Postcards from Europe; Part 2: Germany and The Netherlands
December 05, 2019
I was keen to return to Germany after addressing The German Bar Association in May. This time it was a Hamburg Legal Tech Meet-up; a lecture at Bucerius, the top-ranked, forward-thinking German law school; and a ‘tea lecture’ to law firm managing partners and senior corporate counsel. Mother nature and British Airways derailed the plan. Two aborted landings in Hamburg, an emergency diversion to Brussels, and lost luggage landed me in the EU capital. Determined that ‘the show must go on’ I contacted my German sponsors who advised the weather there was so bad that train service had been suspended. I found a hotel room and suggested that the evening Hamburg speech could be delivered remotely. Things were back on track– even if I was dressed in a t- shirt, speaking from a hotel room on Skype. I related the nightmare flight, noting that it had passed over Hamburg twice that day and “Had it been a Lufthansa pilot, we would all be together right now.” The travel misadventure pivoted to a discussion of technology’s impact upon the legal industry.
Technology (IT) has become a vertical, permeating virtually all aspects of how people live and work. It has disrupted numerous industries from retail to ride hailing and has changed how we acquire information, communicate, and navigate. How could the legal industry delude itself into thinking technology—coupled with the impact of the global financial crisis and globalization—would not ultimately disrupt its outdated delivery and educational paradigms? IT is not replacing lawyers, but it has recast the tasks they perform; for whom they work; how they work—agilely and often as ‘gigs’ rather than in an office and as an employee. Not even lawyer hubris or self-regulation can stanch its impact on legal delivery. Technology is redefining what it means to be a lawyer and transforming law from a labor-intensive, service industry to a tech and process-enabled one. Technology is a seminal element in legal digitization, a process where automation, collaboration, process, constant improvement, and new delivery models are transforming delivery. Legal practice– differentiated legal expertise, judgment and skills—is now distinct from the business of delivering legal services–scalable, efficient, cost-effective solutions that deploy ‘the right resource—human and/or machine—for the right task.’ Law is not just about lawyers anymore–it is a three-legged stool supported by legal expertise, technology, and business acumen.
Technology has produced products, replacing labor-intensive services for many repetitive, low-value tasks– research, document management, etc. Companies like U.S.-based LegalZoom and France’s LegalStart have successfully deployed IT in law’s retail sector to provide accessible, affordable, and value-appropriate levels of legal service. This ranges from chat bots directing customers to the ‘right’ service or product; self-serve documents; subscription services offering customers limited access to lawyers to answer questions; and/or full-on attorney engagements. This spectrum of lawyer involvement is not only bringing more customers into the legal marketplace, but has also garnered high customer satisfaction ratings compared to the traditional ‘lawyer does everything’ model. The new paradigm of deploying IT and non-lawyer human resources for certain legal delivery functions is also increasingly evident in the corporate segment of the legal industry. Consider the remarkable recent migration of work from law firms to in-house legal departments and to (non-law firm) service providers. This is much more than price and labor arbitrage; corporate departments and service providers approach legal delivery as a business and adopt a business approach that distinguishes, then integrates practice from delivery. It is delivered from a corporate structure, and it rewards output–results–not input–hours billed. The medical profession—now the healthcare industry—is already decades into this metamorphosis.
Technology is not intrinsically relevant, user-friendly, or impactful to legal delivery. It is only as material as the challenge it is built to address; the ease with which it is used; and the impact of substituting machine for human labor. The creation and deployment of legal technology is a ‘team sport’ involving lawyers, technologists, process experts, and others. One without the other is unlikely to achieve success, and IT is subject to the same materiality criteria as evidence–not all of it is relevant. The smart phone’s smashing success is attributable to its multiplicity of useful and integrated functions, ease of use, ability to connect users with others, affordability, and ‘bang for the buck.’ The criteria for legal technology’s utility are no different.
