The Unmissable White Paper: How to Ensure the Successful Digital Transition of your Legal Department

This article was a White Paper published in 2021, click here to find our latest white papers.

Transition to Digital: A Real Opportunity for Legal Departments

In an increasingly complex normative and legal environment, the needs and expectations of companies, and even more so of international groups, are changing. In order to manage their various subsidiaries; both locally and abroad, as well as to centralise and process their data, legal departments who wish to accelerate their performance should consider the benefits of going digital. From implementing the simplest software programs to deploying collaborative tools, these solutions can pave the way for greater efficiency but also require the implementation of new processes. DiliTrust, the leader in corporate governance solutions, has published a white paper in order to paint a clear picture of both the landscape of digital solutions and their potential management. It is a must-read clear-cut guide for all legal departments.

THE DIGITAL REVOLUTION FOR LEGAL DEPARTMENTS

The potential yield of digital transformations now occupies the majority of professional conversations within companies. Legal Departments are not immune to the force of this incoming digital wave, nor can they escape it. According to the 2018 Branch Mapping Legal survey, carried out by LEXqi Conseil in partnership with AFJE (Association Française des Juristes) and the Cercle Montesquieu, 76% of Legal Departments surveyed have already begun their transformation or have began to consider the possibilities of doing so. Today, it is difficult to envision that Legal Departments still lag considerably behind other departments in terms of digitalisation.

The transition to digital is a worthwhile challenge for Legal Departments. Ultimately, it needs both clear direction and demand so that each legal professional can seemlessly adapt to an overhauled working environment. This involves a complete redesign of processes, reconfiguring internal and external relations and services, along with re-examining  how these processes were formulated. These systemic changes will encourage legal services to rethink their business outputs, including their business value and the role technology plays in aiding this.

The challenge and the objective of any digital transition is to increase the added value for your internal customers while also increasing value for your company. This white paper will also detail how the transition to a digitized Legal Department is the transformation of a department under pressure involving (processes, internal customers, deliverables, growth standards, laws and regulations),to a department focused on core business matters: legal expertise and contribution to value creation.

Legal directors themselves must negotiate this transformation while the while the regulatory and normative context of the legal system becomes more complex. In the last 12 months, Legal Departments have had to implement simultaneously laws to fight against corruption (Sapin II), the duty of vigilance and the protection of personal data.

In addition to their daily tasks, thanks to the rapid evolution of compliance regulation, particularly since the 2008 financial crash, the Legal Department is now constantly called on by each other department within the company. Whether this is for contracts, compliance queries, international development needs, consulting needs or confidentiality agreements. Legal Departments are under strain. These constant information exchanges fueled by cumbersome Excel files and a ping-pong back and forth of emails highlights a growing backlog and professional strain for legal professionals’.

75% of Legal Executives have initiated a digital transition project that involves lawyers incorporating one or more advanced digital technologies.

78% of Legal Directors plan to continue their current digitisation process or will begin one by 2020.

The Legal Department: An Untapped  Potentiel hub of Business Activity

Legal Departments are gradually transitioning into a central axis of company activity. Over the course of time, Legal Executives have transitioned from filling the role of an expert practitioner to that of a consultant or business partner directly linked to executive management. They carry with them core business sensibilities and legal knowledge processes that will aid the transformation of the enterprise.

However, despite the benefits of digitization, Legal Directors are concerned about the issues arising from adopting new technologies. A 2017 study by Eight Advisory found that the challenges of the right to information retention and the risks associated with cyber attacks and fraud  are significant concerns for more than 50 per cent of Legal Directors.

While these concerns  are legitimate, they can be soothed by the use of secure technologies from reputable vendors. Credentials for selecting technology vendors should include service providers who meet international security standards, for example,  the ISO 27001 certification. It is also apparant from the apprehensions of Legal Executives, that there is still in existance the  remnants of an archaic legal culture that is reliant on the use of paper for each and every task. What is more pressing for Legal Executives, is that their legal teams are increasingly diverse and global in their make-up. This means that companies are now obliged to various local legislations.

To support these changes, Legal Departments must adapt to move towards greater agility and productivity. In this framework, digital is beyond the current injunction, the best asset for Legal Departments to become a central axis within organizations. It also, crucially lends organizations greater visibility.

Objective: Save Time to Concentrate More On Core Business Objectives

The issue of visibility is crucial to manage Legal Departments, at least according to the most recent study conducted by PWC in their annual 2018 Law Firm review, which looked at the priorities of legal functions. According to the survey, the visibility of their activities was the second issue for respondents, both in terms of large companies, as well as Midcaps and SMEs. Following this, performance and risk management were notable key issue for lawyers.

« Your opinion of the current digital maturity of your Legal Department »

A recent PWC law firms survey found that 50% of Legal Departments have weak digital processes in place. Yet, the opportunities afforded by digitalisation are numerous; to regain control over time management, allocate resources and tasks more efficiently and ultimately improve compliance within the regulatory environment. These benefits can be realised by going paperless and supporting collaboration through platforms and other tools designed to streamline workflows.

