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TIME FOR LAW FIRMS ROBOT LAWYERS AND LAW FIRMS MUST GET LITIGATION HAS VALUE 04 VIRTUAL ASSISTANTS 10 DOWN TO BUSINESS 18 WORTH INVESTMENT 03 TO EMBRACE CHANGE Artificial intelligence offers law Management efficiencies for There’s a new source of finance UK lawyers face uncertain times as legal aid and fees are squeezed firms a business opportunity a more professional approach to fund law suits and justice RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 03 Getty Images LEGAL INNOVATION

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PUBLISHING MANAGER HEAD OF PRODUCTION Marcus Pemberton Natalia Rosek

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MANAGING EDITOR DESIGN Peter Archer Samuele Motta Grant Chapman Kellie Jerrard It’s time for law firms CONTRIBUTORS to embrace change JONATHAN AMES CATHERINE BAKSI Legal affairs reporter for Former barrister and The Times, he is editor Law Society Gazette Despite increasing numbers, lawyers in the UK face uncertain of the newspaper’s daily reporter, she is a freelance law bulletin The Brief. journalist writing for a times as legal aid and fees are squeezed, and alternative firms broad range of law titles. owned by non-lawyers provide competition ALISON COLEMAN EDWARD FENNELL Writer and editor, she is a Award-winning specialist contributor to Forbes, The writer on business law Guardian, Director, Economia and the legal industry, and Employee Benefits. he is a regular contributor OVERVIEW Of that group of 150,000 lawyers, ing – whether to offshore providers So will it all burst with a loud to The Times. JONATHAN AMES it is the commercial practitioners in in India, South Africa or the Philip- bang for the UK’s legal profession? and around the City of London who pines, or nearshore in Manchester, “It is clear that the world – and JOANNA GOODMAN GRANIA ever has there been a are the most struttingly confident, Glasgow and Belfast – is already the markets that we operate in – is Writer and editor covering LANGDON-DOWN starker contrast between casting themselves as a signifi- hitting them. changing rapidly,” acknowledges the business, legal and Freelance legal journalist, the “haves” and the cant national asset. The 2015 Legal Next, argue many, will come au- Gideon Moore, the lawyer elect- technology sectors, she she was the Press “have-nots” in the legal Services report from TheCityUK, tomation in the shape of artificial ed last November to take over the contributes to national Association’s crime and N profession than over the last year. a lobbying group promoting busi- intelligence. In ten years’ time, managing partner role at Linklat- and international legal affairs correspondent, On the one hand, public law practi- nesses in the Square Mile, claimed runs the argument, one robot law- ers, one of London’s five magic cir- publications and websites. and now writes for The Times law section, legal tioners felt so frustrated at the scale the contribution of large law firms yer will handle the grinding job cle law firms. magazines and websites. of government cuts to legal aid eli- to the UK economy is growing at of document review that formally “Firms need to be brave and em- gibility and fees that they manned more than 9 per cent annually. The required ten young human as- brace change, looking for the many the braziers in strike action. On the most recent figure is a contribution sociates. And the robot won’t go opportunities it presents rather CHARLES RACHEL ROTHWELL other, parliament’s public accounts of £22.6 billion, for constant tea than the threats it poses,” he adds, ORTON-JONES Editor of the Law Society’s watchdog expressed indignant out- equating to 1.6 per breaks, waste time flirting with the jargon trap that Award-winning journalist, magazine Litigation rage that at least one of the City of cent of the coun- on social media or snares so many in the City. But then he was editor-at-large Funding, she also edits PI of LondonlovesBusiness. Focus, published by the London’s elite “magic circle” law try’s gross domes- have anything re- he gives a clear nod to the impor- com and editor of Association of Personal firms was billing out its partners at tic product. sembling partner- tance of evolving structures, if not EuroBusiness. Injury Lawyers. £1,000 an hour when working for The evidence is Students still ship aspirations. an outright welcome to the robots. the government. clear, then – stu- want to be lawyers, And then there “Firms need to keep close to their The irony that taxpayers have dents still want the market is still are the account- clients,” says Mr Moore, “establish- to fork out in both instances has to be lawyers, the ants. Three of ing long-term relationships, and not been lost on some. Yet despite market is still growing and top- the global big delivering their service effectively these grumbles, on the surface the growing and top- flight commercial four – PwC, EY and efficiently.” UK legal profession seems to be in flight commercial lawyers are and KPMG – have James Burns, senior partner at rude health. lawyers are bring- been granted al- Clyde & Co, a fellow City law firm, The number of practising solici- ing home the bacon bringing home ternative business expands on this theme, narrowing tors in England and Wales – the big- for UK plc. the bacon for structure licences, down success to ever-greater moves gest branch of the legal profession in But for how much UK plc which means that towards specialisation. the UK’s biggest jurisdiction – con- longer? Is the legal in England and “The days when a firm could af- tinues to grow at a pace that would profession a bub- Wales they are law ford to be all things to all people are make a mother elephant proud. ble in search of a firms. PwC and EY long gone,” Mr Burns says. “If you Although this publication is funded through advertising and According to the profession’s reg- pin prick? have launched significant recruit- are going to succeed, you need to be sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership in- ulator, at December 2009, in the The problems on the high street ment drives in London, poaching clear on who your clients are, what quiries or feedback, please call +44 (0)20 8616 7400 or e-mail aftermath of the global financial are arguably easier to identify. Gen- lawyers from traditional Square they need from you and how you [email protected] crisis, there were nearly 112,600 eral practice law firms are being Mile law firms. can best deliver those solutions. Raconteur is a leading publisher of special-interest content practising solicitors and as of April buffeted by ever-shrinking legal aid And even if you believe the pub- Those answers are never static so and research. Its publications and articles cover a wide range this year that figure had rocketed eligibility and tightening fee rates, lic statements from the account- you need to be nimble too. Our ex- of topics, including business, finance, sustainability, health- to nearly 135,000 – an increase of as well as reforms to personal inju- ancy practices – that they are not perience is that one way to do that care, lifestyle and technology. Raconteur special reports are about 20 per cent. ry claims, and encroachment by so- targeting the clients of the top- is to focus on a handful of sectors in published exclusively in The Times and The Sunday Times as well The Bar is also growing, albeit, far called market disrupters in the form ten City law firms – they will at which we can truly live and breathe as online at raconteur.net more sedately. In 2010 there were of high-volume alternative business least eat into the profit margins our client’s business.” The information contained in this publication has been ob- tained from sources the Proprietors believe to be correct. 14,900 practising barristers and structures owned by non-lawyers. of the mid-tier solicitor players. However, no legal liability can be accepted for any errors. No four years later (the most recent fig- But those “masters of the uni- Mass consolidation in that market Share this article online via part of this publication may be reproduced without the prior ure available), there were slightly verse” in the City are hardly exempt has been forecast before; now it Raconteur.net consent of the Publisher. © Raconteur Media more than 15,700. from the tides of change. Outsourc- looks inevitable.

BUSINESS CULTURE FINANCE HEALTHCARE LIFESTYLE SUSTAINABILITY TECHNOLOGY INFOGRAPHICS raconteur.net/legal-innovation-2016 RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 03 Getty Images LEGAL INNOVATION

DISTRIBUTED IN

RACONTEUR

PUBLISHING MANAGER HEAD OF PRODUCTION Marcus Pemberton Natalia Rosek

PRODUCTION EDITOR DIGITAL CONTENT MANAGER Benjamin Chiou Sarah Allidina

MANAGING EDITOR DESIGN Peter Archer Samuele Motta Grant Chapman Kellie Jerrard It’s time for law firms CONTRIBUTORS to embrace change JONATHAN AMES CATHERINE BAKSI Legal affairs reporter for Former barrister and The Times, he is editor Law Society Gazette Despite increasing numbers, lawyers in the UK face uncertain of the newspaper’s daily reporter, she is a freelance law bulletin The Brief. journalist writing for a times as legal aid and fees are squeezed, and alternative firms broad range of law titles. owned by non-lawyers provide competition ALISON COLEMAN EDWARD FENNELL Writer and editor, she is a Award-winning specialist contributor to Forbes, The writer on business law Guardian, Director, Economia and the legal industry, and Employee Benefits. he is a regular contributor OVERVIEW Of that group of 150,000 lawyers, ing – whether to offshore providers So will it all burst with a loud to The Times. JONATHAN AMES it is the commercial practitioners in in India, South Africa or the Philip- bang for the UK’s legal profession? and around the City of London who pines, or nearshore in Manchester, “It is clear that the world – and JOANNA GOODMAN GRANIA ever has there been a are the most struttingly confident, Glasgow and Belfast – is already the markets that we operate in – is Writer and editor covering LANGDON-DOWN starker contrast between casting themselves as a signifi- hitting them. changing rapidly,” acknowledges the business, legal and Freelance legal journalist, the “haves” and the cant national asset. The 2015 Legal Next, argue many, will come au- Gideon Moore, the lawyer elect- technology sectors, she she was the Press “have-nots” in the legal Services report from TheCityUK, tomation in the shape of artificial ed last November to take over the contributes to national Association’s crime and N profession than over the last year. a lobbying group promoting busi- intelligence. In ten years’ time, managing partner role at Linklat- and international legal affairs correspondent, On the one hand, public law practi- nesses in the Square Mile, claimed runs the argument, one robot law- ers, one of London’s five magic cir- publications and websites. and now writes for The Times law section, legal tioners felt so frustrated at the scale the contribution of large law firms yer will handle the grinding job cle law firms. magazines and websites. of government cuts to legal aid eli- to the UK economy is growing at of document review that formally “Firms need to be brave and em- gibility and fees that they manned more than 9 per cent annually. The required ten young human as- brace change, looking for the many the braziers in strike action. On the most recent figure is a contribution sociates. And the robot won’t go opportunities it presents rather CHARLES RACHEL ROTHWELL other, parliament’s public accounts of £22.6 billion, for constant tea than the threats it poses,” he adds, ORTON-JONES Editor of the Law Society’s watchdog expressed indignant out- equating to 1.6 per breaks, waste time flirting with the jargon trap that Award-winning journalist, magazine Litigation rage that at least one of the City of cent of the coun- on social media or snares so many in the City. But then he was editor-at-large Funding, she also edits PI of LondonlovesBusiness. Focus, published by the London’s elite “magic circle” law try’s gross domes- have anything re- he gives a clear nod to the impor- com and editor of Association of Personal firms was billing out its partners at tic product. sembling partner- tance of evolving structures, if not EuroBusiness. Injury Lawyers. £1,000 an hour when working for The evidence is Students still ship aspirations. an outright welcome to the robots. the government. clear, then – stu- want to be lawyers, And then there “Firms need to keep close to their The irony that taxpayers have dents still want the market is still are the account- clients,” says Mr Moore, “establish- to fork out in both instances has to be lawyers, the ants. Three of ing long-term relationships, and not been lost on some. Yet despite market is still growing and top- the global big delivering their service effectively these grumbles, on the surface the growing and top- flight commercial four – PwC, EY and efficiently.” UK legal profession seems to be in flight commercial lawyers are and KPMG – have James Burns, senior partner at rude health. lawyers are bring- been granted al- Clyde & Co, a fellow City law firm, The number of practising solici- ing home the bacon bringing home ternative business expands on this theme, narrowing tors in England and Wales – the big- for UK plc. the bacon for structure licences, down success to ever-greater moves gest branch of the legal profession in But for how much UK plc which means that towards specialisation. the UK’s biggest jurisdiction – con- longer? Is the legal in England and “The days when a firm could af- tinues to grow at a pace that would profession a bub- Wales they are law ford to be all things to all people are make a mother elephant proud. ble in search of a firms. PwC and EY long gone,” Mr Burns says. “If you Although this publication is funded through advertising and According to the profession’s reg- pin prick? have launched significant recruit- are going to succeed, you need to be sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership in- ulator, at December 2009, in the The problems on the high street ment drives in London, poaching clear on who your clients are, what quiries or feedback, please call +44 (0)20 8616 7400 or e-mail aftermath of the global financial are arguably easier to identify. Gen- lawyers from traditional Square they need from you and how you [email protected] crisis, there were nearly 112,600 eral practice law firms are being Mile law firms. can best deliver those solutions. Raconteur is a leading publisher of special-interest content practising solicitors and as of April buffeted by ever-shrinking legal aid And even if you believe the pub- Those answers are never static so and research. Its publications and articles cover a wide range this year that figure had rocketed eligibility and tightening fee rates, lic statements from the account- you need to be nimble too. Our ex- of topics, including business, finance, sustainability, health- to nearly 135,000 – an increase of as well as reforms to personal inju- ancy practices – that they are not perience is that one way to do that care, lifestyle and technology. Raconteur special reports are about 20 per cent. ry claims, and encroachment by so- targeting the clients of the top- is to focus on a handful of sectors in published exclusively in The Times and The Sunday Times as well The Bar is also growing, albeit, far called market disrupters in the form ten City law firms – they will at which we can truly live and breathe as online at raconteur.net more sedately. In 2010 there were of high-volume alternative business least eat into the profit margins our client’s business.” The information contained in this publication has been ob- tained from sources the Proprietors believe to be correct. 14,900 practising barristers and structures owned by non-lawyers. of the mid-tier solicitor players. However, no legal liability can be accepted for any errors. No four years later (the most recent fig- But those “masters of the uni- Mass consolidation in that market Share this article online via part of this publication may be reproduced without the prior ure available), there were slightly verse” in the City are hardly exempt has been forecast before; now it Raconteur.net consent of the Publisher. © Raconteur Media more than 15,700. from the tides of change. Outsourc- looks inevitable.

