
Adv. Inbal Baumer founded the startup LegalUp in 2017 and 100 law firms use the company's services. She said that the firms, "Very much want to bring in innovation and streamlining but it takes time because they are more conservative and less open to technology. Lawyers understand that the world is going there. In terms of applications things are a little bit more difficult."
Use of software for the traditional work of lawyers lets firms cut their work force. Adv. Yaniv Aronowich co-head of Tadmor Levy & Co. cross-border and domestic M&A group said, "There is no substitute for human material. Automation frees up lawyers for core work, and so it's important to invest in this. My added value as a lawyer is in doing the sophisticated things. You earn more from this than formulating a confidential agreement. You can take better quality human resources and invest it in more complex and profitable task for the firm."
Adv. Aviram points out that legal-tech means the ability to do the same amount of work with less lawyers - something that can help law firms cope with the lack of quality human resources, which has worsened since the Covid crisis. "The use of software began before Covid to make things more efficient but with Covid came a huge boom in high tech."
Adv. Aviram added, "On the one hand, the amount of work has risen by a double digit percentage ratio, while on the other hand the trend in which lawyers have moved to high-tech companies has become substantial. Legal-tech provides a solution from this point of view. The test of how many lawyers you have will become less relevant in the future. The question will be how much legal-tech there is alongside the lawyers."
He observed that technology also means that lawyers enjoy their work more. "And people today need more than ever to feel good at work. They feel that their work is at a higher level and that they have more time to think."
Can a machine replace lawyers? Erdinast, Ben Nathan, Toledano & Co. managing partner Doni Toledano pointed out that the process of legal-tech entering law firms will happen but not overnight. He added that legal-tech, "will never replace the lawyer. There are parts of the profession that cannot be replaced. A computer cannot conduct negotiations on a complex deal, as of today."
Adv. Zinger said, "I don't think that in the foreseeable future a machine can replace a lawyer on complex legal issues. The machine improves and streamlines the work and the quality. You receive higher quality work more quickly but it cannot replace the lawyer."
Pearl Cohen law firm director of compliance and internal education Adv. Tehila Druckman-Kremer said, "As a firm, where a large part of our clients come from the tech world, we cannot allow ourselves not to talk the language and we must also apply to ourselves an accepting approach to innovations and developments in the field. Nevertheless, the day is still a long way away, if ever, in which the core work of a lawyer will be done automatically."
Here are some of the legal jobs that legal-tech software is used for.
Due Diligence
One of the most prevalent software programs is for conducting due diligence. This involves a comprehensive investigation of the economic situation of a company and its commercial capabilities before a deal is closed with it, or as part of the preparations for a prospectus.
Shibolet & Co., which was one of the first law firms to install legal-tech systems back in 2018, and Tadmor Levy, use the Luminance AI system, developed in the UK for due diligence. Adv. Aronowich, who is responsible for innovation at Tadmor Levy, said, "In the past we needed to sit down 10 lawyers to pore over thousands of documents to conduct due diligence. Today the check is carried out efficiently by a software program."
Drafting contracts
Another advanced system used by Shibolet is called "Contract Express" developed by Thompson Reuters. The system produces the first draft of a contract, whether a simple contract or complex one. The documents that it produces are based on the contracts of the firm itself.
Erdinast Ben Nathan Toledano, together with Hamburger Evron, are making trial use of software that produces the initial contract. Toledano said, "Use of the program saves a lot of preliminary work and produces better quality work but it is still inevitable that people will be needed."
Adv. Baumer said that LegalUp, the startup that she founded, had developed options for automation of contracts that allows contracts to be drafted. This is according to the personal definitions and use of data that has been gained. Adv. Baumer explained that an investment agreement including over 100 pages takes several days for a lawyer to draft but the software program can produce it in just 20 minutes. According to her, among her clients are small law firms. "They feel that can give a fight to the big firms with this program, and provide more efficient service," she said.
FBC has even developed an AI-based software to help lawyers analyze documents - the software examines the document and proposes how to change the document according to the interests of the client. This is based on knowhow from previous documents."