Digital platforms which support collaborative and workflow solutions are widely lauded by Legal Departments for their transformative qualities. Secondly, these solutions also optimise monotonous low-value tasks, for example, writing multiple NDAs (Non-Disclosure Agreements), contracts or Terms & Conditions and Terms of Sales for multiple products and websites.

The advent of cloud-based technologies driven by rapid growth and developments, including artificial intelligence, has given birth to a plethora of new software providers dubbed ‘Lawtechs’ or ‘Legal Techs’. While many legal professionals are against digitisation, the rise of Legaltechs undermines these beliefs.

Since 2013, nearly 1000 start-ups dedicated to the legal sector and system have been created all over the world. According to Alloweb, France alone lists 141 legal startups.   The future for the sector is looking bright, as Forbes charted global investment in 2018 peaked at $1663m, up from $233m in 2017. While this global growth of 713% is positive. the number of Legal Tech start-ups are significantly below those in sectors such as finance. Research outlines that thes sector has around 1,500 start-ups and over 30 billion in financing to date. In other industries, healthcare start-ups like Med-Techs and Bio-Techs enjoy strong growth while in marketing the rise of marketing related softwares continues to enjoy strong growth with €12.8 million raised in funds in 2017 compared to €9.4 million in 2016.

The activities of these companies are divided into three main segments:

• Sharing between stakeholders
• Production of documentation/contracts
• Decision support

Legal Techs: Innovation for Improved Business Performance

 A brief history of Legal Techs

To summarize, legal start-ups have come into being for three reasons.

In 2013, the first wave of Legal Techs focused on document storage, invoicing, and accounting. These technologies were developed in mind to facilitate the work of lawyers without encroaching on core legal business. The second wave of Legal Techs aimed to connect lawyers with potential clients. This mediation tech model was not a groundbreaking force of innovation but rather had been in use since the early days of the web. At this point, some start-ups entered the legal scene, focusing on small businesses and of relieving them of administrative and accounting tasks. These activities were looked upon favorably by many entrepreneurs and legal professionals alike as start-ups bloomed. Research confirms these entrepreneurial trends as a study by Maddyness and Legal News found that 70% of LegalTech’s focus on the creation of deeds, business creation and management or consumer protection as well as connecting clients to professionals.

However with the acceleration of technology, the third wave of Legal Techs have strove even further, with many offering the latest technical advances to facilitate daily business. This is done either by automating repetitive tasks or by providing decision support through machine learning based on data mining or extraction.

Automation and Decision-Making

According to the Law Firm, Day One, 27% of tasks performed by a lawyer and 37% of those performed by paralegals, can be automated. It comes as no surprise that most new Legal Techs, veer towards automation. Evidence suggests that 37% of legal start ups are likely to offer this service, with, half of these companies focusing their efforts on automatic contract software and legal activities. These start-ups have pivoted their business thinking towards contract writing, meaning that today it takes on a new dimension. The standard objective professional model is further enriched by being assisted by a robot. The promise of such technology is essentially saving time, something that has a magnetic draw for legal professionals. What previously needed 2 days now can be done in less than 30 minutes.

Within the decision-making sector of law, despite arguments to the contradictory, it is clear that today we are a long way from the use of ‘predictive justice’ technology. Yet. technology is on course to aid decision making based on statistical analysis or processing automatic language (NLP: natural language processing). Within this context, some technologies can analyze 1 million cases in one single second to obtain relevant information from this data on a statistical basis and semantics. It is difficult to consider a lawyer being able to do so, faster.

According to a study carried out by Maddyness, less than 7% of artificial intelligence (AI) technologies and even less, of carrier intelligence technologies, could eventually replace legal professionals. This is even more pertinent as in addition to lawyers and companies, the priority target of Legal Techs, are the legal services of companies and communities.

Compliance and Dematerialization

Unlike other sectors, disintermediation or uberisation are not the primary targets of Legal Techs. While deed writing is the most popular activity of legal start-ups, the second most popular activity focuses on legal information and its exploitation. Law is a field which is prolific in its production of written text. Search engines which contain assisted (or not) analysis by machine learning are probably the important areas which are covered by nascent start-ups within the legal sector. Within this landscape, other stakeholders have emerged with ambitions to streamline the processes of Legal Departments. Undoubtedly, this start-up model will have the greatest impact within businesses. Why? This is in part due to the alternating and transformative re-organization of legal management which is achieved and optimized by dematerialization.

Legal Departments can now consolidate everything related to processing, for example, the management of subsidiaries and equity interests, end-to-end contract processing and other elements of fully integrated document production on a single platform. Where previously the design and writing process of a contract took place via multiple email exchanges, now everything can be processed easily via one platform with integrated document access management, information consolidation and version control. Thanks to this technology, in an instant all documents can be provided to a board of directors via a tablet where delegations of authority can be centralized easily to increase enterprise efficiency.

The objectives of LawTechs or Legal Techs are not to replace legal professionals and resolve all legal problems but rather to provide a solution for specific needs, with the help of the law. Unlike the unrealistic stories being touted in the legal press, technological tools and solutions have eased the number of repetitive tasks, by fluidizing processes and workflows, while supporting the efficient resolution of problems or questions.  Overall, these tools help to create a solid foundation to support the digital transformation of Legal Departments while allowing them to focus on their core business.