BUSINESS CULTURE FINANCE HEALTHCARE LIFESTYLE SUSTAINABILITY TECHNOLOGY INFOGRAPHICS raconteur.net/legal-innovation-2016 04 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 05

Based on the IBM Watson plat- to the People with Significant form, Kim assimilates documents Control rules. LAW FIRMS AND AUTOMATION and uses the information to build “Clients can click on a link and an- CAN YOU ENVISION A LAW-FOCUSED ARTIFICIAL INTELLIGENCE REPLACING workflows, reflecting the reference swer ten questions to find out imme- ANY OF THE FOLLOWING IN THE NEXT FIVE TO TEN YEARS? Meet the robot lawyers by Professor Harrick Vin, vice pres- diately whether they are affected,” ident and global head of Digitate, says Mr Wildisen. This application Paralegals 47% at the AI Summit in London, to AI of AI is infinitely scalable. “Each app representing service-as-software as offers the ability to solve a particular First-year associates 35% and virtual assistants opposed to software-as-a-service. problem for an unlimited number of “Kim has been described as virtual parties concurrently,” he says, adding software development AI,” explains that AI has the potential to extend le- Two to three-year associates 19.2% Robot lawyers or artificially intelligent software offer law firms an Mr Chapman. gal services to people who have been Kim’s triage capability manages failed by the justice system. Four to six-year associates 6.4% opportunity to enhance and expand their practice while allowing a legal team’s workload, allocating London’s first LegalTech Hacka- cases to the appropriate in-house thon, which was organised by Legal Service partners 13.5% the legal experts to concentrate on their core business or external adviser and generating Geek to help Hackney Community real-time management informa- Law Centre deliver more cost-effec- Yes, but not in five to ten years 38% tion about the department’s work tive legal advice, was won by Fresh In- in progress. novate, a team from Computers will never replace At enterprise lev- magic circle firm human practitioners 20.3% el, Kim supports Freshfields Bruck- ARTIFICIAL INTELLIGENCE decision-making. haus Deringer. The Source: Altman Weil 2015 JOANNA GOODMAN “For example, Kim AI adds value Hackathon pro- can manage IT duced AI-powered EXPECTED IMPACT OF TECHNOLOGY AND INNOVATION supplier contracts, by modelling tools including a High levels of replacement lenty of media attention has interrogating all and reapplying triage service for 1% been devoted to robots re- contracts and incoming queries Medium levels of replacement expert knowledge 1% placing lawyers. Converse- work in progress, in a fast, and a comprehen- Low levels of replacement ly, some industry players and flagging up sive case manage- No replacement LAW F P scalable way IRMS claim that artificial intelligence (AI) any discrepancies, ment solution built is simply a buzzword used to sell conflicts or po- on the Neota Logic Don’t know software to law firms. tential issues,” Mr platform. “Are many AI-badged products Chapman adds. AI is impacting every part of the 10% just rule-based decision-making Kim helps lawyers work effective- industry. Last year, Stanford Uni- tools?” asks Alex Smith, platform ly by delivering relevant informa- versity computer science student IN- HOU innovation lead at LexisNexis UK. tion and suggesting solutions in Joshua Browder from north London SE “What counts as AI?” real time. Like ROSS, LONald and developed DoNotPay.co.uk, a free 7% AI in business has moved beyond Kira, Kim is generally accessed on- online chatbot that handles parking % process automation to include nat- line, although it can be installed ticket appeals instead of a lawyer. 8 ural language processing and ma- on-premise. It is based on English law, but there 40% chine-learning, whereby computers Ms Lightfoot emphasises that AI is are plans to expand the service to 35% are trained to interpret information moving up the legal vertical. It is not the United States. 3% and adjust their processes to user just about back-office administra- Key benefits of AI include en- feedback. Rather than searching tion, legal research and know-how hanced competitive advantage as for keywords or strings of words, – it is also front-end, client-facing firms that invest in AI can take on the software reads and understands Getty Images services and business development. more work at competitive rates while 47% information, so its findings and rec- According to Neota Logic chief ex- maintaining their margins. 48% ommendations are based on contex- IBM’s cogni- Although legal work typically in- futurist and author Chrissie Light- ecutive Richard Seabrook, the “last As legal AI is generally cloud- tual elements. tive computing volves extracting information from foot. “But most firms don’t want to mile” to wholesale AI adoption is “to based, the barriers to adoption are Gerard Frith, chief executive of AI platform Watson contracts and other documents, as break the business model so they include expertise in software”. Neo- low. Virtual assistants RAVN, ROSS consultancy Matter, explains how powers legal re- ROSS chief executive and co-founder won’t change until they are told to ta’s smart apps tackle exactly that, and Kira could enable smaller firms AI adds value by modelling and re- search tool ROSS, Andrew Arruda and others say, law- by their clients.” encapsulating legal knowledge, to extend their services when neces- which can cut law applying expert knowledge in a fast, yers’ core skills are around interpret- Riverview Law chief executive reasoning and judgment to provide sary without employing additional firms’ time spent scalable way. AI enables law firms on research and ing that information into legal advice. and founder Karl Chapman agrees self-service real-time legal advice. support staff. to complete repetitive tasks that data analysis Kira Systems’ due diligence and that client companies are driving Greg Wildisen, Neota’s inter- AI’s scalability supports business Source: Winmark/Mayer Brown/Thomson Reuters 2015 involve legal precedents and spe- contract analysis software facilitates AI adoption. Riverview Law’s Kim national managing director, of- development. Once clients realise cific know-how dramatically faster, mergers and acquisitions (M&A) by – knowledge, information, meaning fers an example. Taylor Wessing that a firm can turn around large Legal innovation is one of 2016’s David Halliwell, director of freeing up lawyers to concentrate on analysing documents relating to the – is an AI platform powering a range used Neota to develop an inter- volumes of documents extremely big stories and this includes larger knowledge, risk and legal services more complicated tasks. target company to identify clauses of virtual assistants that support active app that clients can use to quickly, they are likely to make use firms investing in innovative tech- at Pinsent Masons, agrees. “The Applications that combine nat- that could affect the deal. corporate legal departments. find out whether they are subject of this capability. nology. Dentons’ NextLaw Labs requirements of data and system ural language processing and ma- Co-founder Noah Waisberg ex- was an early investor in ROSS. Big integration mean that firms will chine-learning are conducting legal plains that due diligence represents legal publishers are following suit, need in-house capability to devel- research that was previously under- 30 to 60 per cent of the work in many CASE STUDY: ROSS AT BAKERHOSTETLER perhaps reacting to AI-powered le- op, exploit and integrate AI and taken by junior associates. Other transactions. In addition to produc- gal research assistants. Last year other systems to rapidly deploy AI-powered tools handle adminis- ing 20 to 90 per cent time-saving on LexisNexis acquired Lex Machi- solutions for specific deal and cli- trative and management tasks such contract reviews, because Kira’s sys- na, an AI-powered engine that ent needs. Clients will get used to as work intake and allocation. tem is trained by experienced prac- support lawyer role, undertaking recognition and voice-to-text applies natural language process- seeing data scientists on deal team US firm BakerHostetler recently titioners, it helps to “institutionalise legal research to support capability, lawyers prefer to ing to public court documents to sheets as AI skills move from back employed “artificially intelligent a firm’s knowledge advantage” by BakerHostetler’s attorneys by type their queries rather than predict outcomes in intellectual office to front office, and end up attorney” ROSS in its bankruptcy allowing junior lawyers to benefit finding appropriate precedents speaking to the computer. property litigation. leading and driving deals.” practice. Some 20 firms are also tri- from the skills of their senior col- and other documents, and ROSS incorporates supervised Entrusting tasks to AI will im- RAVN chief executive Peter alling ROSS. leagues, he says. answering legal questions that and unsupervised machine- pact on the structure of law firms Wallqvist is looking to lower the LONald, Berwin Leighton Pais- Firms developing in-house relate to the matters they handle. learning. “Our legal specialists and the industry. Milos Kresoje- barriers to legal AI. “The next step is ner’s “robotic contract lawyer”, AI-powered tools include Linklat- ROSS is built on the IBM have trained ROSS and helped vic, enterprise architect at Fresh- to integrate AI into the fabric of the powered by RAVN’s applied cogni- ers’ Verifi, which checks client Watson AI platform. As Andrew to point it towards appropriate fields, envisages legal AI lead- business by creating more interfac- tive engine supports the law firm’s names for banks, and Pinsent Ma- On May 11, US law firm Arruda, chief executive and answers to various questions,” ing to profound changes in roles es with firms’ IT systems so people real estate practice, handling due sons’ TermFrame, which analyses BakerHostetler announced co-founder explains, rather than explains Mr Arruda. “We also and training. don’t have to understand AI to bene- diligence on property transactions. loan agreements and guides lawyers that it had hired artificially typing in a word or phrase, you encourage users to up-vote and “There will be a shift in the skills fit from it,” he says. It connects with the Land Registry through transactions. intelligent attorney ROSS for its can ask ROSS a natural language down-vote passages to confirm required to leverage the productivi- AI in the legal sector is incre- site to verify property details and Legal AI is currently pointed at bankruptcy practice. “We believe question in the same way as a or deny ROSS’s interpretation of ty potential of new, smart technolo- mentally disruptive and its impact collates the results in a spreadsheet. specific tasks. This is because the AI that emerging technologies like junior lawyer might consult an the question. Every time a user gies, with an increased emphasis on should not be underestimated. So should lawyers worry about engine is trained to identify specif- cognitive computing and other experienced colleague. ROSS interacts with ROSS, it becomes cross-disciplinary engineering and “Law firms sticking to a traditional being replaced by robots? Bob ic data points and learn from user forms of machine-learning can then reads through the law smarter.” ROSS is accessed as an scientific skills and the ability to model may find themselves disrupt- Craig, chief information officer at feedback. As Mr Waisberg explains, help enhance the services we and legal precedence, gathers online subscription service. adapt to a workplace that is staffed ed if they do not leverage the tech- BakerHostetler, does not think so. it took more than two years to devel- deliver to our clients,” says chief evidence, draws inferences and ROSS Intelligence was the first by people and machines,” says Mr nology,” concludes Alexander Duis- “ROSS is not a way to replace our op Kira’s due diligence software. information officer Bob Craig. returns an evidence-based answer. company backed by NextLaw Kresojevic, who is looking at how berg, partner at Bird & Bird. attorneys – it is a supplemental The growth of AI in legal is fuelled ROSS, developed by ROSS Although ROSS can be Labs, the innovation arm of AI can bring end-to-end efficiencies tool to help them move faster, learn by client demand. “AI is happen- Intelligence, fulfils a professional programmed to include voice international law firm Dentons. while considering the impact on IT Share this article online via faster and continually improve,” ing now and firms that act quickly governance of task-specific quick- raconteur.net says Mr Craig. will reap the benefits,” says legal win solutions. 04 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 05

Based on the IBM Watson plat- to the People with Significant form, Kim assimilates documents Control rules. LAW FIRMS AND AUTOMATION and uses the information to build “Clients can click on a link and an- CAN YOU ENVISION A LAW-FOCUSED ARTIFICIAL INTELLIGENCE REPLACING workflows, reflecting the reference swer ten questions to find out imme- ANY OF THE FOLLOWING IN THE NEXT FIVE TO TEN YEARS? Meet the robot lawyers by Professor Harrick Vin, vice pres- diately whether they are affected,” ident and global head of Digitate, says Mr Wildisen. This application Paralegals 47% at the AI Summit in London, to AI of AI is infinitely scalable. “Each app representing service-as-software as offers the ability to solve a particular First-year associates 35% and virtual assistants opposed to software-as-a-service. problem for an unlimited number of “Kim has been described as virtual parties concurrently,” he says, adding software development AI,” explains that AI has the potential to extend le- Two to three-year associates 19.2% Robot lawyers or artificially intelligent software offer law firms an Mr Chapman. gal services to people who have been Kim’s triage capability manages failed by the justice system. Four to six-year associates 6.4% opportunity to enhance and expand their practice while allowing a legal team’s workload, allocating London’s first LegalTech Hacka- cases to the appropriate in-house thon, which was organised by Legal Service partners 13.5% the legal experts to concentrate on their core business or external adviser and generating Geek to help Hackney Community real-time management informa- Law Centre deliver more cost-effec- Yes, but not in five to ten years 38% tion about the department’s work tive legal advice, was won by Fresh In- in progress. novate, a team from Computers will never replace At enterprise lev- magic circle firm human practitioners 20.3% el, Kim supports Freshfields Bruck- ARTIFICIAL INTELLIGENCE decision-making. haus Deringer. The Source: Altman Weil 2015 JOANNA GOODMAN “For example, Kim AI adds value Hackathon pro- can manage IT duced AI-powered EXPECTED IMPACT OF TECHNOLOGY AND INNOVATION supplier contracts, by modelling tools including a High levels of replacement lenty of media attention has interrogating all and reapplying triage service for 1% been devoted to robots re- contracts and incoming queries Medium levels of replacement expert knowledge 1% placing lawyers. Converse- work in progress, in a fast, and a comprehen- Low levels of replacement ly, some industry players and flagging up sive case manage- No replacement LAW F P scalable way IRMS claim that artificial intelligence (AI) any discrepancies, ment solution built is simply a buzzword used to sell conflicts or po- on the Neota Logic Don’t know software to law firms. tential issues,” Mr platform. “Are many AI-badged products Chapman adds. AI is impacting every part of the 10% just rule-based decision-making Kim helps lawyers work effective- industry. Last year, Stanford Uni- tools?” asks Alex Smith, platform ly by delivering relevant informa- versity computer science student IN- HOU innovation lead at LexisNexis UK. tion and suggesting solutions in Joshua Browder from north London SE “What counts as AI?” real time. Like ROSS, LONald and developed DoNotPay.co.uk, a free 7% AI in business has moved beyond Kira, Kim is generally accessed on- online chatbot that handles parking % process automation to include nat- line, although it can be installed ticket appeals instead of a lawyer. 8 ural language processing and ma- on-premise. It is based on English law, but there 40% chine-learning, whereby computers Ms Lightfoot emphasises that AI is are plans to expand the service to 35% are trained to interpret information moving up the legal vertical. It is not the United States. 3% and adjust their processes to user just about back-office administra- Key benefits of AI include en- feedback. Rather than searching tion, legal research and know-how hanced competitive advantage as for keywords or strings of words, – it is also front-end, client-facing firms that invest in AI can take on the software reads and understands Getty Images services and business development. more work at competitive rates while 47% information, so its findings and rec- According to Neota Logic chief ex- maintaining their margins. 48% ommendations are based on contex- IBM’s cogni- Although legal work typically in- futurist and author Chrissie Light- ecutive Richard Seabrook, the “last As legal AI is generally cloud- tual elements. tive computing volves extracting information from foot. “But most firms don’t want to mile” to wholesale AI adoption is “to based, the barriers to adoption are Gerard Frith, chief executive of AI platform Watson contracts and other documents, as break the business model so they include expertise in software”. Neo- low. Virtual assistants RAVN, ROSS consultancy Matter, explains how powers legal re- ROSS chief executive and co-founder won’t change until they are told to ta’s smart apps tackle exactly that, and Kira could enable smaller firms AI adds value by modelling and re- search tool ROSS, Andrew Arruda and others say, law- by their clients.” encapsulating legal knowledge, to extend their services when neces- which can cut law applying expert knowledge in a fast, yers’ core skills are around interpret- Riverview Law chief executive reasoning and judgment to provide sary without employing additional firms’ time spent scalable way. AI enables law firms on research and ing that information into legal advice. and founder Karl Chapman agrees self-service real-time legal advice. support staff. to complete repetitive tasks that data analysis Kira Systems’ due diligence and that client companies are driving Greg Wildisen, Neota’s inter- AI’s scalability supports business Source: Winmark/Mayer Brown/Thomson Reuters 2015 involve legal precedents and spe- contract analysis software facilitates AI adoption. Riverview Law’s Kim national managing director, of- development. Once clients realise cific know-how dramatically faster, mergers and acquisitions (M&A) by – knowledge, information, meaning fers an example. Taylor Wessing that a firm can turn around large Legal innovation is one of 2016’s David Halliwell, director of freeing up lawyers to concentrate on analysing documents relating to the – is an AI platform powering a range used Neota to develop an inter- volumes of documents extremely big stories and this includes larger knowledge, risk and legal services more complicated tasks. target company to identify clauses of virtual assistants that support active app that clients can use to quickly, they are likely to make use firms investing in innovative tech- at Pinsent Masons, agrees. “The Applications that combine nat- that could affect the deal. corporate legal departments. find out whether they are subject of this capability. nology. Dentons’ NextLaw Labs requirements of data and system ural language processing and ma- Co-founder Noah Waisberg ex- was an early investor in ROSS. Big integration mean that firms will chine-learning are conducting legal plains that due diligence represents legal publishers are following suit, need in-house capability to devel- research that was previously under- 30 to 60 per cent of the work in many CASE STUDY: ROSS AT BAKERHOSTETLER perhaps reacting to AI-powered le- op, exploit and integrate AI and taken by junior associates. Other transactions. In addition to produc- gal research assistants. Last year other systems to rapidly deploy AI-powered tools handle adminis- ing 20 to 90 per cent time-saving on LexisNexis acquired Lex Machi- solutions for specific deal and cli- trative and management tasks such contract reviews, because Kira’s sys- na, an AI-powered engine that ent needs. Clients will get used to as work intake and allocation. tem is trained by experienced prac- support lawyer role, undertaking recognition and voice-to-text applies natural language process- seeing data scientists on deal team US firm BakerHostetler recently titioners, it helps to “institutionalise legal research to support capability, lawyers prefer to ing to public court documents to sheets as AI skills move from back employed “artificially intelligent a firm’s knowledge advantage” by BakerHostetler’s attorneys by type their queries rather than predict outcomes in intellectual office to front office, and end up attorney” ROSS in its bankruptcy allowing junior lawyers to benefit finding appropriate precedents speaking to the computer. property litigation. leading and driving deals.” practice. Some 20 firms are also tri- from the skills of their senior col- and other documents, and ROSS incorporates supervised Entrusting tasks to AI will im- RAVN chief executive Peter alling ROSS. leagues, he says. answering legal questions that and unsupervised machine- pact on the structure of law firms Wallqvist is looking to lower the LONald, Berwin Leighton Pais- Firms developing in-house relate to the matters they handle. learning. “Our legal specialists and the industry. Milos Kresoje- barriers to legal AI. “The next step is ner’s “robotic contract lawyer”, AI-powered tools include Linklat- ROSS is built on the IBM have trained ROSS and helped vic, enterprise architect at Fresh- to integrate AI into the fabric of the powered by RAVN’s applied cogni- ers’ Verifi, which checks client Watson AI platform. As Andrew to point it towards appropriate fields, envisages legal AI lead- business by creating more interfac- tive engine supports the law firm’s names for banks, and Pinsent Ma- On May 11, US law firm Arruda, chief executive and answers to various questions,” ing to profound changes in roles es with firms’ IT systems so people real estate practice, handling due sons’ TermFrame, which analyses BakerHostetler announced co-founder explains, rather than explains Mr Arruda. “We also and training. don’t have to understand AI to bene- diligence on property transactions. loan agreements and guides lawyers that it had hired artificially typing in a word or phrase, you encourage users to up-vote and “There will be a shift in the skills fit from it,” he says. It connects with the Land Registry through transactions. intelligent attorney ROSS for its can ask ROSS a natural language down-vote passages to confirm required to leverage the productivi- AI in the legal sector is incre- site to verify property details and Legal AI is currently pointed at bankruptcy practice. “We believe question in the same way as a or deny ROSS’s interpretation of ty potential of new, smart technolo- mentally disruptive and its impact collates the results in a spreadsheet. specific tasks. This is because the AI that emerging technologies like junior lawyer might consult an the question. Every time a user gies, with an increased emphasis on should not be underestimated. So should lawyers worry about engine is trained to identify specif- cognitive computing and other experienced colleague. ROSS interacts with ROSS, it becomes cross-disciplinary engineering and “Law firms sticking to a traditional being replaced by robots? Bob ic data points and learn from user forms of machine-learning can then reads through the law smarter.” ROSS is accessed as an scientific skills and the ability to model may find themselves disrupt- Craig, chief information officer at feedback. As Mr Waisberg explains, help enhance the services we and legal precedence, gathers online subscription service. adapt to a workplace that is staffed ed if they do not leverage the tech- BakerHostetler, does not think so. it took more than two years to devel- deliver to our clients,” says chief evidence, draws inferences and ROSS Intelligence was the first by people and machines,” says Mr nology,” concludes Alexander Duis- “ROSS is not a way to replace our op Kira’s due diligence software. information officer Bob Craig. returns an evidence-based answer. company backed by NextLaw Kresojevic, who is looking at how berg, partner at Bird & Bird. attorneys – it is a supplemental The growth of AI in legal is fuelled ROSS, developed by ROSS Although ROSS can be Labs, the innovation arm of AI can bring end-to-end efficiencies tool to help them move faster, learn by client demand. “AI is happen- Intelligence, fulfils a professional programmed to include voice international law firm Dentons. while considering the impact on IT Share this article online via faster and continually improve,” ing now and firms that act quickly governance of task-specific quick- raconteur.net says Mr Craig. will reap the benefits,” says legal win solutions. 206 XXXXLEGAL INNOVATION raconteur.net xx29 / xx06 / 2016xxxx RACONTEUR RACONTEUR 29xx / 06xx / 2016 xxxx raconteur.net LEGAL INNOVATIONXXXX 073