A Raincheck for Bucerius and The Hamburg Bar
My Bucerius and tea lectures were rescheduled for later dates. I was especially looking forward to speaking at Bucerius, a remarkably progressive law school that has a curriculum that combines law, business, and technology. Markus Hartung, a friend, thought leader, and Director of the Bucerius Center on the Legal Profession (CLP) requested a lecture on Clearspire, a company I co-founded nearly a decade ago. It’s two-company model—a law firm and a bundled service provider that were separate for regulatory reasons but functionally integrated and operated under a unified brand—is relevant today and less ‘revolutionary’ than it was then. That will be the subject of a future extended article. So too will remarks to the German Bar be put off until the Spring–and a flight on Lufthansa.
The next stop was Amsterdam and its vibrant Dutch Legal Tech community. The “Tech Meet-Up” was held in the avant-garde offices of the Kennedy van der Laan law firm. Once situated in the heart of Amsterdam’s financial district, the firm moved its offices to Amsterdam’s burgeoning tech corridor. The move has more than symbolic significance; the firm recognizes the key role that technology now plays in legal delivery. The minute one enters Kennedy’s rehabbed warehouse offices, it’s evident this is not a traditional buttoned-down firm. The lobby looks like a large contemporary sculpture installation, and a photo mural on-loan from Nike, a firm client, extends the length of the first-floor. This is a visually powerful statement of a bold, modern, cutting-edge organization. The firm’s art collection and Silicon-valley start-up vibe reinforces that impression. It’s no wonder this firm embraces IT, has an Innovation team that is far more than lip service to the term, and is a catalyzing force behind Dutch Legal Tech—now Europe’s second largest behind the UK.
I was struck by many aspects of the large audience. Everyone in the crowd was asked to offer a brief personal introduction, and the breadth of professional experience was noteworthy. Such introductions are standard fare in Holland, a remarkably egalitarian, open, and direct society. The audience was eclectic– law students, general counsel, Bar representatives, law firm managing partners, technologists, academics, journalists, and a judge from Holland’s High Court. It was a remarkably diverse group—ethnically, generationally, and professionally. The Dutch have read the memo that legal delivery is not just about lawyers anymore and that innovation is driven by young and old and from many different professional perspectives.
My remarks began with a review of the events and reasons that have ignited change in the legal industry; the delta between traditional legal education and what the marketplace now demands; the access to justice crisis; new delivery models; the relationship between man and machine in legal delivery and the quest to identify the appropriate resource for the task; and the distinction between the ‘practice’ of law and the delivery of legal services. The Dutch corporate legal market is even more conservative than in the States and the UK, and law firms remain the dominant provider source. But that does not dampen the enthusiasm of the Dutch legal tech community that is eager to get in front of change that has already affected the buy/sell dynamic elsewhere. The audience was especially interested in the degrees of lawyer ‘touch’ and how technology is narrowing legal ‘practice’ and broadening the delivery of legal services. They see digitization–the interplay of IT, process, automation, data analytics, collaboration, and leveraging differentiated expertise–as a way to address access to justice and to improve corporate legal delivery.
The Dutch legal tech community is actively engaged with counterparts in Europe—notably the UK, Germany, and France, and has forged ties with the U.S. My primary takeaway is that the similar challenges confronting European–and global– legal markets far outweigh national legal, regulatory, and cultural differences. Technology, process, and a global view are tools for repairing the legal industry’s ‘wicked’ problems—the delta between what law schools teach and what the marketplace demands; access to justice; structural changes in the delivery of legal services; the new division of labor among lawyers, other professionals, paraprofessionals, and machines; and preservation of the rule of law and the defense of democracy. These are global legal challenges– not national or regional ones– that require participation and collaboration between and among legal communities everywhere.
The conservative legal buying practices in Germany and the Netherlands belie their remarkably vibrant, creative, and energetic tech communities. Unlike the States where consumers and a handful of service providers are legal delivery’s principal innovators, the Dutch and German tech communities are leading the charge in their markets. But whether change is driven by provider or consumer, it’s a global legal marketplace, and innovation must not be confined by geography, culture, regulation, or source of origin. The legal mosaic is confronting common challenges, and it will require a global village and a collaborative approach to meet them. Europe has several dynamic legal tech communities that are taking steps in that direction.
This article originally appeared in Mark’s Forbes column
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