With the advent of the cloud and rapid technological progress, many start-ups and Legal Techs are focusing on law and finance. Software which allows enterprises to demate- rialise and automate their activities are also actively being developed. After intermediation software, drafting and decision-making assis- tance solutions are the most popular on the market. These Legal Techs provide valuable solutions to allow busy legal professionals to save time. They are a credible asset to those negotiating their own digital transition.

Best Practices for Ensuring a Successful Digital Transition in Your Legal Department

Undergoing a digital transformation in your Legal Department involves several issues. This can affect overall efficiency when tasks are reorganized. Businesses must both align and seek opportunities to optimize their productivity and to also allocate evenly the resources offered by digital tools. The other big challenge of this transformation entails increasing the influence of the Legal Department and bring ing its sphere of influence closer to executive management within the company. To date, according to Legal Department overviews, 34% of Legal Directors are absent from any management committees. This is a critical omission, when considering how vital the department is for the healthy functioning of the company.

While 78% of companies have undertaken to achieve their digital transformation by 2020, 75% of Legal Departments have begun their own transformation by implementing a DMS (Document Management System) or electronic signature tools. While it is a steady start, limiting this digital transformation to the use of only these simple tools is not enough. What is needed is a solution which will aid organizational problems. Negotiating a digital transformation within the department involves negotiating also profound cultural changes in working, relationships within the team and with clients.

Your Digital Transformation: A Journey, Not
an Odyssey

 

The journey towards transformation always begins with  questioning the service provided to clients, internal or external, or in other words, the value of legal service.

‘‘Perhaps the greatest challenge is to rethink the operating model of the Legal Department. ‘‘

The first phase of any digital transition consists of identifying the grievances of each stakeholder, including customers and employees. The simplest solution to do so, is to host a focus group to allow everyone to clearly express their expectations and discuss the obstacles ahead. Doing so requires time to allow for a variety of voices and leaders to contribute to the debate. During this focus group, particular attention must be paid to how information flows are managed, processes and the management of tasks. It is also necessary to consider the habits of employees and their needs. Overall, it is necessary to reflect about the possible outsourcing of certain tasks to other internal departments to complete tasks faster and to enhance employee autonomy. This approach may inspire Legal Departments to delegate and off-load some of their tasks to other in-house teams so that they can focus more on value creation. This outsourcing can also be carried out with service providers for certain tasks that concern legal management. This focus group will need to sketch and re-shape the processes already at play.

According to a study conducted by Day One, there are 9 processes likely to be impacted by digital technology:

• Legal invoices
• Electronic document management
• Company Tracking
• Company monitoring
• Project Management
• Litigation and pre-litigation
• Intellectual Property
• Contract management
• Knowledge sharing
• Compliance

Depending on the case, workshops related to digital transformation will allow Legal Departments to review each of their existing management processes and the methods used (or lack thereof) to carry them out. During this phase, several points must be carefully considered. Firstly, Legal Departments should move away from focusing on their usual processes and instead try to find a technology that emulates these activities. The objective of this task is to streamline daily practices that are counterproductive and have been in operation for a long period. It is probably the most difficult phase of the transformation.

The second point involves internal organization. In order to rethink certain practices, to smooth and streamline activities, the organization of internal and external resources needs to be rethought. This phase involves detecting organizational failures related to the allocation of resources and the workload of each employee. Typically, it is not uncommon for internal departments to use the same resource to deal with a subject that could be broken down differently. Undergoing digital transformation is an opportunity to overcome this. For example, if the creation of a contract follows a clear workflow, its processing and final validation will be handled by an available lawyer. To facilitate this, a manager will rely on a shared calendar and workload plan for each lawyer which is broken down by collaborative software.

A crucial step of the transformation begins with questioning the production process.

DiliTrust interviewed Filippo Galluccio, Legal Manager -Corporate, Contracting and Compliance of Vodafone Italia, a subsidiary of Vodafone Group Plc, a major British telecommunications group and Timothée Garnier, Director of Legal affairs at Mitel France, a subsidiary of the leading global corporate Canadian communications group. They both shared their feedback on developments within their profession and the ensuing challenges they face amid increasing digitization.

The following is an excerpt from an interview with Filippo Galluccio, Legal Manager- Corporate, Contracting and Compliance at Vodafone Italia. He explains “how the digital transformation is not so much the adoption of technologies as it is the adoption of new technologies, the evolution of the company’s culture, processes and the functioning of the organization ”.

What are the key challenges facing Legal Departments in the next 3 years?

The biggest challenge is undoubtedly to rethink the operational model of legal management. In this sense, the parts of the organization dedicated to support services are being organized according to” agile” models, based on squads – that are small autonomous cross-functional organizational units of 10-15 people operating according to scrum methodologies, with cycles of very rapid release of new customer experiences, new products/services or new features of existing products/services. Compared to a traditional model, in the “agile” model the number of internal customers are multiplied – and therefore so are the requests for assistance. As there is not fully prior visibility of the requirements of the products/services under development, it is therefore necessary that in-house lawyers have a 360° experience of legal issues. This helps to better support the business and means that Legal Departments are able to provide assistance in real time, while development takes shape within the squad.