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NOT-SO NEW LEGAL SERVICES AT KID ON THE EY TO COMPLEMENT BLOCK IS OTHER SERVICES EY is harnessing innovative technology to deliver legal services ABOUT TO working side by side with its other business offerings COME OF AGE n the 18 months since EY was So how is EY’s offering different Blockchain – a global digital ledger – is set granted an ABS (alternative business and distinctive? As Mr Kellett Istructure) licence by the Solicitors explains: “We are multi-disciplinary to disrupt the digital scene Regulation Authority, its legal practice in the widest sense in that what we 1,700 in the UK has grown rapidly. As a new offer is a team of lawyers working lawyers already practice, it is looking to be at the on a truly integrated basis with other in the practice forefront of the technology revolution sector-focused professionals at EY, globally in 73 and to continue building on the be they accountants, consultants jurisdictions strengths of the wider EY business. or programmers. Source: EY rom artificial intelligence with fintech startups to discover Already the team has grown to “The firm already has an outstanding and robotics to 3D printing how best to exploit blockchain. EY is more than 50 people in the UK and reputation in financial services. The F and blockchain, technology is seeking to foster such co-operation has made some key lateral hires from ambition of my team is to further fundamentally changing the way through its Startup Challenge, City and US firms. enhance that reputation by building we do business. Blockchain, initially matching potential partners. “We have done what we set out to the leading financial regulatory 760 associated as being the technology do, which is to build a really strong practice, offering both traditional risk startups are that enabled the online currency TheDAO platform from which we can now and compliance, together with a more looking at bitcoin, has suddenly become the An example of how the technology grow. We have recruited a great team ‘holistic’ legal risk offering.” innovative uses latest buzzword in the growing tech is currently being used is TheDAO. of people already, many of whom are Mr Kellett has made a number of blockchain lexicon. Though the technology In contrast to a traditional leading industry names within their of significant hires to accelerate technology has been around for a while, the corporate entity, a DAO is a area,” says Phil Goodstone, head of law the growth of the financial services Source: now not-so-new kid on the block is decentralised autonomous in the UK. “Over the next five years we practice, including Matt Whalley from Blockchain Angels growing up and looks set to disrupt organisation in which software acts want to build a sizeable UK business BLP, Steven Francis from Baker & the digital scene. according to a set of rules encoded focused on some very specific areas of McKenzie and James Gee from Weil Blockchain started as technology on a blockchain. TheDAO is on the market.” Gotshal & Manges. the business that we already tap into, that was looking for a use, but now open-source computer programme EY plans to add significant scale to As well as financial services, EY has and we are determined to develop sectors ranging from financial that works like an investment the UK business by 2020, although EY also launched its legal technology further our culture of innovation in the services to the media, from betting club or funding platform. It exists emphasises that the numbers and time practice, appointing Richard Goold, team and embrace new technology.” to mining are showing a keen interest on ethereum, a decentralised frame are of secondary importance. formerly co-chairman of tech at So what impact are technologies in the distributed digital ledger. computer platform, with a built- “We have a very clear strategy. Gowling WLG, to lead the team. EY having on the development of the The technology is still a relatively in cryptocurrency – ether – which We have focused on building a multi- has also launched a mergers and practice? “While in many ways we are novel concept, and the legal and has a real-world value and can be disciplinary practice, integrating law acquisitions legal team focused still only at the beginning of this, we regulatory environment in which traded on exchanges. with the wider services EY offers, and on the North West and UK more are already seeing how technology it is destined to operate is, as yet, on some key sectors and markets. widely, following the appointment can enhance both our offerings to our unchartered. Richard Goold, head of What are the legal issues? Our absolute commitment is to of Paul Devitt and Richard Thomas clients and also to our people in terms tech law at EY, surveys the scene and Disruptive technologies, such as find and develop the right people, in Manchester. of how and where they work, whether answers some key questions: blockchain, are creating new ways and to embrace new and emerging Where the business focuses next, it is the ability to offer truly flexible of doing business. As with many technologies as we grow our business,” says Mr Goodstone, will depend on working to all of our teams, document What is blockchain? emerging technologies, the law says Mr Goodstone. getting the right talent to lead in automation to speed up delivery to The blockchain is a distributed, around it is playing catch-up. While other areas where EY is strong and clients, electronic document review global digital ledger that records you can easily and nimbly create a looking to build. software or contract management and tracks transactions. Put simply, new piece of software, international “We started by building out systems,” says Mr Goodstone. it is a method of recording data. law-making is not so nimble. But some core capabilities in areas such “But this is only scratching the You could think of it as the rails on anyone looking at using this type of The ambition is to as corporate, employment and surface. What really excites us is to which the train of data or payment technology needs to consider the legal commercial law. But we’ve been clear work out how we develop our services runs. The data is encrypted and elements from the outset of the design achieve continual, from the outset that we aren’t looking for the benefit of clients and our teams stored in blocks, in a chronological process. You will need to consider sustainable growth by to build a separate law firm within EY,” by embracing new technologies”. chain using algorithms. The ledger three broad categories – general a relentless focus on says Mr Goodstone. “Our focus has With the legal services market going is not stored in one place, but in a commercial law considerations, tax always been to have law work side by through a period of change, EY clearly distributed, open-source network implications and regulatory issues. At Privacy and cyber security: At the Regulation space” for startups and businesses together EY’s clients with technology clients and people – side with other areas of the business. aims to be a positive part of that change. of users’ computers worldwide, the moment there are no definitive moment the security of the blockchain The regulators in almost all sectors with new offerings to engage with it startups in order to address today’s and at the heart of this It’s about developing legal services that Globally the practice already has more which makes it impossible to hack answers to questions of compliance relies on the assumption that the will undoubtedly assess how in order to ensure compliance. business challenges in an exploratory complement EY’s existing services and than 1,700 lawyers in 73 jurisdictions and alter – at least for now. in this evolving space. Businesses will encrypted information is impossible to businesses using blockchain are Anyone looking at using and collaborative way. Following two will be technology sector teams, so clients ultimately have and emerging technologies will only need to address the issues, such as hack. But, as technology develops, this operating and take a view. Businesses this type of technology EYX and the EY Startup Challenge programmes in 2014 and 2015, and and innovation a single point of contact for all their enhance the abilities of the firm to Who is using it? ownership, trust and security and may not remain the case. Many clients too, even those that are unregulated, needs to consider the EYX is EY’s new internal cross-service one earlier this year in Berlin, it returns professional services.” offer a truly global service. Use of blockchain technology contract law that are thrown up, are looking at a walled-garden solution may need to turn their mind to the line innovation initiative, based at to London in September. The EY He is also clear that technology will As for what lies ahead for EY’s UK remains in its early stages, but many and seek advice on how to manage to cyber security, in which access to the regulatory implications of what legal elements from Second Home in London’s Shoreditch. Startup Challenge will provide a studio One of the sectors upon which be at the heart of the development legal team, Mr Goodstone concludes: businesses, led by the financial their risks. software system is limited and controlled they are doing on the blockchain. the outset of the It is a “workspace and cultural venue environment for clients to connect and EY has focused is financial services. of the business. “There is a huge “The ambition is to achieve continual, services sector, are experimenting Ownership: While most data by the carrier or service provider. But, if Given the global, public nature of for thinkers, makers, artists and collaborate with blockchain startups, As Matthew Kellett, head of law for focus across the whole of EY on sustainable growth by a relentless with it. According to Blockchain is owned or controlled by an security is breached and the identities the technology, the question of who design process entrepreneurs”. The aim is to help to explore blockchain technology financial services, explains: “Everything the opportunities that existing and focus on clients and people – and at Angels, a network of blockchain individual, an institution or a of parties involved in transactions are regulates it is difficult. It is likely that EY and its clients navigate and take and its potential to transform starts with building a client-centred, emerging technologies present for our the heart of this will be technology angel investors and venture regulator, which can enforce its revealed, it could create problems the issue will require cross-border advantage of disruption, to support businesses, and make innovations distinctive and differentiated offering.” clients, and how we deliver services to and innovation.” capitalists, which has just launched ownership rights, the information over privacy breaches. and cross-sector co-operation. The large role. And the UK financial innovation and realise the business real and tangible. The business, says Mr Kellett, our clients. The sense of energy from a Blockchain Startup Tracker, contained on the blockchain is Smart contracts: Blockchain UK government has signalled its regulator, the Financial Conduct value of key emerging technologies. seeks to “build on the deep sector the team to ensure law is at the heart Philip Goodstone and Matthew there are already more than 760 shared and the issue of ownership will enable “smart contracts” to be determination to drive the digital Authority, is proving to be one of EYX is also responsible for the next Richard Goold can be contacted understanding and relationships of this has been incredible.” Kellett can be contacted via e-mail startups looking at innovative uses. remains moot. Who is responsible executed. But what would be their agenda and to make the UK a global the most progressive regulators in iteration of the EY Startup Challenge via e-mail at [email protected] that the firm has, layering legal on Mr Kellett adds: “EY has a great at [email protected] and It is likely that traditional corporate for the information contained on status in law and how could their validity hub of the digital economy of which the fintech space. Its Regulatory – an intensive ten-week innovation or for further information to it, to create an integrated, multi- reputation for using tech solutions. [email protected] or for further organisations will seek to partner the ledger, its use and security? be challenged or enforced? blockchain will play an increasingly Sandbox initiative created a “safe programme designed to bring please visit ey.com/law disciplinary practice.” There’s a wealth of knowledge within information please visit ey.com/law 206 XXXXLEGAL INNOVATION raconteur.net xx29 / xx06 / 2016xxxx RACONTEUR RACONTEUR 29xx / 06xx / 2016 xxxx raconteur.net LEGAL INNOVATIONXXXX 073

