Digitisation climbs up legal agenda
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Since 1474, when Venice granted what is thought to be the first modern patent — for glass-blowing — intellectual property lawyers have been at the forefront of commercial innovation.
But, despite advising companies on how to safeguard their IP, patent law firms themselves lag behind in use of new technologies. Ryan O’Leary, a legal technology expert at research company IDC, estimates that two-thirds of law firms globally have yet to fully digitise their files and processes.
“The breakneck speed of innovation within commercial enterprise takes a while to trickle down to the law and lawyers,” says O’Leary. “Regulation is slowly reactive to technology and lawyers then react to that.”
Digitisation can create new lines of business, however. For example, law firms can use data analytics, artificial intelligence and automation to scan online marketplaces for counterfeit goods that infringe clients’ trademarks — doing in minutes what may take a patent attorney days.
IP law firms can also use software to analyse how clients’ patents can be relevant to the reporting of environmental, social and governance responsibilities.
“We want to provide not just legal services through lawyers but also technology with a legal foundation, generating new revenue streams and creating differentiation in the market,” says David Halliwell, partner at Pinsent Masons. His firm is partnering with start-ups to create technology for lawyers and clients.
The pandemic has accelerated digital change among law firms, as they have been forced to use video calls, cloud computing and collaboration software such as Slack and Teams to work remotely.
And digital technology will remain a top priority for IP law firms after the pandemic, according to Statista research commissioned by the Financial Times. Europe IP law firms and their clients named digitisation as the development that would influence the patent law industry most in coming years, according to the survey.
Although “some patent attorneys are afraid of being replaced by software tools”, according to Marco Richter, global head of product for IP solutions at LexisNexis, a data and analytics company, lawyers should see digitisation as an opportunity to “reinvent themselves with new service offerings”.
The first stage of change is digitisation, where law firms convert a paper file to digital, and clients are encouraged to communicate digitally, often through a secure portal.
The next step includes adopting workflow software to automate tasks, including reminders about patent deadlines. When a firm has a digital foundation, it can start using technologies including AI and data analytics to spot patterns in data, and gaps and opportunities in patent markets.
IP law firm Marks & Clerk digitised its data two years ago. Tom Farrand, the firm’s head of trademarks, says its workflow technology has helped it file a trademark application within a day of being notified by a client, compared with up to one week previously.
The workflow technology resulted in fewer staff hours spent on such tasks, Farrand says. “We [had] a lot of double and triple-checking. By digitising data, we don’t need to make those human checks any more.”
IP software can also augment human thinking. LexisNexis analytics software calculates a patent’s commercial potential based on data — including the number of citations a patent receives when examined by patent offices, and the size of the markets it protects.
Many law firms are encouraged by their clients to adopt new technologies, and find their clients appreciate the faster response times. Marks & Clerk’s lawyers have coped well with digital change, says Farrand, with some senior partners being provided with additional tech training.
Another challenge is finding software that can handle complex patent law, prompting some firms to create bespoke programs. Bardehle Pagenberg built a cloud-based IT system for its patent and client records, human resources and accounting. The German patent law firm employs nine computer scientists to write code, and has attorneys with computer science backgrounds to ensure the code incorporates relevant patent law.
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The project took three years and resulted in faster patent searches and better information sharing between lawyers and clients, the firm says.
An alternative approach is to partner with start-ups to create technology for lawyers and clients. Allen & Overy’s Fuse hub, for example, works with tech companies to develop and test legal, regulatory and deal-related tech for its lawyers and clients. It has produced “transaction management” software that automates the legal processes underpinning financial transactions.
Similarly, Pinsent Masons is working with tech companies including Solomonic, which creates litigation analytics. This technology analyses court judgments for trends and precedents, helping lawyers predict how a judge may rule on patent litigation.
“It’s valuable if you are attacking a patent, claiming it is invalid,” says Halliwell of Pinsent Masons. “You have the data on which arguments have succeeded with which judges and for what reasons. It can even highlight areas you might not have thought of. It does that lateral thinking for you.”