What digital solutions do you believe are necessary for Legal Departments to meet these challenges?

The In Vodafone, for example, we are developing new service and interaction models that allow the internal customer to   to act as autonomously as possible, especially for high-volume and medium / low-risk legal support needs. This is done through training “aids”, for example, videos and  infographics that allow staff to easily transmit the answers for the management of legal risk to their colleagues in their areas of activity; we also use digital tools such as software for the creation and management of contracts, starting from predefined standards, collaborative platforms, chatbots and – we hope in the near future – artificial intelligence (AI) solutions are able to support lawyers in the recovery and analysis of vast amounts of data. The number of start-ups offering innovative digital services in support of lawyers increases rapidly day by day and so it can feel overwhelming. Within the legal wing of the Vodafone Group an observatory was created and a “Legal Digital Think Tank” conceived to monitor the evolution of technology and the opportunities for the digital transformation of legal support processes.

The number of start-ups offering innovative digital services in support of lawyers increases rapidly day by day and so it can feel overwhelming. Within the legal wing of the Vodafone Group an observatory was created, and a “Legal Digital Think Tank” was conceived to monitor the evolution of technology and the opportunities for the digital transformation of legal support processes.

The Legal Director of Mitel in France, Timothéé Garnier below details his roadmap and juggling constraints within the industry in his experience. The Canadian group Mitel deliver all-in-one communication solutions for enterprises of all sizes. Present worldwide, the company need to  continuously consider at all times local and global regulations for each subsidiary.

What is your main challenge in the next few years?

Essentially it is the allocation of resources to cover all territories where the company has a presence. Mitel does not have a legal specialist per country. To give an example, France, Belgium and Germany have different regulations and we do not have a domestic legal representative in the latter two countries. However, it is necessary to constantly ensure that these different entities comply with the applicable rules. The other challenge ahead is that of the customer’s experience. To contact us, different departments of the company still do so via email or phone calls. The main issues are resource allocation and staff availability as they work on several files at the same time. From the point of view of external staff, they cannot see how time is spent on tasks within the Legal Department and for staff within the department, they cannot always see what is being done by other members of the team.

However, owing to the nature of our business, we use many tools to facilitate exchanges, share documents, communicate in real-time and assign tasks. Furthermore, we also use a software platform which facilitates collaboration for internal staff and legal team members alike. This is a necessity to allow for the clearer allocation of legal resources, without risk of loss or overlap. Thanks to this optimized allocation of tasks which saves time, everyone is aware of which cases are being processed and who is handling them. In addition to this extra control, internal clients are given the ability to view the history of this request, a kind of SLA or Service Level Agreement. It also means that we can work in a more informal and contextual way online. This solution will undoubtedly change the perception of how a legal team works. On the other hand, I am very skeptical about the other tools proposed by ‘legaltechs’ which focus on predictive justice or support decisions making. After evaluating many of these, most of these solutions are immature. I feel that to meet current challenges, collaborative platforms are the best way forward, using of course, the most relevant tools. 

The perception of your work is changing from the adoption of these new processes and tools. But one can argue that so too is that of the entire Legal Department and your own role?

Absolutely. Every day more and more, we simultaneously must take into consideration multiple regulations, due to how international structure of the company.  However, coherence between the difference local laws in not always evident and the overall situation can be made even more complex. As a result of regulatory inflation, particularly that related to technological changes, the Legal Department is responsible for supporting internal clients as far in advance as possible, to consolidate their position as a business partner. In fact, compliance with all regulation (compliance is such an important consideration) is an important issue and the head of the Legal Department must now guide the company at a more strategic level to identify and control risk.

Keeping the Information Systems Department in in the Loop

While transitioning to a digital Legal Department, the Legal Director is responsible for both contracting with Legal Techs to identify existing and proposed tools, and for exchanging with the IT department (Information Systems Department) to assess the technical possibilities and the potential impact on the company’s information system.

In most cases, potential technology solutions will incorporate the SaaS model (software as a service) Technically, this kind of software is most often located on remote servers and payment is made on a pay-per-use basis. This model allows Legal Techs to offer their solutions to SME’s and large companies and allows them to avoid heavy deployments on their side. The key role of the ISD Department is to ensure security during information transfers, but also to verify that the host provider can guarantee secure data and archiving storage. Most operators are ISO 27001 certified, which is an important factor in reassuring CIOs about security provisions. 

The ISD is a key function to exchange information with evaluated service providers. Legal Departments in most cases (regarding sectoral and internal specificities), will often request information specific to the service provider in order to follow closely processes and organizational targets. To realize this project, it is best to structure the project as being led by both an IT project manager and a lawyer, to achieve the best outcome.

Accompanying Change: The Key to Success

Once workshops have been completed and processes have been revisited from top to bottom, and tools have been developed and deployed, it is necessary to move onto the next phase. Negotiating the transformation also involves supporting teams and employees during this transition. A top-down and imposed transformation is doomed for failure for many reasons: a lack of shared vision, a lack of knowledge about the tools deployed, the reluctance of internal staff, etc. This list can be long. However, on the other hand, successful processes often involve similar ingredients. Firstly, these can involve teams from the reflection phase and then in the validation of all steps throughout the process.