COMMERCIAL FEATURE COMMERCIAL FEATURE

NOT-SO NEW LEGAL SERVICES AT KID ON THE EY TO COMPLEMENT BLOCK IS OTHER SERVICES EY is harnessing innovative technology to deliver legal services ABOUT TO working side by side with its other business offerings COME OF AGE n the 18 months since EY was So how is EY’s offering different Blockchain – a global digital ledger – is set granted an ABS (alternative business and distinctive? As Mr Kellett Istructure) licence by the Solicitors explains: “We are multi-disciplinary to disrupt the digital scene Regulation Authority, its legal practice in the widest sense in that what we 1,700 in the UK has grown rapidly. As a new offer is a team of lawyers working lawyers already practice, it is looking to be at the on a truly integrated basis with other in the practice forefront of the technology revolution sector-focused professionals at EY, globally in 73 and to continue building on the be they accountants, consultants jurisdictions strengths of the wider EY business. or programmers. Source: EY rom artificial intelligence with fintech startups to discover Already the team has grown to “The firm already has an outstanding and robotics to 3D printing how best to exploit blockchain. EY is more than 50 people in the UK and reputation in financial services. The F and blockchain, technology is seeking to foster such co-operation has made some key lateral hires from ambition of my team is to further fundamentally changing the way through its Startup Challenge, City and US firms. enhance that reputation by building we do business. Blockchain, initially matching potential partners. “We have done what we set out to the leading financial regulatory 760 associated as being the technology do, which is to build a really strong practice, offering both traditional risk startups are that enabled the online currency TheDAO platform from which we can now and compliance, together with a more looking at bitcoin, has suddenly become the An example of how the technology grow. We have recruited a great team ‘holistic’ legal risk offering.” innovative uses latest buzzword in the growing tech is currently being used is TheDAO. of people already, many of whom are Mr Kellett has made a number of blockchain lexicon. Though the technology In contrast to a traditional leading industry names within their of significant hires to accelerate technology has been around for a while, the corporate entity, a DAO is a area,” says Phil Goodstone, head of law the growth of the financial services Source: now not-so-new kid on the block is decentralised autonomous in the UK. “Over the next five years we practice, including Matt Whalley from Blockchain Angels growing up and looks set to disrupt organisation in which software acts want to build a sizeable UK business BLP, Steven Francis from Baker & the digital scene. according to a set of rules encoded focused on some very specific areas of McKenzie and James Gee from Weil Blockchain started as technology on a blockchain. TheDAO is on the market.” Gotshal & Manges. the business that we already tap into, that was looking for a use, but now open-source computer programme EY plans to add significant scale to As well as financial services, EY has and we are determined to develop sectors ranging from financial that works like an investment the UK business by 2020, although EY also launched its legal technology further our culture of innovation in the services to the media, from betting club or funding platform. It exists emphasises that the numbers and time practice, appointing Richard Goold, team and embrace new technology.” to mining are showing a keen interest on ethereum, a decentralised frame are of secondary importance. formerly co-chairman of tech at So what impact are technologies in the distributed digital ledger. computer platform, with a built- “We have a very clear strategy. Gowling WLG, to lead the team. EY having on the development of the The technology is still a relatively in cryptocurrency – ether – which We have focused on building a multi- has also launched a mergers and practice? “While in many ways we are novel concept, and the legal and has a real-world value and can be disciplinary practice, integrating law acquisitions legal team focused still only at the beginning of this, we regulatory environment in which traded on exchanges. with the wider services EY offers, and on the North West and UK more are already seeing how technology it is destined to operate is, as yet, on some key sectors and markets. widely, following the appointment can enhance both our offerings to our unchartered. Richard Goold, head of What are the legal issues? Our absolute commitment is to of Paul Devitt and Richard Thomas clients and also to our people in terms tech law at EY, surveys the scene and Disruptive technologies, such as find and develop the right people, in Manchester. of how and where they work, whether answers some key questions: blockchain, are creating new ways and to embrace new and emerging Where the business focuses next, it is the ability to offer truly flexible of doing business. As with many technologies as we grow our business,” says Mr Goodstone, will depend on working to all of our teams, document What is blockchain? emerging technologies, the law says Mr Goodstone. getting the right talent to lead in automation to speed up delivery to The blockchain is a distributed, around it is playing catch-up. While other areas where EY is strong and clients, electronic document review global digital ledger that records you can easily and nimbly create a looking to build. software or contract management and tracks transactions. Put simply, new piece of software, international “We started by building out systems,” says Mr Goodstone. it is a method of recording data. law-making is not so nimble. But some core capabilities in areas such “But this is only scratching the You could think of it as the rails on anyone looking at using this type of The ambition is to as corporate, employment and surface. What really excites us is to which the train of data or payment technology needs to consider the legal commercial law. But we’ve been clear work out how we develop our services runs. The data is encrypted and elements from the outset of the design achieve continual, from the outset that we aren’t looking for the benefit of clients and our teams stored in blocks, in a chronological process. You will need to consider sustainable growth by to build a separate law firm within EY,” by embracing new technologies”. chain using algorithms. The ledger three broad categories – general a relentless focus on says Mr Goodstone. “Our focus has With the legal services market going is not stored in one place, but in a commercial law considerations, tax always been to have law work side by through a period of change, EY clearly distributed, open-source network implications and regulatory issues. At Privacy and cyber security: At the Regulation space” for startups and businesses together EY’s clients with technology clients and people – side with other areas of the business. aims to be a positive part of that change. of users’ computers worldwide, the moment there are no definitive moment the security of the blockchain The regulators in almost all sectors with new offerings to engage with it startups in order to address today’s and at the heart of this It’s about developing legal services that Globally the practice already has more which makes it impossible to hack answers to questions of compliance relies on the assumption that the will undoubtedly assess how in order to ensure compliance. business challenges in an exploratory complement EY’s existing services and than 1,700 lawyers in 73 jurisdictions and alter – at least for now. in this evolving space. Businesses will encrypted information is impossible to businesses using blockchain are Anyone looking at using and collaborative way. Following two will be technology sector teams, so clients ultimately have and emerging technologies will only need to address the issues, such as hack. But, as technology develops, this operating and take a view. Businesses this type of technology EYX and the EY Startup Challenge programmes in 2014 and 2015, and and innovation a single point of contact for all their enhance the abilities of the firm to Who is using it? ownership, trust and security and may not remain the case. Many clients too, even those that are unregulated, needs to consider the EYX is EY’s new internal cross-service one earlier this year in Berlin, it returns professional services.” offer a truly global service. Use of blockchain technology contract law that are thrown up, are looking at a walled-garden solution may need to turn their mind to the line innovation initiative, based at to London in September. The EY He is also clear that technology will As for what lies ahead for EY’s UK remains in its early stages, but many and seek advice on how to manage to cyber security, in which access to the regulatory implications of what legal elements from Second Home in London’s Shoreditch. Startup Challenge will provide a studio One of the sectors upon which be at the heart of the development legal team, Mr Goodstone concludes: businesses, led by the financial their risks. software system is limited and controlled they are doing on the blockchain. the outset of the It is a “workspace and cultural venue environment for clients to connect and EY has focused is financial services. of the business. “There is a huge “The ambition is to achieve continual, services sector, are experimenting Ownership: While most data by the carrier or service provider. But, if Given the global, public nature of for thinkers, makers, artists and collaborate with blockchain startups, As Matthew Kellett, head of law for focus across the whole of EY on sustainable growth by a relentless with it. According to Blockchain is owned or controlled by an security is breached and the identities the technology, the question of who design process entrepreneurs”. The aim is to help to explore blockchain technology financial services, explains: “Everything the opportunities that existing and focus on clients and people – and at Angels, a network of blockchain individual, an institution or a of parties involved in transactions are regulates it is difficult. It is likely that EY and its clients navigate and take and its potential to transform starts with building a client-centred, emerging technologies present for our the heart of this will be technology angel investors and venture regulator, which can enforce its revealed, it could create problems the issue will require cross-border advantage of disruption, to support businesses, and make innovations distinctive and differentiated offering.” clients, and how we deliver services to and innovation.” capitalists, which has just launched ownership rights, the information over privacy breaches. and cross-sector co-operation. The large role. And the UK financial innovation and realise the business real and tangible. The business, says Mr Kellett, our clients. The sense of energy from a Blockchain Startup Tracker, contained on the blockchain is Smart contracts: Blockchain UK government has signalled its regulator, the Financial Conduct value of key emerging technologies. seeks to “build on the deep sector the team to ensure law is at the heart Philip Goodstone and Matthew there are already more than 760 shared and the issue of ownership will enable “smart contracts” to be determination to drive the digital Authority, is proving to be one of EYX is also responsible for the next Richard Goold can be contacted understanding and relationships of this has been incredible.” Kellett can be contacted via e-mail startups looking at innovative uses. remains moot. Who is responsible executed. But what would be their agenda and to make the UK a global the most progressive regulators in iteration of the EY Startup Challenge via e-mail at [email protected] that the firm has, layering legal on Mr Kellett adds: “EY has a great at [email protected] and It is likely that traditional corporate for the information contained on status in law and how could their validity hub of the digital economy of which the fintech space. Its Regulatory – an intensive ten-week innovation or for further information to it, to create an integrated, multi- reputation for using tech solutions. [email protected] or for further organisations will seek to partner the ledger, its use and security? be challenged or enforced? blockchain will play an increasingly Sandbox initiative created a “safe programme designed to bring please visit ey.com/law disciplinary practice.” There’s a wealth of knowledge within information please visit ey.com/law 1 XXXX 08raconteur.netLEGAL INNOVATION xx xx xxxx raconteur.netRACONTEUR 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 09

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Collaboration is also emerging as any innovation in the legal sector

Getty Images a feature of legal innovation and needs to revolve around improving delivering successful outcomes for client service. clients, with the more progressive Francis George, managing direc- Lawyers must law firms developing stronger col- tor of Francis George Solicitor-Ad- laboration relationships with oth- vocate, says: “Free legal resources er law firms and alternative legal on the internet inevitably mean that service providers as a means of be- clients will have ‘Googled’ you and 27 deliver better ing more effective and efficient in formed their own view of the advice their approach. you will give before you have even “Law firms are innovating in the given it. way they resource work, includ- “They will shop around. Those who client service ing using their own captives, legal focus on and emphasise quality can 200% NET process outsourcing and flexible maintain profitability if they provide GROWTH resourcing models. They are de- excellent customer satisfaction. In Tech-savvy clients in a fast-moving DATA HEADLINE veloping complimentary non-legal this ultra-competitive market, su- SUBHEADLINE services in areas like risk, project perlative customer service and satis- digital age are becoming increasingly management and resourcing. They faction can be a unique selling point. are also developing pricing models Those whose prime focus is customer discerning of their legal advisers, and methods that provide certain- satisfaction, having managed client ty or at least predictability,” says expectations, will survive. Those but will pay for quality if it is delivered Mr Pester. who do not will fail.” Virtually every business sector MANAGING MARKETING in a way they can understand is being disrupted by digital tech- Share this article online via nology and law is no exception. raconteur.net However, most experts agree that With competition for market share in the legal industry intensifying, law fi rms need to look beyond word-of-mouth and positive referrals to become the obvious FUTURE CLIENT FIVE WAYS TO IMPROVE CLIENT RELATIONSHIPS choice for new clients. Karla Alexander at Propero Partners, a leading London- ALISON COLEMAN of firms plan to invest in IT in 2016 to improve their efficiency and com- based digital marketing consultancy, looks at what steps should be taken to petitive edge. s a profession, the law has However, in embracing this cus- “It is all about providing a choice,” best resourced, to how technology And it is important to keep in mind 01 “Law firms should go paperless as soon as possible generate new business inquiries and future-proof profi tability never been the fastest tomer-driven transformation, they says Jonathan Sharp, partner at can help deliver.” that technology will never replace and as much as possible,” says The Link App’s Lauren Riley. to embrace change, but face many challenges, largely con- law firm Royds. “Rather than tele- Clients are also more discerning the skills of a good lawyer. Cases “Think how much you dislike having piles of paper around Awith technology shaking cerning their decision-making pro- phoning, it may be easier to talk to about cost and what they will pay need to be handled by the right per- your office and multiply that by a factor of ten for a client up this last bastion of convention, cesses, says Lauren Riley, founder someone via instant messaging or a premium for based on the risk or son and, for the client, this needs to in their home.” even the most traditional practices and chief executive of The Link App, web chat.” value to their business. Price is no be at the right price. recognise they have to move with a tool that helps UK law firms im- The use of social media to commu- longer aligned to the time or com- Patrick Allen, senior partner at the times. prove customer service, efficiency nicate and promote legal services plexity of work, which are the fac- Hodge Jones & Allen, says: “Clients Behind this transformation is a and productivity. has also risen. He adds: “We have tors that lawyers have traditionally appreciate clear cost estimates in new breed of client, more tech sav- She says: “Decisions tend to be seen an increase in the number of used to price work. They also expect advance and monthly billing. How- 02 “Introducing a bring-your- 03 Billing by the hour is at odds with the irst movers in traditional sectors including those in the legal industry, a “We know that a lot of partners in law vy, more discerning and far more made by those who have been prac- prospective clients communicating greater flexibility around supplying ever, sensible clients don’t want the own-device policy will enable law firms notion that technology drives efficiency. “If like law have been using the last leading edge. A lot of their work is with fi rms do not want to be salespeople, so demanding of their law firms. Ac- tising the same way for many years to us via LinkedIn. As a cutting-edge ad hoc advice without charge. cheapest service, they want the best to support devices of choice for both it takes a partner in a law firm seven hours to Fdecade to rewrite the rule books. large local high street fi rms and smaller our role is to act as a sales function for customed to high levels of customer and can be resistant to change or, law firm, we use social media to service. They appreciate quality and employees and clients, and deliver a type a legal document that can be processed Where reputation and relationships regional fi rms that have fallen behind in them, freeing them up to do what they satisfaction in other sectors, they worst-case scenario, unaware of the communicate with our clients, for will pay your fees happily if you are consistent user in minutes by intelligent were once enough to attract and retain the digital stakes and are starting to feel do best – the law,” says Mr Noble. are forcing a change in legal servic- needs of their clients when it comes example, promoting newsletters the right person for the job. That’s experience via software, the challenge new business, they alone can no longer the pressure. In the last year since Propero Partners es, and regardless of their ability to to technology.” and blogs over Twitter.” why reputation and referral are vital home phone, is for the firm to adapt guarantee long-term success. Mr Noble says: “Some of these fi rms was launched, the feedback from practise the law, firms that fail to A key area of change lies in Innovation is not just about im- for winning new clients.” office phone or its business model,” This tipping point has been felt across don’t even have a web presence, which clients has been very positive and for respond and deliver on customer ex- communications, with clients in- plementing the latest technology. The process of Another driver of legal innovation, mobile device,” says Darren Saunders, the industry, with The Lawyer noting that means they’re not showing up where good reason. Signifi cant outcomes for perience risk losing their business. creasingly expecting to be able to True transformation comes from delivering work both from the client’s and law firm’s says Royds’ legal client director as much as 75 per cent of UK 200 law potential clients are looking for them. clients have included a halving of their The sector has made its intentions contact partners whenever and how technology is used to deliver an perspective, is the fact that the mil- Jonathan Sharp. at technology firm should be as much Trustmarque. fi rms could disappear within fi ve years if This puts them at a huge disadvantage. general costs of dealing with inquiries, a clear. According to PwC’s 2015 An- wherever they are, on the device of efficient service that meets clients’ part of the law firm lennial generation of employees, they fail to make their processes more “Our fi rst fi x is to create an online doubling of revenue and, in some cases, nual Law Firms’ Survey, 95 per cent their choice. needs. According to David Pester, those born between 1980 and 2000, e‡ cient. That suggests a reluctance to brand impression that resonates with their net profi ts. managing partner at law firm TLT, psyche today as is coming of age. move with the times could have a fatal their target audience. From there we Resisting the change that is sweeping the starting point for law firms is to the law itself “Older millennials are now hold- impact on the future of smaller fi rms. can help them implement and manage the legal sector is the surest way for a CLIENT FEEDBACK be systematic in the way they listen ing senior positions within the le- 04 Clients must be able to 05 “Listen more,” says Paul Lewis, It is a scenario that James their wider communication platforms, law fi rm to fail because the changes are and respond to the challenges their gal and corporate worlds,” says Rob rely on their law firms’ information innovation partner at Linklaters. “If Noble, partner at digital marketing such as social media, to ultimately being driven by the customers. clients face Jones, managing legal consultant at security practices. Recent headlines technology can help us organise this consultancy Propero Partners, has equip them with the tools they need to “Even if you are given a referral for 34% He says: “Today’s clients are in Mr Pester says: “They expect legal e-discovery provider Kroll Ontrack. involving law firms, including the better or provide different ways of already envisioned. He says: “Digital provide a service that is in tune with the a good law fi rm, the chances are you the driving seat when it comes to advice to be delivered in the most “Having grown up with exposure to Panama Papers data breach, have feeding back, then that would be of transformation is happening in the modern digital age. will still Google them to fi nd out more of law firm inquirers who left relationships with their lawyers, effective way. Good lawyers must a tremendous amount of dynamic dented confidence, great benefit to a message did not receive a but also created client and law firm legal sector, there is no escaping it, and “Where we see the real, measurable about them,” says Mr Noble. “And we call back within 24 hours which is as it should be. They ex- build multi-disciplinary teams and change, particularly in the technol- having resisted change, these fi rms are results, however, is in proactively fi nding also know that digital communication pect much more than traditional draw on expertise in areas such as ogy arena, these young power bro- an opportunity for relationships. But now recognising they need to up their and engaging customers for these channels – social media and instant legal advice, and they look to their project management, technology kers are not only open to technolog- law firms to market the key point is to game in order to remain competitive. fi rms. We attract good-quality leads, we messaging – are increasingly becoming 25% lawyers as true partners and con- and resourcing to deliver the best ical solutions, but expect the most their security listen, to assimilate Reputation used to be enough, but not initiate conversations and we hand the the channels of choice for customers.” sultants, able to bring a wide range outcome for the client. The process modern, most innovative and slick credentials. and to learn.” any longer.” fi rms the inquiries we’ve generated to If they are to remain competitive, law would not contact of expertise to the table to deliver a of delivering work should be as solutions to achieve the best advan- Founded by a team of professionals close into sales.” fi rms must fi nd a way to keep up with the firm again successful outcome. This can cov- much part of the law firm psyche to- tages possible and to conclude mat- with a wealth of industry experience, What Propero Partners has been the ongoing change and it is specialists er everything from how the work is day as the law itself.” ters as swiftly as possible.” Propero Partners specialises in quick to recognise is that, in many of such as Propero Partners that can providing end-to-end strategic these fi rms, their key focus has been support them along the way. % marketing campaigns that give fi rms, on providing high-quality legal services. Mr Noble concludes: “Marketing is 44 a sector with a lot of players, but what felt they would not be di˜ erentiates us is the extent of our encouraged to contact the business again ‘ ‘ ‘ ofof lawof law law firms firms firms could could could disappear disappe disappearar within within within industry knowledge and experience that %%%fivefivefive years ye yearsars if ifthey ifthey they fail fail failto to make to mak make etheir their their enables us to help fi rms with business processesprocprocessesesses more more more eicient.’ e icient eicient.’.’ growth and development, and the % fact that everything we do is end-to- 65 757575 Source:SourSource:ce The: The LawyerThe Lawyer Lawyer end and, most importantly, tied to the of solicitors took the contact strategic objective of our client. details of the potential “With our help they will generate a customer from a walk-in inquiry steady stream of new clients, achieve consistent business growth and be seen as a leader in their niche, who stands out 15.6% from the competition.” of firms followed up that inquiry YearYeYearar 1 1 1 Year 2 YearYeYearar 3 3Y 3 YeareYearar 4 4Y 4 YeareYearar 5 5 5 For more information please visit 75%75% of75% UK of UK200 of UK200 Law 200 Law Firms Law Firms Firms www.properopartners.com Source: Peppermint Technology 2016 1 XXXX 08raconteur.netLEGAL INNOVATION xx xx xxxx raconteur.netRACONTEUR 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 09