However, despite the major savings in time, use of the software creates few documents for firms, among other things because it requires major work by the firm. Adv. Toledano points out that major work is required to define systems and catalogue questions by the lawyers.
Get to know the client
Another use for legal tech is the LegalUp software designed for the 'Get to know the client' form required under the Law for Prohibiting Money Laundering. The software allows the lawyer to send the client a link to a simple questionnaire. Use of LegalUp's software is the most widespread and many firms have installed it, including Tadmor Levy and Gornitzky (GKN), two of the largest law firms in Israel, which both make extensive use of legal-tech.
Statement of claim
Another program used by law firms including Gornitzky and Pearl Cohen is Cligal. This is software that allows light editing of statements of claim appendices and documents to be submitted to the court and it saves many hours of technical work.
Adv. Druckman-Kremer said, "I cannot imagine a statement of claims being written, even indirectly, by a computer, even if technically it is possible. We are talking about a complicated document that requires sensitivity, thought and nuance - and these are exactly the things that makes a litigator successful."
She added, "But at the global level, automatic tools save long hours of technical and tedious work and allow the lawyer to focus precisely on the heart of the legal work. Ultimately the question is whether the programs are economically worthwhile and these programs certainly are worthwhile."
Locating and scanning documents
FBC led by Adv. Zinger, has developed a program, according to the definitions of lawyers, that allows electronic discovery of documents. In the past there were printouts of documents but today these materials are contained in huge databanks in which information can be located and segmented. The program helps the litigator to locate the documents quickly.
Gornitzky & Co. (GKY) was a pioneer in its use as part of the conduct of a huge case in which the systems allowed smart search and sorting of the material. This includes use of AI for analyzing the results of the search.
Gornitzky & Co. firm manager and partner Adv. Adi Nahmias said, "In an important international case, use of the Ralativity system helped to quickly go through major quantities of documents and correspondence and to find the correspondence that served as the firm's main evidence in the case. The use of the system saved the client money and time and also substantially contributed to the success of the case."
Conducting proofreading
An additional use of legal-tech is for proofreading legal documents. Tadmor Levy uses the "Contract Express" software for high quality proofreading of legal documents.
"There is major savings in work and the document becomes close to perfect," said Adv. Aronowich of Tadmor Levy. "The chances of a machine making a mistake are smaller than that of a person. Therefore, it also saves in errors as well as human resources. What would take 5-10 hours is done today in 30 minutes."
Erdinast Ben-Nathan Toledano also uses the software that checks documents and finds mistakes and can even be added to the Word ruler.
Firms that don't use legal-tech software: "It's more hype and doesn't give added value
Adv. Aviram said, "The programs are expensive and installing them is expensive because we need to invest a lot of hours of work. Therefore, it does not immediately save us money, but prepares us for tomorrow, raises the quality to an optimal level, and in many cases speeds up the service."
Use of legal-tech also raises the question of how the client will be charged. Lawyers are required to bill clients according to the amount of work invested in the case but the various computer programs save hours of work. Adv. Aronowich said, "It's better to work efficiently and focus on quality human resources - less on the quantity and more on the quality. This is the future. Whoever does not adopt it will get left behind."
Adv. Aviram said that in the future the client will be billed according to the cost of the deal and not the number of hours work required."
Despite the many advantages of legal-tech, many law firms don't use the various programs because they do not consider it economically worthwhile. Adv. Alon Tabak, a partner and head of IT at the TMCL law firm said that, "The firm examined entering into automatic software, thinking to improve our procedures, for example producing automatic documents. But we did not see an advantage to working with the software. The ability of the programs is narrow and limited to specific areas and documents, for example confidential documents and consultancy documents. This demands somebody human to enter the questions and answers. All clients have their own sensitivities."
Adv. Tabak added, "Use of the programs is more hype and doesn't give added value. I do think that in the future it will be possible to make extensive use of the ability of AI in order for it to be efficient. It will be difficult to replace the experience of the lawyer."
Published by Globes, Israel business news - en.globes.co.il - on October 27, 2021.
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