In addition to these steps, there is an essential training plan. Methods can be far ranging. They involve:

• The communication and information systems department communicating clearly with operational staff.
• One training session is carried out per organizational function.
• The communication of videos to detail how each digital tool functions.
• Recurring updates to familiarize teams with tools and processes.
• Mock role-playing games.

Whatever the chosen method, the information and training phase is essential to both inform employees of the company of the new terms and conditions of the collaboration with(in) the department, to explain the reasoning fully behind it. Employee support is also essential. This phase may seem obvious, but it is often overlooked in many companies.

The Business Benefits of Digitization

Throughout this chapter, it is evident that digitization provides clear business benefits. The most obvious of these is productivity gain. As in other sectors, the digitization of legal activities, allows for more control along with a significant increase of succinct and necessary reports. These indicators can better aid the workload of lawyers, for example, the number of contracts processed, the evaluation of lawyers, requests for business lines, the average time for contracts to be draw up, etc.

Equipped with these indicators, Legal Departments therefore become better able to manage the time and energy spent per task with the ultimate advantage being that the Legal Department is less congested. Also, this digital transformation is also an opportunity to participate

more fully within the company’s CSR Corporate strategy or to clearly demonstrate a return on investment.

It is evident, that the benefits are numerous, ranging from time saving, to increased productivity, better data protection and more traceability. Beyond these metrics, the main benefit is undoubtedly an improvement in management’s perception of the company’s in-house legal services, which is boosted by these technologies. The latter allows legal professionals to better focus on their skills without being overwhelmed and flooded by administrative tasks.

From this image change, the Legal Department is repositioning its core services which was the implicit objective of its digital transformation.

9 key points to achieve your digital transformation

1. Organize an exchange workshop around processes and expected functionalities

• Establish governance of the project.
• Make a list of management’s legal functions.
• Identify weak spots.
• Express needs.
• Brainstorm and pinpoint ideas to optimize performance.
• Determine project objectives.
• Determine the budget.

2. Involve internal staff and the IT department during the process

• Involve and inform ISD about the aims of the project.
• Consider data security.
• Survey the expectations of other sectors of the Legal Department.

3. Documentation

• Consider different areas: Company law, Authorizations and Delegations, Contracts, Litigation, Real Estate, Intellectual Property.
• List precisely your needs and the features that you wish to have.
• Ask yourself practical questions: Is email the right tool for you?  Could something else be more relevant for exchanging information? Is it necessary to print all documents for your Board of Directors or instead go paperless? Should metadata be processed? What workflows are already implemented to optimize processes?
• Identify automated processes and areas that can be dematerialized, for example, contracts.

4. Identify and Prioritise Tasks

• What tasks can be delegated to internal staff? By automating certain tasks, employees can work more autonomously on certain documents.
• Which tasks can be outsourced to legal services externally?

5. Evaluate Market Solutions

• Define what you need, and overview offers in the market. Ensure that your IT team can evaluate the technical limitations of the solution.
• Take into account both the functional and technical issues with this solution
• Select tools that will facilitate your needs and avoid solutions that will be costly and rigid.
• The IT department must evaluate the security constraints of the solution. If a SaaS tool is installed, they must review cloud storage and potential security issues. It is pivotal to understand their security standards.

6. Have lawyers create budgets, in case of specific redevelopments and test the software to verify

• In case of specific developments, legal professionals should test the software to verify that it corresponds to their needs.

7. Implement Key Performance Indicators (KPIs) according to your objectives

• Some examples include; number of contracts/litigations assigned per lawyer; the average length of time for projects for each lawyer, the average resolution time of a dispute, auditor fee ratios & lawyer costs for M & A operations.
• Valuation of the work done by the Legal Department.

8. Support Change

• Via training plans: quizzes, videos, in-service training, on-site, support for the use of software.
• With a strong communication plan.

9. Conduct regular reviews

• A review should be conducted one month after an initial trial period.
• Verify that the solution implemented responds to the expectations and objectives.
• Check that processes are respected.
• Verify that key performance indicators are being monitored.
• Implement readjustment actions if necessary.

Beginning the process of your digital transition by following the afore mentioned steps is a positive start. However, the right solutions must be chosen to ensure the management and the optimization of the production of the Legal Department. To date, according to a study conducted by PWC, the digital maturity of Legal Departments is very incongruous. While business solutions are useful, within the law, contracts and litigation software are more pragmatic. Dematerialization is a pressing priority for Legal Departments followed by collaboration and improved compliance with a regulatory environment. A well-managed dematerialization of old work processes along with the implementation of a collaborative platform frees up more time to focus more on the regulatory environment. Once this trilogy of needs has been identified, what are the next steps?

Firstly, it is a good idea to speak further with your IT Department to evaluate the use of already available internal platforms. For example, it is not uncommon for companies to have an internal communication platform which allows for collaboration and knowledge sharing. In a recent PwC study, it was cited that ‘Legal Departments do not necessarily use digital tools to their full potential’. These include EDM (electronic document management). The study notes that Legal Departments “still ignore the opportunities afforded by such tools, especially in terms of the processing of legal data.’ In fact, in return for adjustments these tools can be a first step to a better foundation to build a collaborative platform, which has a defined and specific workflow for Legal Departments. However, this approach requires a significant investment in terms of project management and monitoring. The IT Department must also be motivated to develop its IT system further to incorporate these solutions.