COMMERCIALCOMMERCIAL FEATURE FEATURE

Collaboration is also emerging as any innovation in the legal sector

Getty Images a feature of legal innovation and needs to revolve around improving delivering successful outcomes for client service. clients, with the more progressive Francis George, managing direc- Lawyers must law firms developing stronger col- tor of Francis George Solicitor-Ad- laboration relationships with oth- vocate, says: “Free legal resources er law firms and alternative legal on the internet inevitably mean that service providers as a means of be- clients will have ‘Googled’ you and 27 deliver better ing more effective and efficient in formed their own view of the advice their approach. you will give before you have even “Law firms are innovating in the given it. way they resource work, includ- “They will shop around. Those who client service ing using their own captives, legal focus on and emphasise quality can 200% NET process outsourcing and flexible maintain profitability if they provide GROWTH resourcing models. They are de- excellent customer satisfaction. In Tech-savvy clients in a fast-moving DATA HEADLINE veloping complimentary non-legal this ultra-competitive market, su- SUBHEADLINE services in areas like risk, project perlative customer service and satis- digital age are becoming increasingly management and resourcing. They faction can be a unique selling point. are also developing pricing models Those whose prime focus is customer discerning of their legal advisers, and methods that provide certain- satisfaction, having managed client ty or at least predictability,” says expectations, will survive. Those but will pay for quality if it is delivered Mr Pester. who do not will fail.” Virtually every business sector MANAGING MARKETING in a way they can understand is being disrupted by digital tech- Share this article online via nology and law is no exception. raconteur.net However, most experts agree that With competition for market share in the legal industry intensifying, law fi rms need to look beyond word-of-mouth and positive referrals to become the obvious FUTURE CLIENT FIVE WAYS TO IMPROVE CLIENT RELATIONSHIPS choice for new clients. Karla Alexander at Propero Partners, a leading London- ALISON COLEMAN of firms plan to invest in IT in 2016 to improve their efficiency and com- based digital marketing consultancy, looks at what steps should be taken to petitive edge. s a profession, the law has However, in embracing this cus- “It is all about providing a choice,” best resourced, to how technology And it is important to keep in mind 01 “Law firms should go paperless as soon as possible generate new business inquiries and future-proof profi tability never been the fastest tomer-driven transformation, they says Jonathan Sharp, partner at can help deliver.” that technology will never replace and as much as possible,” says The Link App’s Lauren Riley. to embrace change, but face many challenges, largely con- law firm Royds. “Rather than tele- Clients are also more discerning the skills of a good lawyer. Cases “Think how much you dislike having piles of paper around Awith technology shaking cerning their decision-making pro- phoning, it may be easier to talk to about cost and what they will pay need to be handled by the right per- your office and multiply that by a factor of ten for a client up this last bastion of convention, cesses, says Lauren Riley, founder someone via instant messaging or a premium for based on the risk or son and, for the client, this needs to in their home.” even the most traditional practices and chief executive of The Link App, web chat.” value to their business. Price is no be at the right price. recognise they have to move with a tool that helps UK law firms im- The use of social media to commu- longer aligned to the time or com- Patrick Allen, senior partner at the times. prove customer service, efficiency nicate and promote legal services plexity of work, which are the fac- Hodge Jones & Allen, says: “Clients Behind this transformation is a and productivity. has also risen. He adds: “We have tors that lawyers have traditionally appreciate clear cost estimates in new breed of client, more tech sav- She says: “Decisions tend to be seen an increase in the number of used to price work. They also expect advance and monthly billing. How- 02 “Introducing a bring-your- 03 Billing by the hour is at odds with the irst movers in traditional sectors including those in the legal industry, a “We know that a lot of partners in law vy, more discerning and far more made by those who have been prac- prospective clients communicating greater flexibility around supplying ever, sensible clients don’t want the own-device policy will enable law firms notion that technology drives efficiency. “If like law have been using the last leading edge. A lot of their work is with fi rms do not want to be salespeople, so demanding of their law firms. Ac- tising the same way for many years to us via LinkedIn. As a cutting-edge ad hoc advice without charge. cheapest service, they want the best to support devices of choice for both it takes a partner in a law firm seven hours to Fdecade to rewrite the rule books. large local high street fi rms and smaller our role is to act as a sales function for customed to high levels of customer and can be resistant to change or, law firm, we use social media to service. They appreciate quality and employees and clients, and deliver a type a legal document that can be processed Where reputation and relationships regional fi rms that have fallen behind in them, freeing them up to do what they satisfaction in other sectors, they worst-case scenario, unaware of the communicate with our clients, for will pay your fees happily if you are consistent user in minutes by intelligent were once enough to attract and retain the digital stakes and are starting to feel do best – the law,” says Mr Noble. are forcing a change in legal servic- needs of their clients when it comes example, promoting newsletters the right person for the job. That’s experience via software, the challenge new business, they alone can no longer the pressure. In the last year since Propero Partners es, and regardless of their ability to to technology.” and blogs over Twitter.” why reputation and referral are vital home phone, is for the firm to adapt guarantee long-term success. Mr Noble says: “Some of these fi rms was launched, the feedback from practise the law, firms that fail to A key area of change lies in Innovation is not just about im- for winning new clients.” office phone or its business model,” This tipping point has been felt across don’t even have a web presence, which clients has been very positive and for respond and deliver on customer ex- communications, with clients in- plementing the latest technology. The process of Another driver of legal innovation, mobile device,” says Darren Saunders, the industry, with The Lawyer noting that means they’re not showing up where good reason. Signifi cant outcomes for perience risk losing their business. creasingly expecting to be able to True transformation comes from delivering work both from the client’s and law firm’s says Royds’ legal client director as much as 75 per cent of UK 200 law potential clients are looking for them. clients have included a halving of their The sector has made its intentions contact partners whenever and how technology is used to deliver an perspective, is the fact that the mil- Jonathan Sharp. at technology firm should be as much Trustmarque. fi rms could disappear within fi ve years if This puts them at a huge disadvantage. general costs of dealing with inquiries, a clear. According to PwC’s 2015 An- wherever they are, on the device of efficient service that meets clients’ part of the law firm lennial generation of employees, they fail to make their processes more “Our fi rst fi x is to create an online doubling of revenue and, in some cases, nual Law Firms’ Survey, 95 per cent their choice. needs. According to David Pester, those born between 1980 and 2000, e‡ cient. That suggests a reluctance to brand impression that resonates with their net profi ts. managing partner at law firm TLT, psyche today as is coming of age. move with the times could have a fatal their target audience. From there we Resisting the change that is sweeping the starting point for law firms is to the law itself “Older millennials are now hold- impact on the future of smaller fi rms. can help them implement and manage the legal sector is the surest way for a CLIENT FEEDBACK be systematic in the way they listen ing senior positions within the le- 04 Clients must be able to 05 “Listen more,” says Paul Lewis, It is a scenario that James their wider communication platforms, law fi rm to fail because the changes are and respond to the challenges their gal and corporate worlds,” says Rob rely on their law firms’ information innovation partner at Linklaters. “If Noble, partner at digital marketing such as social media, to ultimately being driven by the customers. clients face Jones, managing legal consultant at security practices. Recent headlines technology can help us organise this consultancy Propero Partners, has equip them with the tools they need to “Even if you are given a referral for 34% He says: “Today’s clients are in Mr Pester says: “They expect legal e-discovery provider Kroll Ontrack. involving law firms, including the better or provide different ways of already envisioned. He says: “Digital provide a service that is in tune with the a good law fi rm, the chances are you the driving seat when it comes to advice to be delivered in the most “Having grown up with exposure to Panama Papers data breach, have feeding back, then that would be of transformation is happening in the modern digital age. will still Google them to fi nd out more of law firm inquirers who left relationships with their lawyers, effective way. Good lawyers must a tremendous amount of dynamic dented confidence, great benefit to a message did not receive a but also created client and law firm legal sector, there is no escaping it, and “Where we see the real, measurable about them,” says Mr Noble. “And we call back within 24 hours which is as it should be. They ex- build multi-disciplinary teams and change, particularly in the technol- having resisted change, these fi rms are results, however, is in proactively fi nding also know that digital communication pect much more than traditional draw on expertise in areas such as ogy arena, these young power bro- an opportunity for relationships. But now recognising they need to up their and engaging customers for these channels – social media and instant legal advice, and they look to their project management, technology kers are not only open to technolog- law firms to market the key point is to game in order to remain competitive. fi rms. We attract good-quality leads, we messaging – are increasingly becoming 25% lawyers as true partners and con- and resourcing to deliver the best ical solutions, but expect the most their security listen, to assimilate Reputation used to be enough, but not initiate conversations and we hand the the channels of choice for customers.” sultants, able to bring a wide range outcome for the client. The process modern, most innovative and slick credentials. and to learn.” any longer.” fi rms the inquiries we’ve generated to If they are to remain competitive, law would not contact of expertise to the table to deliver a of delivering work should be as solutions to achieve the best advan- Founded by a team of professionals close into sales.” fi rms must fi nd a way to keep up with the firm again successful outcome. This can cov- much part of the law firm psyche to- tages possible and to conclude mat- with a wealth of industry experience, What Propero Partners has been the ongoing change and it is specialists er everything from how the work is day as the law itself.” ters as swiftly as possible.” Propero Partners specialises in quick to recognise is that, in many of such as Propero Partners that can providing end-to-end strategic these fi rms, their key focus has been support them along the way. % marketing campaigns that give fi rms, on providing high-quality legal services. Mr Noble concludes: “Marketing is 44 a sector with a lot of players, but what felt they would not be di˜ erentiates us is the extent of our encouraged to contact the business again ‘ ‘ ‘ ofof lawof law law firms firms firms could could could disappear disappe disappearar within within within industry knowledge and experience that %%%fivefivefive years ye yearsars if ifthey ifthey they fail fail failto to make to mak make etheir their their enables us to help fi rms with business processesprocprocessesesses more more more eicient.’ e icient eicient.’.’ growth and development, and the % fact that everything we do is end-to- 65 757575 Source:SourSource:ce The: The LawyerThe Lawyer Lawyer end and, most importantly, tied to the of solicitors took the contact strategic objective of our client. details of the potential “With our help they will generate a customer from a walk-in inquiry steady stream of new clients, achieve consistent business growth and be seen as a leader in their niche, who stands out 15.6% from the competition.” of firms followed up that inquiry YearYeYearar 1 1 1 Year 2 YearYeYearar 3 3Y 3 YeareYearar 4 4Y 4 YeareYearar 5 5 5 For more information please visit 75%75% of75% UK of UK200 of UK200 Law 200 Law Firms Law Firms Firms www.properopartners.com Source: Peppermint Technology 2016 10 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 11 Now law firms must adapt and get down to real business Implementing management efficiencies may seem daunting, but law firms have much to gain, not least growth and profits, from a more “professional” approach to business

BUSINESS OF LAW in offices for a signing ceremony EXTERNAL PRESSURES ON WHY ISN’T YOUR LAW FIRM DOING MORE TO SIGNIFICANT CHALLENGES CHARLES ORTON-JONES on paper. Instead, participants use LAW FIRMS TO CHANGE CHANGE THE WAY IT DELIVERS SERVICES? FOR LAW FIRMS Strongly agree Slightly agree a mobile, laptop or tablet to au- Source: Deloitte 2016 Source: Altman Weil 2015 Source: Altman Weil 2015 thenticate documents. 10% 20% 30% 40% 50% organisational capacity No identified problems awyers are good at law. Mark Nuttall, a finance partner at No economic pressure Partners resist most with delivery model presently is enough to motivate change We’ve already done done already We’ve What we are doing doing are we What It’s what they study, prac- Linklaters in London, says: “Com- do to intend we all Continuing demands of We lack time or or time We lack

tise and love. But it’s not pleting a signing in the tradition- change efforts compliance regulations Clients aren’t aren’t Clients

enough. To run a success- al way can be a lengthy process, asking for it L AUTOMATION & ful practice lawyers need to be whereas through mobile technolo- OUTSOURCING great at marketing, management gy, with the click of a mouse or the Attracting new clients and financial planning as well as tap of a tablet or smartphone, it can

technology. Here is where the pro- be reduced to minutes, while main- INNOVATION Keeping working practices fession struggles. taining the formality and security ALTERNATIVE and systems up to date So what are the best ways law of signing. BUSINESS USE OF TECHNOLOGY STRUCTURES firms can rethink how they run “We hit upon the idea of observ- 10% their operation? Surely even the ing how electronic signatures are Keeping up to date with changes in the law slickest outfit could find something commonly used for thousands of 20% new to implement. transactions in the rental market. GLOBALISATION Mobile apps are becoming main- It was clearly applicable to our OM EMPL 60% Retaining clients/ FR OY S EE decline in client loyalty stream for time-logging and com- work and our business services E 30% R D U E munications. But how about a client team quickly turned the idea into S M

S A 50% app? A new product called The Link a reality.” E N R Increasing demand D App aims to change the way lawyers Other electronic signature apps P 40% for fixed fees S

,

communicate with clients. exist. For example, Brabners, based ACCESS TO C SECURITY 40%

INFORMATION L Designed by Lauren Riley, a solic- in north-west England, favours I

