Is your company in legal trouble? There’s an app for that
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
There have long been dedicated smartphone apps to order pizza, book flights and identify songs. But managing corporate strategy in a crisis is an entirely new function.
Devised by two partners at Australian law firm Clayton Utz, the Serious Accident, Fatality and Environmental Incident Response app was launched in April 2015. Known as “Safe” for short, it is designed to take users through the critical first 48 hours after an incident and minimise the risk of incorrect decisions being made under pressure. The information provided ranges from what needs to be reported after a workplace health and safety incident to what to include in an investigation into environmental contamination.
Claire Smith, a Sydney-based partner who specialises in environment and planning, and Shae McCartney, a Brisbane-based partner in workplace relations, came up with the idea for the app to give a degree of comfort to their clients at the moment when reputations can be destroyed or salvaged.
Safe can work without internet access or mobile reception, which is especially useful for many of Clayton Utz’s clients — such as miners and petroleum companies — which operate in remote locations around Australia. It is also being used by clients as far afield as Houston, Ulaanbaatar in Mongolia, and São Paulo.
“We wanted to try to give people something they could hold on to and calm them down,” Ms Smith says.
Safe followed Clayton Utz’s “Dawn Raid” app, which was thought up by colleagues in the firm’s commercial law and tax divisions. It provides a guide for clients in the event that regulators or investigators turn up at their doorstep with a search warrant.
“Often accidents and incidents happen at the weekend — at funny hours,” according to Ms Smith. “Equally, sometimes clients just want to check something, so I think having access to that helps.”
Safe has arrived at a time when Australia is hoping technological innovation will help the economy cope with a reversal of its commodities-led boom of recent years. Prime Minister Malcolm Turnbull in December called for an “ideas boom” as he earmarked A$1.1bn (£570m) to be spent over the next four years as part of the government’s National Innovation and Science Agenda.
While law firms’ adoption of new technologies coincides with that push, however, it is ultimately a response to competition in the domestic market. Over the past four years, several major Australian corporate law firms have merged or formed relationships with global rivals. That gives them better leverage and access to pooled resources. It has also stepped up the pressure on local peers to keep pace.
In this context, technology is no longer an optional luxury and firms are forced to consider how to differentiate themselves from rivals and serve clients better. “It’s a competitive market and we want to demonstrate why we’re top tier,” says Ms Smith. Even if technology reduces her firm’s billable hours, she adds, “we’ll be seen as the innovator or leader in that category”.
Firms by and large have already introduced technology such as customer relationship management and billing systems. Next, they are looking at how to automate the time-consuming administrative work carried out by junior lawyers, such as discovery or producing routine contracts.
“The use of technology in law firms was mostly about innovating around the law,” says Sam Nickless, the Sydney-based chief operating officer at Gilbert + Tobin. “It never got into doing the law. I think what has happened in the past few years is that innovation is now getting into the actual practice of law.”
Beyond that, the next area where technology could be used is to do with judgment. Through big data analytics and machine learning, a computer can look for patterns and make calculated decisions and recommendations on, for example, the probability of winning a case.
While allowing computers to make judgments is some way off, there are quick wins to be had around automation, such as having an IT programmer streamline rudimentary tasks. G+T has made an equity investment in a start-up law firm called LegalVision, which aims to provide cheap legal services for small and medium businesses.
The two companies staged a 24-hour legal “hackathon” for one of G+T’s clients — Westpac, the Australian bank. Programmers at LegalVision, working with G+T and Westpac’s lawyers, worked on finding solutions to technical problems that Westpac’s legal team faced. The hackathon was “non-hierarchical”, the firm says, mixing lawyers and technologists.
Among its outcomes was a self-service portal for legal help and an app for understanding delegated authorities. Coding went on overnight, giving instant results, rather than through a drawn-out process of commissioning.
It is not just the function but the location of technology that is changing. Corrs Chambers Westgarth shifted its legal technology, analytics and document review platforms to Amazon Web Services’ cloud platform in late 2015.
The entire process from investigation, development and testing to migration took around three years. It has provided Corrs with greater speed and capacity compared to the local cloud services provider it used previously.
“The reason it’s an advantage is the effect it has on its clients. You’re paying for computing power, not manpower, and that’s a lot cheaper,” says Michael do Rozario, lead lawyer in Corrs’ legal technology solutions department.
The firm says that one of its clients compared a Corrs estimate for document processing and storage with an industry-leading competitor’s and found Corrs’ was a 20th of the price.
The costs of these technologies are now lower than they were years ago and are likely to fall further as competition grows. That means smaller legal outfits also have the opportunity to generate the efficiencies the major corporate firms are striving to achieve. Newer firms may find their lack of legacy structures makes them nimbler and readier to adopt new technologies and systems.
But the downside of making things cheaper through technology is that it will displace jobs. A report from Deloitte this year estimated around 114,000 positions in the UK legal sector are at risk of being eliminated by 2020 because of technological advances. Yet the report concludes that highly skilled lawyers will be more likely to thrive.
Stephen Giles, a Melbourne-based corporate and commercial partner at Norton Rose Fulbright, has a similar opinion. He specialises in franchising, which is document-intensive and susceptible to multiple delays because of the number of times contracts must go back and forth, awaiting signatures from various parties.
Despite leading the development of a system that automates processes through electronic signatures and document management technologies, Mr Giles says he is busier now than ever before.
“The one variable with technology is that you can get process and intelligence, if you like, but you can’t have artificial experience,” he says.