With time, the Legal Tech ecosystem offers a relatively comprehensive set of tools to address needs related to the digital transformation of

Legal Departments, for example, search engines, online arbitration, document production. It allows Legal Departments to become more productive and efficient every day.

In addition, many of these tools are offered in SaaS mode with technical, financial and user flexibility, induced by access to the program via a remote server. Another advantage is that many companies use an uninteresting model. The software’s learning curve is carried out both by the uses observed and the specific requests of the Legal Department. But prior to this, again, the evaluation of the processes offered by these platforms need to take place. Solution providers like DiliTrust, have been in business, serving a multitude of clients with these issues and have honed their solutions through direct client feedback.

The Process of Dematerialization

For digital transitions to truly be effective, the process of dematerializing involves one key step. Going paperless.  What Legal Departments need to know is that when faced with a daily avalanche of paper, increasing budgetary and storage issues, going paperless is inevitable. Evidence suggests that 40% of a lawyer’s time is dedicated to time-consuming, recurring tasks without added value that are carried out on paper.

To give further context to this white paper, the definition of dematerialization according to the FNTC (National Federation of Trusted Third Parties) is as follows, ‘dematerialization consists of the transformation of a document or a paper document flow, as well as the processing applied to it, in terms of documents, flows and digital processing. To achieve this objective, dematerialization seeks to preserve in electronics a legal value equivalent to paper documents, whatever their medium and means of transmission, as well as their archiving procedures.’

As noted from this definition, dematerializing presents many advantages, beginning with digital trade facilitation, both internally and externally while also avoiding continuous back and forth between stakeholders. In the framework of digital transformation, dematerialization also is best promoting its benefits to external departments.

Often, the initial dematerialization process will be established by EDM software (electronic document management). In its most recent simple form, this type of software is a mixture between a database with a search engine and the ability to ‘capture document function’, collaboration and integration.

Choosing an EDM software for documentation (or other purposes is essential), when sourcing a software supplier. To further guide you in selecting what type of software will benefit your needs better, the first step is to exchange with the Chief Security Information Officer, to validate whether there is another EDM platform currently in use by the company.  In addition, the integration of the chosen software with the existing computer hardware and business tools (including messaging and email software accounting) should also be considered. From a legal point of view, it is necessary to also check the security of the storage of documents and the location of data centres in the case of companies employing SaaS solutions. Data centres should also benefit from ISO 27001 certification to offer a level of sufficient security.

Collaboration and Workflow

In line with EDM, within Legal Departments, the most important software in use could be the solution  which facilitates collaboration and workflows across the board. This tool that allows users to share documents, keep separate versions of documents, ensure files are followed up with, ensure inter-departmental employee exchanges and allow users to collaborate in real time is extremely important. For Legal Departments keen to get on board with these tools, a mock ‘dry run’ of this software is encouraged to test for document security during exchanges and storage.

Depending on these tools, some may be more customizable for users to maximize their benefits. Security is also another critical issue for collaboration.  For example, the use of third-party applications such as Dropbox, Slack, Trello or Google Drive can be an asset – or a nightmare for the CISO (Chief Information Systems Security Officer) or the DPO (Data Protection Officer).

In this category of tools, there are DiliTrust solutions, including:

• DiliTrust Governance, a collaborative legal platform to streamline, centralize and organize all legal activities in Legal Departments.
• Board Portal, an intuitive and user-friendly solution for the digitization of board and executive committee meetings.
• DiliTrust Data Room, a secure space for the controlled sharing of confidential digital documents.

Each of these platforms has its own functional specificity. For example, In the solution for digitizing boards of directors and executive committees each step of working procedures are dematerialized and each member of the board of directors can manage their decisions from an iPad, in complete security.

Improve compliance within the regulatory environment

Dematerializing also means rationalizing the constraints linked to reporting and information obligations. As we have seen, 40% of a lawyer’s time is monopolized by this type of mission with no real added value. However, the choice of dematerialized platforms saves precious time to meet these obligations. It can remind users about obligations to inform management of changes in legal or financial perimeters, to know the mapping of mediators, to know renewal deadlines, not to mention the breakdown of group companies by country which is a compliance obligation.

As far as reporting obligations are concerned, this is also a deluge with which the lawyer is confronted: registration, updates, strikes and many other formalities with the registry. Each year businesses must comply with legislation for the compliance of the mandates held and verify that the managers comply with this rule. Other examples include the filing of annual accounts, which take an average 6 months in the year, or the formalities for registering transfers of securities, the declaration of beneficial owners and other regulated agreements. On the side of the group’s bonds, there are also many of them: DGE every year, FATCA concerning the American tax authorities, the CBCR financial statement by country, and the consolidated tax return. To meet these requirements, it is necessary to move faster, but this is no longer enough, it is necessary to communicate with the company about legal activities which promote better compliance.

How can you effectively meet your reporting and information obligations? Here again, the approach will be both solution-based and pragmatic.