E Clients increasingly relying on S

itor who had a moment of fame ap- E-Sign, which uses QR codes rather N 50%

R

T internet for legal information

S O

pearing on TV’s The Apprentice, the than handwritten signatures. T

A 30%

C

N

A

app gives clients a quick way to show Management is one of the big de- D F

Increasing gap between working O L 60%

A T

H

progress made on a case. Notifica- bates in law. Do firms want lawyers N

E R practices/mindset of new and R E T

E X

tions appear when a case is updated. or managers? 20% longer-established lawyers REGULATION If a client wants to talk to a lawyer, Intellectual property specialist they enter a request via the app. Wynne-Jones IP has remodelled Increasing difficulty in getting the right level of professional The concept is designed to mini- itself on a managerial structure. 10% indemnity insurance mise annoying e-mails and phone Jayne Nation, Wynne-Jones’ busi- VALUE FOR MONEY

calls out of the blue for both parties. ness director, says most law firms GRADUATES The Link App is focused on basic hire project managers and market- Bad debts and cash flow issues

consumer services, such as prop- ing directors, but fail to give them data technologies big use to plans No litigation and cases of outcomes Predicting toaccess information quick for mining Data and analysis Competitive intelligence e-discovery for Predictive coding management analytics Business intelligence/firm data technologies big use to plans No REASONS LAW FIRMS DON’T INNOVATE erty, wills and family law. IWC Pro- authority to make decisions. EMPLOYEE DEMANDS bate Services has signed up, stating “At Wynne-Jones IP there are two Other Lack of managment support Source: Peppermint Technology 2015 that customers do indeed appreci- non-technical directors, both em- SKILLS & ate the app. ployees, who sit on the board and 26.5% 21% 14% 38.5% For internal case management have authority for operations, HR, Time/work pressures Funding constraints there is a huge variety of tools on marketing, business development QUALIFICATIONS offer. Wright Hassall emphatically and customer care. This frees up recommends Visualfiles produced the fee earners to do strategical- into areas such as marketing to in- Marketing offers light relief from The transition was like a military by LexisNexis. Martyn Wells, IT di- ly focused business development crease brand awareness.” Flexible the rigours of the law, especial- operation. Neil Davison, Farrer’s LAW FIRMS NOT FULLY TECHNOLOGY PURCHASES rector at Wright Hassall, explains: for the firm and fee-earning. This ACCEPTING OF CHANGE PLANNED IN THE SHORT TERM working, in particular, is a forte ly public relations. Lawyers often director of IT, says: “We put a pro- “It works like this. Every business is one of the main reasons that at Fletchers. So much so the firm enjoy giving their opinion on issues ject team together of 11 people that Source: International Legal Technologies 2015 process has a number of stages and Wynne-Jones IP has seen dou- How would you rate your partners’ level of adaptability to change? is one of the few law firms on The of the day, for legal journals or news- included partners, solicitors and Source: Deloitte 2016 each stage can be represented by ble-digit growth in recent years.” Sunday Times 100 Best Companies paper supplements in The Times. secretaries, who undertook a com- a milestone. The extreme version of this is an to Work For list. And yet many firms are pretty terri- prehensive review of document “Through the management report- alternative business structure (ABS). 25% MEDIAN Without a traditional equity ble at PR, says Melissa Davis, former management and ultimately choos- ing functionality within Visualfiles, Introduced in 2007, the ABS allows RATING partnership approach new think- head of media at the Law Society ing the technology they thought was the system is able to offer clear vis- non-lawyers to invest in and run ing can be brought to issues such and now managing director of MD the right fit for the firm – and that 20% ibility of the exact stage of every law firms. Traditional firms will find as profit-sharing. Signature Liti- Communications. was NetDocuments.” matter by milestone and, therefore, much to learn from the operation of gation is a new firm created with The problem? She identifies two The project took nine months

the billing value commensurate for these innovative practices. 15% a company-wide profit share in major flaws. “Lawyers will spend to complete, with a four-month every single piece of work at that For example, Fletchers Solici- NOT WILLING COMPLETELY OPEN TO mind. Founder Graham Huntley time honing the perfect statement, change-management programme point in time.” tors gained approval as an ABS in TO CHANGE AT ALL DOING THINGS DIFFERENTLY says: “The traditional partnership only to find that the story has kicking in after four months.

The benefits? Mr Wells continues: 2015, with Nigel Savage, the former 10% reserves all of the upside in good moved on and a quicker competi- Around 400 staff were given train- “Monthly billing estimates then chief executive of the University of years for the owners of the firm, tor was quoted,” she says. “Lawyers ing at formal workshops, backed up become a ‘matter of fact’ rather than Law, as a director. Chief executive the partners. The Signature model can also be held back by an unwill- by intensive sessions on the floor.

‘finger-in-the-air estimates’ and Ed Fletcher says: “Bringing in the 5% is better because it starts from the ingness to express a clear opinion The results mean Farrer’s staff can the practice leaders of departments expertise of an ‘outsider’ helps to proposition that everybody has a on one side of an argument, like access documents from any device have good insight into the pinch- increase diversity and gives a real direct financial interest in making the famous two-handed econo- in any location. Paper usage has 0% points in the departmental through- boost to the collective intelligence every year ‘good’. This generates mist.” Speed and clarity can give plummeted. Security is up and pro- 0 1 2 3 4 5 6 7 8 9 10 put. This approach is also a great aid of the company. high levels of productivity in the partners the edge when seeking ductivity has risen too. to ensuring clients are invoiced in “Professionals brought in from right way.” press coverage. Making changes to the way a firm a timely manner and that they pay other industries often approach LAW FIRMS IN TRANSITION A profit-sharing model may also And a final word for law firms is run won’t be easy. But when the their bills on time.” situations in a different way and induce non-legal specialists to stay hoping to change the way they rewards are so great and the penal- Do you think the pace of change in the legal profession will... Another snazzy bit of technol- can offer knowledge to help grow with a firm. When artificial intel- work. It takes time and effort. ties for falling behind so severe, it’s ogy is making document-signing a firm that is beyond the training ligence algorithms dominate case Just look at Farrer & Co, which worth taking the plunge. easier. Linklaters has adopted Do- or skillsets of a lawyer. For exam- management what model will at- after more than 300 years of pa- STAY THE SAME INCREASE cuSign to speed up the process. ple, they could provide expert as- tract top talent from Silicon Valley? per-based work opted to shift to 23.8% 72.4% Share this article online via The technology means lawyers and sistance with strategic direction Decrease Equity partnerships will need to re- a digital document management raconteur.net clients no longer need to stay late and growth or give skilled insight Not sure Source: Altman Weil 2015 flect on that question. system known as eFile. 10 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 11 Now law firms must adapt and get down to real business Implementing management efficiencies may seem daunting, but law firms have much to gain, not least growth and profits, from a more “professional” approach to business

BUSINESS OF LAW in offices for a signing ceremony EXTERNAL PRESSURES ON WHY ISN’T YOUR LAW FIRM DOING MORE TO SIGNIFICANT CHALLENGES CHARLES ORTON-JONES on paper. Instead, participants use LAW FIRMS TO CHANGE CHANGE THE WAY IT DELIVERS SERVICES? FOR LAW FIRMS Strongly agree Slightly agree a mobile, laptop or tablet to au- Source: Deloitte 2016 Source: Altman Weil 2015 Source: Altman Weil 2015 thenticate documents. 10% 20% 30% 40% 50% organisational capacity No identified problems awyers are good at law. Mark Nuttall, a finance partner at No economic pressure Partners resist most with delivery model presently is enough to motivate change We’ve already done done already We’ve What we are doing doing are we What It’s what they study, prac- Linklaters in London, says: “Com- do to intend we all Continuing demands of We lack time or or time We lack

tise and love. But it’s not pleting a signing in the tradition- change efforts compliance regulations Clients aren’t aren’t Clients

enough. To run a success- al way can be a lengthy process, asking for it L AUTOMATION & ful practice lawyers need to be whereas through mobile technolo- OUTSOURCING great at marketing, management gy, with the click of a mouse or the Attracting new clients and financial planning as well as tap of a tablet or smartphone, it can

technology. Here is where the pro- be reduced to minutes, while main- INNOVATION Keeping working practices fession struggles. taining the formality and security ALTERNATIVE and systems up to date So what are the best ways law of signing. BUSINESS USE OF TECHNOLOGY STRUCTURES firms can rethink how they run “We hit upon the idea of observ- 10% their operation? Surely even the ing how electronic signatures are Keeping up to date with changes in the law slickest outfit could find something commonly used for thousands of 20% new to implement. transactions in the rental market. GLOBALISATION Mobile apps are becoming main- It was clearly applicable to our OM EMPL 60% Retaining clients/ FR OY S EE decline in client loyalty stream for time-logging and com- work and our business services E 30% R D U E munications. But how about a client team quickly turned the idea into S M

S A 50% app? A new product called The Link a reality.” E N R Increasing demand D App aims to change the way lawyers Other electronic signature apps P 40% for fixed fees S

,

communicate with clients. exist. For example, Brabners, based ACCESS TO C SECURITY 40%

INFORMATION L Designed by Lauren Riley, a solic- in north-west England, favours I

E Clients increasingly relying on S

itor who had a moment of fame ap- E-Sign, which uses QR codes rather N 50%

R

T internet for legal information

S O

pearing on TV’s The Apprentice, the than handwritten signatures. T

A 30%

C

N

A

app gives clients a quick way to show Management is one of the big de- D F

Increasing gap between working O L 60%

A T

H

progress made on a case. Notifica- bates in law. Do firms want lawyers N

E R practices/mindset of new and R E T

E X

tions appear when a case is updated. or managers? 20% longer-established lawyers REGULATION If a client wants to talk to a lawyer, Intellectual property specialist they enter a request via the app. Wynne-Jones IP has remodelled Increasing difficulty in getting the right level of professional The concept is designed to mini- itself on a managerial structure. 10% indemnity insurance mise annoying e-mails and phone Jayne Nation, Wynne-Jones’ busi- VALUE FOR MONEY

calls out of the blue for both parties. ness director, says most law firms GRADUATES The Link App is focused on basic hire project managers and market- Bad debts and cash flow issues

consumer services, such as prop- ing directors, but fail to give them data technologies big use to plans No litigation and cases of outcomes Predicting toaccess information quick for mining Data and analysis Competitive intelligence e-discovery for Predictive coding management analytics Business intelligence/firm data technologies big use to plans No REASONS LAW FIRMS DON’T INNOVATE erty, wills and family law. IWC Pro- authority to make decisions. EMPLOYEE DEMANDS bate Services has signed up, stating “At Wynne-Jones IP there are two Other Lack of managment support Source: Peppermint Technology 2015 that customers do indeed appreci- non-technical directors, both em- SKILLS & ate the app. ployees, who sit on the board and 26.5% 21% 14% 38.5% For internal case management have authority for operations, HR, Time/work pressures Funding constraints there is a huge variety of tools on marketing, business development QUALIFICATIONS offer. Wright Hassall emphatically and customer care. This frees up recommends Visualfiles produced the fee earners to do strategical- into areas such as marketing to in- Marketing offers light relief from The transition was like a military by LexisNexis. Martyn Wells, IT di- ly focused business development crease brand awareness.” Flexible the rigours of the law, especial- operation. Neil Davison, Farrer’s LAW FIRMS NOT FULLY TECHNOLOGY PURCHASES rector at Wright Hassall, explains: for the firm and fee-earning. This ACCEPTING OF CHANGE PLANNED IN THE SHORT TERM working, in particular, is a forte ly public relations. Lawyers often director of IT, says: “We put a pro- “It works like this. Every business is one of the main reasons that at Fletchers. So much so the firm enjoy giving their opinion on issues ject team together of 11 people that Source: International Legal Technologies 2015 process has a number of stages and Wynne-Jones IP has seen dou- How would you rate your partners’ level of adaptability to change? is one of the few law firms on The of the day, for legal journals or news- included partners, solicitors and Source: Deloitte 2016 each stage can be represented by ble-digit growth in recent years.” Sunday Times 100 Best Companies paper supplements in The Times. secretaries, who undertook a com- a milestone. The extreme version of this is an to Work For list. And yet many firms are pretty terri- prehensive review of document “Through the management report- alternative business structure (ABS). 25% MEDIAN Without a traditional equity ble at PR, says Melissa Davis, former management and ultimately choos- ing functionality within Visualfiles, Introduced in 2007, the ABS allows RATING partnership approach new think- head of media at the Law Society ing the technology they thought was the system is able to offer clear vis- non-lawyers to invest in and run ing can be brought to issues such and now managing director of MD the right fit for the firm – and that 20% ibility of the exact stage of every law firms. Traditional firms will find as profit-sharing. Signature Liti- Communications. was NetDocuments.” matter by milestone and, therefore, much to learn from the operation of gation is a new firm created with The problem? She identifies two The project took nine months

the billing value commensurate for these innovative practices. 15% a company-wide profit share in major flaws. “Lawyers will spend to complete, with a four-month every single piece of work at that For example, Fletchers Solici- NOT WILLING COMPLETELY OPEN TO mind. Founder Graham Huntley time honing the perfect statement, change-management programme point in time.” tors gained approval as an ABS in TO CHANGE AT ALL DOING THINGS DIFFERENTLY says: “The traditional partnership only to find that the story has kicking in after four months.

The benefits? Mr Wells continues: 2015, with Nigel Savage, the former 10% reserves all of the upside in good moved on and a quicker competi- Around 400 staff were given train- “Monthly billing estimates then chief executive of the University of years for the owners of the firm, tor was quoted,” she says. “Lawyers ing at formal workshops, backed up become a ‘matter of fact’ rather than Law, as a director. Chief executive the partners. The Signature model can also be held back by an unwill- by intensive sessions on the floor.

‘finger-in-the-air estimates’ and Ed Fletcher says: “Bringing in the 5% is better because it starts from the ingness to express a clear opinion The results mean Farrer’s staff can the practice leaders of departments expertise of an ‘outsider’ helps to proposition that everybody has a on one side of an argument, like access documents from any device have good insight into the pinch- increase diversity and gives a real direct financial interest in making the famous two-handed econo- in any location. Paper usage has 0% points in the departmental through- boost to the collective intelligence every year ‘good’. This generates mist.” Speed and clarity can give plummeted. Security is up and pro- 0 1 2 3 4 5 6 7 8 9 10 put. This approach is also a great aid of the company. high levels of productivity in the partners the edge when seeking ductivity has risen too. to ensuring clients are invoiced in “Professionals brought in from right way.” press coverage. Making changes to the way a firm a timely manner and that they pay other industries often approach LAW FIRMS IN TRANSITION A profit-sharing model may also And a final word for law firms is run won’t be easy. But when the their bills on time.” situations in a different way and induce non-legal specialists to stay hoping to change the way they rewards are so great and the penal- Do you think the pace of change in the legal profession will... Another snazzy bit of technol- can offer knowledge to help grow with a firm. When artificial intel- work. It takes time and effort. ties for falling behind so severe, it’s ogy is making document-signing a firm that is beyond the training ligence algorithms dominate case Just look at Farrer & Co, which worth taking the plunge. easier. Linklaters has adopted Do- or skillsets of a lawyer. For exam- management what model will at- after more than 300 years of pa- STAY THE SAME INCREASE cuSign to speed up the process. ple, they could provide expert as- tract top talent from Silicon Valley? per-based work opted to shift to 23.8% 72.4% Share this article online via The technology means lawyers and sistance with strategic direction Decrease Equity partnerships will need to re- a digital document management raconteur.net clients no longer need to stay late and growth or give skilled insight Not sure Source: Altman Weil 2015 flect on that question. system known as eFile. RACONTEUR xx xx xxxx 12raconteur.netLEGAL INNOVATION raconteur.netXXXX 2 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 13

COMMERCIALCOMMERCIAL FEATURE FEATURE Countering hackers after clients’ secrets The revelation that a Russian hacker targeted elite UK and US law firms to steal mergers and acquisitions information for insider trading, coupled with the Panama Papers scandal, has put law firms’ data security under the magnifying glass

CYBER SECURITY Credits were there, but no one was paying any potential fallout. On the reg- FIVE TOP CYBER SECURITY TIPS GRANIA LANGDON-DOWN attention,” he says. ulatory front, the Solicitors Regu- One of the most common ways into a lation Authority expects firms to firm is via its suppliers, so it is critical contact the authority if there is a argeting the “trusted ad- to secure the supply chain. “We have breach of the code of conduct, such 01 Assume you may be targeted at some point viser” is becoming an in- tried to investigate breaches where as not keeping a client’s informa- so identify the greatest risks and likely attack points. creasingly common tactic clients haven’t had the right contracts tion confidential, and it will want Understand what sensitive client data you hold, encrypt among the hacking com- in place and the third party won’t let evidence that the breach has been when in transit across unprotected networks and minimise T the volume retained when it’s no longer required, says Simon munity, which is waking up to the us access their system,” says Mr Ham- dealt with and systems improved to fact that many law firms do not yet ilton. “That would be very embarrass- stop it happening again. Viney of Stroz Friedberg. ‘E-DISCLOSURE IS LIKE have good cyber defences despite ing for a law firm to get wrong.” At the ICO, Garreth Cameron, the value of the information they Allen & Overy’s Mr Jones says group manager for business and hold, and the extent of their client ideally firms should have a perfect industry, says there is currently no and office accounts. map between all the people who legal requirement to self-report a 02 Raising awareness across 03 Have a well-rehearsed plan so OXYGEN FOR BUSINESS’ Given the scale of attacks – cyber work for them and everyone who security breach involving person- the firm is probably the cheapest and you can quickly assess and contain the crime was included in the Office for is on their network. “But in large al data, though this will change most important step because so many problem. Then put out an informative National Statistics figures for the global organisations there are lots in 2018 with the EU regulations breaches involve people being caught message to clients before considering Epiq Systems’ eDisclosure dashboard DMX gives organisations the first time last year and is now offi- of joiners, movers, collaborators, which make reporting mandatory out by scams. If you are a general press release. Handle it cially the UK’s most common crimi- temporary contractors and leavers within 72 hours. attacked, investigate well and you can power to draw much greater insight from legal cases nal offence – it is not surprising that so you need to work closely with hu- Once a breach is reported, he says aggressively so limit reputational clients are increasingly checking man resources to make sure access the ICO will want to know any ag- you don’t get a fallout, says Alex that their law firms aren’t the weak is tightly monitored.” gravating or mitigating factors. reputation for being Cochrane of link in their security chain. There is certainly no silver bullet It has a team of technical experts a soft target, says Collyer Bristow. Mark Jones, Allen & Overy’s chief Panamanian law to mitigate cyber security threats, who know what to ask and any de- Benedict Hamilton firm Mossack Fon- information and security officer says Simon Viney, cyber resilience gree of recklessness or negligence of Kroll. seca was hacked in (CISO), has seen a 300 per cent in- director with risk management spe- will be reflected in the fine which May, leaking 11.5 crease in requests from clients for million documents cialists Stroz Friedberg. it will publicise widely. “In a com- assurances about the firm’s controls. While predictive technology and petitive market, if your clients “Major clients will send in their own Fonseca to leak the largest-ever promised link or is foolish enough people analytics are increasingly cannot trust you, you are lost,” 04 Firms should consider joining 05 You can know your vulnerabilities, he use of business intelligence issues, it will benefit from knowing you to collect the data and normalise IT people to audit our systems, with cache of 11.5 million documents, to log on to sensitive work systems helping organisations understand he warns. the Cyber Security Information identify potential adversaries, have is now widespread in many areas what the wider trends are,” says the spreadsheets, PowerPoints and some even carrying out their own wanted to trigger worldwide politi- on insecure wi-fi or personal devic- employee behaviour and identify But, however resilient you are, some Sharing Partnership, following the most gobsmackingly pure, cohesive of corporate life. A marketing Mr Elliott. “It needs to know which pdfs, and make it into one cohesive penetration testing,” he says. “The cal and business repercussions. es, he says. insider risks, firms need to build a attacks will succeed, so it is crucial to GCHQ’s Ten Steps to Cyber strategy and great relationships with T Security and acquiring the senior team, but you won’t team will use information such as organisations these claims regularly package that a lawyer can make sense number of questions clients are put- Sony was left embarrassed by the And he warns that the hackers’ culture of cyber resilience from the have a well-rehearsed crisis plan. click-through rates to gauge the come from, how many people are of,” says Mr Elliott. ting to us has also gone up by a third content of leaked e-mails, while tradecraft is becoming increasingly top down because absolute security “If you are attacked, the first Cyber Essentials perform to your success or otherwise of campaigns, typically involved and how many “You can start with what you on top of the hundreds they are al- an extortion hack demanding the clever. “Hacking is all about getting is unattainable. thing is to assess how bad the or Cyber Essentials best capability if you while sales teams can assess the documents they typically have to handed over to the other side and see ready asking.” infidelity website Ashley Madison a fingerhold and then escalating The scale of the risk means cyber damage is and then get informa- Plus certification, don’t have sufficient impact of individual people or give to the other side. trends within the case, backwards At the same time, the personal close down resulted in the exposure your privileges so you can hack into security can no longer just be man- tion out to those clients who are says Catherine resources, says promotions on takings. “It might hire three different and forward, which is not usually data protection landscape is chang- of millions of e-mail addresses. Big the computer at will,” says Mr Ham- aged as part of the IT function; it affected,” advises Alex Cochrane, Dixon of the Law Mark Jones of The legal sector, though, has been law firms to represent it across 20 possible. But the real potential is in ing. The Information Commission- corporates are mined for personal ilton. Phishing e-mails remain a needs leadership with real clout senior associate with Collyer Bris- Society. Allen & Overy. slow to make use of this kind of different cases, so which one is the picking up trends across cases so er’s Office (ICO) maximum fines of data to be sold to criminal gangs. favourite, but increasingly hackers across the firm and there is a move tow’s media and privacy team, “Be information. Yet the capability to do most efficient with that data? Which you can be more accurate with your £500,000 will pale in comparison New York security analysts at will research a target’s digital profile among bigger firms to take on dedi- upfront about what has happened, this exists, particularly in the area of collects the least data and which has budget and make strategic changes with the new European Union data Flashpoint, who revealed the Rus- for a way in. They may impersonate cated risk professionals. what you are doing and how you eDisclosure. Adi Elliott, vice president, the highest responsiveness rate in to be more efficient.” security regula- sian M&A hacking a partner’s e-mail and send a col- Mr Jones, who took over the newly will prevent it happening again – market planning, at Epiq Systems, terms of that data being relevant?” Currently, the legal sector is right tions, which come attempts, describe league a link to a draft marketing created role in February, previous- and apologise.” waters for insurers so premiums ment’s confidential Cyber Security gives the example of a corporation at the beginning of deploying such into force in 2018, a dark web where brochure wrapped around malware. ly worked as CISO for BAA Group Firms’ professional indemnity (PI) tend to be high. Anecdotal evidence Information Sharing Partnership, using an in-house legal team or hiring innovation, says Mr Elliott, but he with fines of up hackers are recruit- “You click on the link and I am Heathrow and as a provider of secu- insurers will also want to be kept in- indicates only a minority of larger are increasingly recognised as an a law firm to help with its litigation, believes deployment will pick up pace to 2 per cent of Cyber crime ed and forums ex- in your machine,” he says. One de- rity services including at the Lon- formed, given the potential for legal firms have taken it out so far. important line of defence. and deploying the services of an once awareness of the potential of global turnover or is now officially change counter-in- fence is to have a very good detec- don 2012 Olympics. and regulatory action. Against such a fast-moving back- What is clear in today’s informa- external organisation to assist with the We’re the first eDisclosure gets out. “It takes a really €10 million. telligence to outfox tion and response system with com- “We want the very best, but there is a Costs can escalate dramatically. ground, there is no one-response- tion world is that it is dangerous to data and process management. specific series of skillsets to do this and So do law firms the UK’s most law enforcers. petent staff looking out for warning shortfall of fully qualified people,” he While PI policies provide some cover fits-all option, but firms don’t have underestimate the magnitude of the organisation that is “Part of the disclosure process you have to have a few pieces in place need a wake-up common criminal But what all hack- signs. “Simple as that sounds, we says. “What I am pleased to do here is for third-party losses arising from to fight this alone. risk law firms face. is to figure out how to limit the really injecting business to properly solve this problem,” he says. call? PwC’s Annual offence ers want, whether spend a lot of time helping people help our people develop by sponsoring cyber attacks, they do not typical- The Law Society’s dedicated cyber corporation’s data to certain people intelligence into “We’re the first organisation that is Law Firms’ Survey they are state- develop that capacity because, on them through PhDs in cyber security.” ly cover first-party losses. There is security site has been viewed more Share this article online via within particular periods of time really injecting business intelligence into last year found 62 backed, highly or- some of the most destructive hacks Keeping on top of the challenges dedicated cyber insurance on the than 4,300 times already this year, raconteur.net so legal teams can look at those eDisclosure, but we want eDisclosure, but we want to promote per cent had suf- ganised criminals we have investigated, the alarms is critical because it will help limit market, but it is still unchartered while forums, such as the govern- documents and decide if they are to promote this because this because it’s a valuable process.” fered from a security incident, up or opportunists who have learnt relevant or privileged, before being In the longer term, Mr Elliott from 45 per cent in 2014. However, how to spoof an e-mail via a You- given to the other side,” he says. it’s a valuable process believes this kind of process will only 32 per cent felt very confident Tube clip, is to find the easiest route “Currently each one of those projects become standard practice for legal of their IT disaster recovery capabil- in and law firms make attractive is treated as a separate and distinct teams, in the same way that business ities and only 49 per cent of senior targets because their unique selling task, even though a corporation might Having this kind of information intelligence is used by other parts of management had participated in point is their people. be involved in very similar projects can help identify the most efficient organisations. “No marketing person relevant training. Benedict Hamilton, who leads hundreds of times a year.” and cost-effective law firms, he says, today would advertise for a campaign Attacks can come from any quarter Kroll’s Europe, Middle East and Af- There are often good reasons for as well as help organisations get a and not want to see A/B testing and so it is vital, says Mr Jones, to know rica business and cyber investiga- this, he adds, including the fact that better idea of how much such cases click-through rates, or to create “where your vulnerabilities are be- tions team, says about 90 per cent different people from the client should cost them, and identify any three different campaigns that are fore your enemy does and identify of losses of confidential information organisation or law firm may work potential underlying issues in the all radically different and not want to your main risks so you can work out are, deliberately or inadvertent- on particular cases, but the end business which could reduce the know which one is best,” he says. “It’s who your adversaries may be so you ly, by insiders – recently departed result is that businesses are unable number of cases in the first place. like oxygen for businesspeople and this can prioritise your response”. employees, people in the “circle of to identify any trends across cases or Using a system such as Epiq Systems’ will be the same for eDisclosure too.” Recent attacks show how hackers trust” such as sub-contractors or compare the services and efficiency eDisclosure dashboard DMX gives can blindside their targets. The self- disaffected partners. of different providers. organisations the power to draw much For more information about how styled “John Doe”, who exploited But many attacks succeed be- “If a business is sued 20 times a greater insight, both within individual Epiq Systems can help your business, weaknesses in the computer system cause a partner or employee has year around labour and employment cases and more generally. “It allows visit www.epiqsystems.co.uk at Panamanian law firm Mossack been tricked into clicking on a com- RACONTEUR xx xx xxxx 12raconteur.netLEGAL INNOVATION raconteur.netXXXX 2 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 13

COMMERCIALCOMMERCIAL FEATURE FEATURE Countering hackers after clients’ secrets The revelation that a Russian hacker targeted elite UK and US law firms to steal mergers and acquisitions information for insider trading, coupled with the Panama Papers scandal, has put law firms’ data security under the magnifying glass