The first step, as already mentioned, is to automate as many tasks as possible with low added value. The second step involves harmonizing the processes and identifying who does what at what time. This will then be followed by the implementation of the solution that meets all reporting obligations.

Once implemented, this type of solution offers two collateral benefits: the management and enhancement of the Legal Department. Two assets linked to the digitization of the service, which also ensures its in-depth transformation. On the side of management, before going digital, it was difficult to know who was doing what, when how and it was also difficult to quantify the activity in question to better manage it. With the implementation of dashboards according to selected indicators (KPIs), you will be able to know the number of disputes over a year and modify the clauses of a contract according to their recurrence. Similarly, resource allocation will be easier by measuring the activity rate of each lawyer within your department. With these KPIs, the creation of reports will allow Legal Directors to accurately inform management of all activities and thus help them to make the right decisions based on the information delivered. These reports are also the tools to understand activities in a holistic way and to make better informed decisions.

LegalTech Proposals: The Foundations of Dematerialization

The first step in the transformation process is to adopt tools that automate and streamline processes and tasks with no added value as much as possible. For most Legal Departments, these projects are still in progress or about to be launched. Once this is completed, a significant number of additional tools can be evaluated to optimize the activity and its various facets. Among the most essential tasks are the following:

Production and drafting: The production and drafting of legal acts and documents can now be partially or fully automated.

Litigation: Litigation is an area occupied by many Legal Techs. Their abilities can range from statistical search engines to the prediction of litigation risks.

Document analysis: Specialist technology that automatically analyzes a large corpora of legal documents automatically.

Arbitration: Arbitration platforms entrust legal professionals with this task to resolve disputes. In frequent cases, such as customer relations. These platforms promise to accelerate the resolution of disputes in a matter of days.

Compliance: The scope of compliance covers many areas and requires monitoring, depending on the scope of the company, of conventions, standards, laws, and other texts. It also includes CSR. These are all subjects that require the active monitoring of texts and the implementation of company policies with related documentary follow-up.

Legal search engines and predictive justice: Predictive justice consists of anticipating the response of a jurisdiction faced with a typical case, with the greatest possible reduction in uncertainty. For the Legal Department, these tools can be of great help in calculating the estimated amount of compensation, anticipating risks, assisting in decision-making, etc. Many Legal Techs are present in this sector, with many of them using artificial intelligence for calculations and big data for data storage.

The tools for lawyers is a dynamic sector growing from strength to strength. For the time being, many tools still require more time to mature and meet marketing promises. More than ever, each solution must be evaluated and tested over a long enough period of time to see if it meets your needs.

With the advent of legaltechs, the tools available are plentiful and the cloud model allows for unparalleled flexibility and implementation speed. While they can speed up processes, care must be taken not to over invest in tools and evaluate them in terms of your processes and your organisations targets.

Artificial Intelligence(AI): When Predictive Data Accelerates

Whether it is artificial intelligence, chatbots, or blockchain, these three topics are on the agenda of each conference dedicated to the future of the legal professions. Whether to praise its their alleged benefits or, on the contrary, to antici- pate the substitution of professionals by intelligent (and conversational) machines.

As is often the case with the advent of new processes, we must proceed with caution and not give in to excessive enthusiasm or conservative scepticism but take these technologies for what they are: tools for business efficiency.

Artificial intelligence (AI): When Predictive Justice Accelerates

From surveying Legal Techs, many of them claim to use of artificial intelligence. After a somewhat advanced study, it must be recognized that the argument is often misleading or hyperbole. In the service providers’ defence, the very notion of artificial intelligence is fuzzy because the spectrum of the discipline is so vast and complex.

However, the progress of AI will have a major impact on legal professionals. Typically, in what is known as predictive justice, providers use a lot of data to derive statistics to support court decisions. In concrete terms, the objective is to collect data on, for example, case law and to have statistical analyses to put them in perspective. As in many other applications related to artificial intelligence, it is here that the computing and processing power related to statis- tical analysis does most of the work. A prodigious step forward, but still far from what one would expect from a true intelligence, even if it is artificial. To try to get closer to this intelligence, publishers use the machine learning technique. A process that helps the machine to recognize patterns by, for example, presenting images and describing each image to the machine. After a certain number of images, the machine will be able to recognize what is present on it automatically, without human intervention.

This learning technique is more or less identical for automated language processing. A complex discipline that involves many trades and many statistical algorithms and models, but whose application we see every day using Siri, Cortana or Google and Amazon’s voice assistants. Applied to law, applications are currently mostly highly developed search engines for analyzing contract clauses, assessing case law, among other things with a semantic layer to disambiguate texts and perform rankings. In other words, while artificial intelligence is progressing very quickly thanks to the computing power and volume of data available, we are still far from an intelligence that could replace the professional.

There also remains, in an area as open to interpretation as law, the problem raised by ‘algorithmic bias’. In essence, an algorithm that is programmed by humans, with all their cognitive biases. Once implemented by the machine, these shortcomings are amplified and exacerbated with all the deviations that can be imagined. This subject of the ethics of algorithms (and therefore of man) is at the heart of the issues related to the development of artificial intelligence, applied to law or not. In any case, these tools with or without real artificial intelligence can be of great help in accelerating the tasks of the in-house lawyer and transforming him into an ‘augmented lawyer’.

Legal Robotics: It is only the beginning

With the emergence of artificial intelligence, conversatio- nal and other robots are also taking on a new dimension. Since the first chatbots were present in operating systems and conversational agents in the 1990s, the qualitative leap has been impressive, just like the demonstration of Google Duplex, the Google assistant robot that is able to call a human being to make an appointment for you. We are not there yet in the legal field, but many law firms and compa- nies use these conversational agents to answer lawyers or jurists on specific questions. Here again, these robots rely on a combination of a corpus of decision-making algorithms, automatic language processing and a search engine. Thanks to this technological assembly, these bots, like LOL, of the SNCF provide more or less advanced answers and functions depending on the degree of technicality. LOL, for example, answers the company’s lawyers to the most frequently asked questions on various subjects, such as RGPD, for example.

In 2017, a similar approach was implemented by EDF for employees in order to reduce the need for in-house lawyers. Easy to use, these applications make it possible to implement effective customer service, both internally and externally, to answer questions asked by corporate lawyers and for some to perform some of the mandatory tasks such as drafting a standard contract, NDAs and other recurring clauses. Inexpensive, the business benefit of these applications is immediate and also allows the professional to save time and focus on his core business.

Blockchain, the real legal disruption

From its initial offering, Blockchain is probably the most worrying technology for the legal professions. Indeed, in his founding document, the designer of the blockchain wanted to set up a decentralized registry of transactions that would be inviolable, non-repudiable and whose data are immutable and non-repudiable. Each computer keeps a record of all transactions. Its objective is to restore trust in digital exchanges and to dispense with trusted third parties. Following this definition, it is not necessary to be a great cleric to see the possible applications in the legal sector. The most obvious is undoubtedly the protection of intellectual property. It is quite simple to code a device, for example, and save it as a code in a blockchain. In case of dispute, the insertion date cannot be changed. In the same way, the contracts made between parties can be inserted in a chain in the form of «smart contracts», a technique invented by the Ethereum consortium.

Contrary to its name, a «smart contract» is not an intelli- gent contract, but a code intended to trigger an action, for example to execute an obligation or trigger a payment if conditions are met, validate a person’s access levels to an application, validate documents, etc.

The strength of the smart contract lies in the immutability of the data entered and the near impossibility of falsifying, modifying or hacking into the data. Here too, everyone could think that the trusted third party is doomed to disappear, supplanted by the technical system. Far from it. On the one hand, for smarts contracts to be recorded and operated, an intermediary is still required to validate the existence of a document encoded in the blockchain. Technical inter- mediaries, called Oracles, play this role. In the current legal framework, it is still necessary to call upon a bailiff to administer the proof. Moreover, the evidence provided by the blockchain is still subject to legal questioning, and in any case less than that provided by evidence of authentic value recognized under the current legal framework.

But blockchain is still a young technology. For some, its importance is equal to that of the Internet in terms of techno- logical and societal revolution. The financial and legal issues raised by the blockchain confront it with strong systemic resistance. But the need for trust in transactions grows in proportion to their volume. The European legislator, anxious to boost the single digital market, is starting to look into the subject.

The promises of artificial intelligence and blockchain are still to be fulfilled. The first has made a lot of progress thanks to the volume of data available, but publishers often overtake the role of AI in their software. The blockchain will be a useful ally for the legal and numerical professions, but still lacks technical maturity and legal recognition. Ultimately, the revolution will come from the quantum computer to computing capabilities beyond what we currently know.

Lost in transition

It is fair to say that we live in an era where there is non stop acceleration. This is especially true for technology, which is on an exponential curve. Following artificial intelligence and blockchain, what could be the next technology discovery? It is anyone’s guess but the most promising one perhaps is the quantum computer. In essence to perform a simple operation, a standard computer performs the instructions one after the other. However, the quantum computer realizes all these instructions simultaneously. While they are still in developement, the first advanced quantum computers are already operational at IBM, Google or Microsoft. Given the possibilities offered by this technology, this opens up a dizzying abyss the applications. of the future. Only time will tell.

The path of digital transition opens up new avenues for legal departments at a time of peak demand: legislative and normative inflation, compliance and GDPR are just some of the issues which are piling up on top of daily in-house tasks. The shining and sincere promise of legaltechs comes at a crucial moment to aid legal professionals to tackle these tasks which reduce efficiency and value creation. The fears within the legal profession that their work will be in the future automized by artificial intelligence and uberized by digital platforms is, as this white paper has argued, without foundation.

The importance of a legal framework for the successful outcome of cases has never been so real. When used properly, this framework can be a real business accelerator. Today there is a growing responsibility for Legal Departments to move towards business partner status and create more value. More than ever, digitalisation offers professionals the opportunity to to return to their core roles, namely to provide solutions and advice in the enterprise. Within the framework of these pages, we have identified some basic rules to do this. But, at the risk of repeating ourselves, the most important thing to negotiate during this transition to a 4.0 Legal Department, is the accompanying cultural change. Enabling this while providing the necessary strategic support will provide Legal Departments with a new impetus towards their role as the central axis of the company.