CYBER SECURITY Credits were there, but no one was paying any potential fallout. On the reg- FIVE TOP CYBER SECURITY TIPS GRANIA LANGDON-DOWN attention,” he says. ulatory front, the Solicitors Regu- One of the most common ways into a lation Authority expects firms to firm is via its suppliers, so it is critical contact the authority if there is a argeting the “trusted ad- to secure the supply chain. “We have breach of the code of conduct, such 01 Assume you may be targeted at some point viser” is becoming an in- tried to investigate breaches where as not keeping a client’s informa- so identify the greatest risks and likely attack points. creasingly common tactic clients haven’t had the right contracts tion confidential, and it will want Understand what sensitive client data you hold, encrypt among the hacking com- in place and the third party won’t let evidence that the breach has been when in transit across unprotected networks and minimise T the volume retained when it’s no longer required, says Simon munity, which is waking up to the us access their system,” says Mr Ham- dealt with and systems improved to fact that many law firms do not yet ilton. “That would be very embarrass- stop it happening again. Viney of Stroz Friedberg. ‘E-DISCLOSURE IS LIKE have good cyber defences despite ing for a law firm to get wrong.” At the ICO, Garreth Cameron, the value of the information they Allen & Overy’s Mr Jones says group manager for business and hold, and the extent of their client ideally firms should have a perfect industry, says there is currently no and office accounts. map between all the people who legal requirement to self-report a 02 Raising awareness across 03 Have a well-rehearsed plan so OXYGEN FOR BUSINESS’ Given the scale of attacks – cyber work for them and everyone who security breach involving person- the firm is probably the cheapest and you can quickly assess and contain the crime was included in the Office for is on their network. “But in large al data, though this will change most important step because so many problem. Then put out an informative National Statistics figures for the global organisations there are lots in 2018 with the EU regulations breaches involve people being caught message to clients before considering Epiq Systems’ eDisclosure dashboard DMX gives organisations the first time last year and is now offi- of joiners, movers, collaborators, which make reporting mandatory out by scams. If you are a general press release. Handle it cially the UK’s most common crimi- temporary contractors and leavers within 72 hours. attacked, investigate well and you can power to draw much greater insight from legal cases nal offence – it is not surprising that so you need to work closely with hu- Once a breach is reported, he says aggressively so limit reputational clients are increasingly checking man resources to make sure access the ICO will want to know any ag- you don’t get a fallout, says Alex that their law firms aren’t the weak is tightly monitored.” gravating or mitigating factors. reputation for being Cochrane of link in their security chain. There is certainly no silver bullet It has a team of technical experts a soft target, says Collyer Bristow. Mark Jones, Allen & Overy’s chief Panamanian law to mitigate cyber security threats, who know what to ask and any de- Benedict Hamilton firm Mossack Fon- information and security officer says Simon Viney, cyber resilience gree of recklessness or negligence of Kroll. seca was hacked in (CISO), has seen a 300 per cent in- director with risk management spe- will be reflected in the fine which May, leaking 11.5 crease in requests from clients for million documents cialists Stroz Friedberg. it will publicise widely. “In a com- assurances about the firm’s controls. While predictive technology and petitive market, if your clients “Major clients will send in their own Fonseca to leak the largest-ever promised link or is foolish enough people analytics are increasingly cannot trust you, you are lost,” 04 Firms should consider joining 05 You can know your vulnerabilities, he use of business intelligence issues, it will benefit from knowing you to collect the data and normalise IT people to audit our systems, with cache of 11.5 million documents, to log on to sensitive work systems helping organisations understand he warns. the Cyber Security Information identify potential adversaries, have is now widespread in many areas what the wider trends are,” says the spreadsheets, PowerPoints and some even carrying out their own wanted to trigger worldwide politi- on insecure wi-fi or personal devic- employee behaviour and identify But, however resilient you are, some Sharing Partnership, following the most gobsmackingly pure, cohesive of corporate life. A marketing Mr Elliott. “It needs to know which pdfs, and make it into one cohesive penetration testing,” he says. “The cal and business repercussions. es, he says. insider risks, firms need to build a attacks will succeed, so it is crucial to GCHQ’s Ten Steps to Cyber strategy and great relationships with T Security and acquiring the senior team, but you won’t team will use information such as organisations these claims regularly package that a lawyer can make sense number of questions clients are put- Sony was left embarrassed by the And he warns that the hackers’ culture of cyber resilience from the have a well-rehearsed crisis plan. click-through rates to gauge the come from, how many people are of,” says Mr Elliott. ting to us has also gone up by a third content of leaked e-mails, while tradecraft is becoming increasingly top down because absolute security “If you are attacked, the first Cyber Essentials perform to your success or otherwise of campaigns, typically involved and how many “You can start with what you on top of the hundreds they are al- an extortion hack demanding the clever. “Hacking is all about getting is unattainable. thing is to assess how bad the or Cyber Essentials best capability if you while sales teams can assess the documents they typically have to handed over to the other side and see ready asking.” infidelity website Ashley Madison a fingerhold and then escalating The scale of the risk means cyber damage is and then get informa- Plus certification, don’t have sufficient impact of individual people or give to the other side. trends within the case, backwards At the same time, the personal close down resulted in the exposure your privileges so you can hack into security can no longer just be man- tion out to those clients who are says Catherine resources, says promotions on takings. “It might hire three different and forward, which is not usually data protection landscape is chang- of millions of e-mail addresses. Big the computer at will,” says Mr Ham- aged as part of the IT function; it affected,” advises Alex Cochrane, Dixon of the Law Mark Jones of The legal sector, though, has been law firms to represent it across 20 possible. But the real potential is in ing. The Information Commission- corporates are mined for personal ilton. Phishing e-mails remain a needs leadership with real clout senior associate with Collyer Bris- Society. Allen & Overy. slow to make use of this kind of different cases, so which one is the picking up trends across cases so er’s Office (ICO) maximum fines of data to be sold to criminal gangs. favourite, but increasingly hackers across the firm and there is a move tow’s media and privacy team, “Be information. Yet the capability to do most efficient with that data? Which you can be more accurate with your £500,000 will pale in comparison New York security analysts at will research a target’s digital profile among bigger firms to take on dedi- upfront about what has happened, this exists, particularly in the area of collects the least data and which has budget and make strategic changes with the new European Union data Flashpoint, who revealed the Rus- for a way in. They may impersonate cated risk professionals. what you are doing and how you eDisclosure. Adi Elliott, vice president, the highest responsiveness rate in to be more efficient.” security regula- sian M&A hacking a partner’s e-mail and send a col- Mr Jones, who took over the newly will prevent it happening again – market planning, at Epiq Systems, terms of that data being relevant?” Currently, the legal sector is right tions, which come attempts, describe league a link to a draft marketing created role in February, previous- and apologise.” waters for insurers so premiums ment’s confidential Cyber Security gives the example of a corporation at the beginning of deploying such into force in 2018, a dark web where brochure wrapped around malware. ly worked as CISO for BAA Group Firms’ professional indemnity (PI) tend to be high. Anecdotal evidence Information Sharing Partnership, using an in-house legal team or hiring innovation, says Mr Elliott, but he with fines of up hackers are recruit- “You click on the link and I am Heathrow and as a provider of secu- insurers will also want to be kept in- indicates only a minority of larger are increasingly recognised as an a law firm to help with its litigation, believes deployment will pick up pace to 2 per cent of Cyber crime ed and forums ex- in your machine,” he says. One de- rity services including at the Lon- formed, given the potential for legal firms have taken it out so far. important line of defence. and deploying the services of an once awareness of the potential of global turnover or is now officially change counter-in- fence is to have a very good detec- don 2012 Olympics. and regulatory action. Against such a fast-moving back- What is clear in today’s informa- external organisation to assist with the We’re the first eDisclosure gets out. “It takes a really €10 million. telligence to outfox tion and response system with com- “We want the very best, but there is a Costs can escalate dramatically. ground, there is no one-response- tion world is that it is dangerous to data and process management. specific series of skillsets to do this and So do law firms the UK’s most law enforcers. petent staff looking out for warning shortfall of fully qualified people,” he While PI policies provide some cover fits-all option, but firms don’t have underestimate the magnitude of the organisation that is “Part of the disclosure process you have to have a few pieces in place need a wake-up common criminal But what all hack- signs. “Simple as that sounds, we says. “What I am pleased to do here is for third-party losses arising from to fight this alone. risk law firms face. is to figure out how to limit the really injecting business to properly solve this problem,” he says. call? PwC’s Annual offence ers want, whether spend a lot of time helping people help our people develop by sponsoring cyber attacks, they do not typical- The Law Society’s dedicated cyber corporation’s data to certain people intelligence into “We’re the first organisation that is Law Firms’ Survey they are state- develop that capacity because, on them through PhDs in cyber security.” ly cover first-party losses. There is security site has been viewed more Share this article online via within particular periods of time really injecting business intelligence into last year found 62 backed, highly or- some of the most destructive hacks Keeping on top of the challenges dedicated cyber insurance on the than 4,300 times already this year, raconteur.net so legal teams can look at those eDisclosure, but we want eDisclosure, but we want to promote per cent had suf- ganised criminals we have investigated, the alarms is critical because it will help limit market, but it is still unchartered while forums, such as the govern- documents and decide if they are to promote this because this because it’s a valuable process.” fered from a security incident, up or opportunists who have learnt relevant or privileged, before being In the longer term, Mr Elliott from 45 per cent in 2014. However, how to spoof an e-mail via a You- given to the other side,” he says. it’s a valuable process believes this kind of process will only 32 per cent felt very confident Tube clip, is to find the easiest route “Currently each one of those projects become standard practice for legal of their IT disaster recovery capabil- in and law firms make attractive is treated as a separate and distinct teams, in the same way that business ities and only 49 per cent of senior targets because their unique selling task, even though a corporation might Having this kind of information intelligence is used by other parts of management had participated in point is their people. be involved in very similar projects can help identify the most efficient organisations. “No marketing person relevant training. Benedict Hamilton, who leads hundreds of times a year.” and cost-effective law firms, he says, today would advertise for a campaign Attacks can come from any quarter Kroll’s Europe, Middle East and Af- There are often good reasons for as well as help organisations get a and not want to see A/B testing and so it is vital, says Mr Jones, to know rica business and cyber investiga- this, he adds, including the fact that better idea of how much such cases click-through rates, or to create “where your vulnerabilities are be- tions team, says about 90 per cent different people from the client should cost them, and identify any three different campaigns that are fore your enemy does and identify of losses of confidential information organisation or law firm may work potential underlying issues in the all radically different and not want to your main risks so you can work out are, deliberately or inadvertent- on particular cases, but the end business which could reduce the know which one is best,” he says. “It’s who your adversaries may be so you ly, by insiders – recently departed result is that businesses are unable number of cases in the first place. like oxygen for businesspeople and this can prioritise your response”. employees, people in the “circle of to identify any trends across cases or Using a system such as Epiq Systems’ will be the same for eDisclosure too.” Recent attacks show how hackers trust” such as sub-contractors or compare the services and efficiency eDisclosure dashboard DMX gives can blindside their targets. The self- disaffected partners. of different providers. organisations the power to draw much For more information about how styled “John Doe”, who exploited But many attacks succeed be- “If a business is sued 20 times a greater insight, both within individual Epiq Systems can help your business, weaknesses in the computer system cause a partner or employee has year around labour and employment cases and more generally. “It allows visit www.epiqsystems.co.uk at Panamanian law firm Mossack been tricked into clicking on a com- 14 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29xx / 06xx / 2016 xxxx raconteur.net LEGAL INNOVATIONXXXX 152

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Roll over Rumpole and dig that digital A SIGN OF LEGAL Sentenced to spending cuts, the criminal justice system is creaking under the strain despite attempts to leap forward into the digital age SOPHISTICATION, SECURITY AND EFFICIENCY vice (CPS) £21.5 million on cases porting defendants from police CATHERINE BAKSI that did not go ahead. stations or prisons to court, and up- Shutterstock With 26 per cent funding cuts graded systems have been installed CERTAINTY forced on the criminal justice sys- in 130 courts. In 2014 Judge John he caricature of elderly tem since 2010/11, coupled with a Tanzer appeared via Skype at Croy- Rumpole-style duffersrise in the number of longer, more don Crown Court to hear a jury de- DocuSign’s global eSignature and DTM grappling with bundles of complex cases, it is little wonder liver its verdict in a case of a teacher Tpapers tied with yards of that it is feeling the strain. acquitted of sexual offences. platform are consigning pen and pink ribbon is the picture that many But the inefficiencies existed As austerity cutbacks force the have of the criminal courts. But that long before the cuts. Lord Justice sale of court buildings, proposals paper to the past image is rapidly being consigned to Jackson noted in his 2014 review of from law reform group Justice, in its the history books. efficiency in criminal proceedings What is a court? report, mooted pop- LOGO Squeezed by funding cuts and that the system relies on “a com- up courts in public buildings. increasing caseloads, economic ne- bination of long-standing manual All this sounds impressive, but cessity has compelled the criminal processes and ageing computer government IT projects do not have justice system to systems that have a great track record and glitches are embrace the IT rev- evolved in a piece- already causing headaches. y their very nature, lawyers are a Fortunately, English courts olution in a bid to meal fashion over The Delivering Justice in a Digital cautious bunch. So when a topic have given a clear signal that an speed up cases and many decades”. Age report, published in April, found Bhits the radar of the sector’s electronic transaction can satisfy the reduce waste. Back in 2013, Da- that computer systems used by crim- professional bodies, it is taken a little statutory requirement for writing or In the 21st-centu- Government mian Green, then inal justice agencies did not talk to more seriously. signature just as effectively as a paper prepare, execute and manage the wider adoption of platforms such administered through DocuSign ry criminal court, IT projects do not a justice minister, each other and some parties still re- Electronic signatures have become transaction (Golden Ocean Group Ltd life cycle of business transactions in as DocuSign to make the digital were completed in under an hour, iPads replace pa- have a great track stressed the need Old Bailey, courts and tribunals, in what the lied on paper and manual processes, one such topic, as the profession v Salgaocar Mining Industries PVT Ltd a fully digitised environment,” says transformation to conduct business project turnaround time was per, pop-up venues to end the “out-dat- Central Criminal PAC describes as an ambitious re- which lead to duplication of work awaits guidance expected from the and another 2012). Richard Oliphant, Europe, Middle East transactions 100 per cent digital. reduced by almost two weeks and, Court in London replace courtrooms record and glitches ed” reliance on pa- form programme. and an increased risk of error. Law Society and City of London Some electronic transactions are and Africa general counsel at DocuSign. When assessing whether to use unsurprisingly for a global leader, and defendants are already causing per, announcing The plan is now to have a fully It expressed concern that the lack of Law Society endorsing the use of concluded via e-mail or by clicking “You have access to a real-time electronic signatures, for Mr Oliphant, return on investment increased by will be able to enter headaches plans for a fully connected digital courtroom by a reliable method to share informa- electronic signatures. an “I accept” button on a website. audit trail, tracking every step of risk analysis is a critical factor. 300 per cent. pleas online with- digital court room 2020, which Her Majesty’s Courts tion, including CCTV, 999 and inter- The general rule under English But these signatures provide a low the transaction, who signed, when “Lawyers are often too cautious and The term no-brainer is often out setting foot in by 2016. and Tribunals Service (HMCTS) view records, resulted in lost data and law is that a contract may be made level of security and authentication, they signed and, in some cases, overstate the risk of using an electronic overused in the corporate world, yet for the dock. “Every year the says it is on track to deliver and it concluded the vision of a digital end- informally, with nothing required in therefore the more digitally mature where they signed. It generates signature. But, in actual fact, you can those digitally mature businesses, the Last year the government spent £2 courts and Crown Prosecution Ser- estimates will save £200 million a 33% to-end system is still some way from writing for the contract to be legally enterprises are turning to companies the ‘proof’ of signature that you use an electronic signature to create ones with the confidence to embrace billion on the criminal justice system, vice use roughly 160 million sheets of year from 2019/20. of trials in the Crown Court becoming reality. The report also binding. Although there are some such as DocuSign for something a can rely on in court to establish the a legally enforceable contract unless the use of electronic signatures, the which dealt with 1.7 million offences paper. Stacked up this would be the A joint report by the CPS and between 2014 and 2015 went questioned how the digital age em- types of contract where there is a little more sophisticated. authenticity and integrity of the that contract is one of the very limited numbers speak for themselves. ahead as planned on the day statutory requirement for writing or DocuSign runs a digital transaction electronic transaction.” categories of contracts under English law Digital leaders can improve their in the courts. But a parliamentary same as 15 Mount Snowdons – literal- HMCTS inspectors, Delivering Justice they were due to start braces the unrepresented defendant. watchdog warned last month that the ly mountains of paper,” he said. in a Digital Age, notes that progress Zoe Gascoyne, chairwoman of rep- a signature. management platform enabling its In a world where accountability, that should not be signed electronically, profitability by more than 50 per system is close to breaking point and Over the years, the criminal jus- has been made. More than 90 per cent resentative group, the Criminal Law We live in a digital age. Yet the law customers to eliminate paper, and transparency and legal certainty are such as transfers of land,” he says. cent. Their market capitalisation can failing victims, who face a postcode tice agencies have introduced a pan- of cases are transferred to the CPS Solicitors’ Association, highlights often lags behind technology and transact their business more quickly, key, that has to be reassuring. “Customers are always surprised rise by a fifth. The ability to generate lottery in getting justice. oply of initiatives designed to tackle from the police electronically and annoying bug-bears when the tech- lawyers have wondered whether an efficiently and securely. And this can only be reinforced by when I tell them that there has not more revenue increases significantly. The Public Accounts Committee inefficiency, by reducing reliance on nearly all magistrates’ courts are able nology fails. electronic transaction could fulfil “DocuSign is much more than an upcoming changes in European Union been a single case in which the While the perception of electronic (PAC) said the “overstretched and paper, enabling digital working and to receive digitally from the CPS the She says wi-fi problems make disclo- these statutory requirements. e-signing platform – it allows you to law. Notwithstanding the Brexit English courts have ruled on whether signatures might be they offer a lower disjointed” system was “bedevilled cutting court hearings, to the extent initial details of the prosecution case. sure at court impossible, magistrates bombshell, a new eIDAS (electronic a document was validly signed via an degree of authenticity and integrity by long-standing poor performance, that Lord Justice Jackson reported All criminal courts have wi-fi, wide- are asked to make bail and sentencing identification and trust services) electronic signature platform.” than a handwritten signature, it including delays and inefficiencies”. “transformation exhaustion” in a screens and click-share technology, decisions without seeing a copy of the DOCUSIGN IN NUMBERS Regulation will come into force on That offers some genuine seems that for electronic signatures It found that only a third of system “crowded with plans for fu- enabling the prosecution and defence £21.5m defendant’s record because prosecu- July 1 across the EU including, initially reassurance; not only are contracts produced by a secure, reputable crown court trials proceed on ture development”. to present evidence digitally. estimated cost to the tors only have it on their laptop, and at least, the UK. rarely challenged over the signature, platform, the opposite is true. Crown Prosecution Service schedule or at all, which in 2014/15 The Treasury has committed more The crown court digital case sys- in some courts prosecutors are unable eIDAS aims to build more trust but in the event of a challenge, the audit In an increasingly globalised world, for cases that do not go cost the Crown Prosecution Ser- than £700 million to modernise the tem, a web-based digital document on to trial to send anything directly to lawyers, in electronic transactions across trail that comes with an e-signature the level of cross-border, cross-time tool, has been rolled out for the ser- which means relying on a remotely 62% 85m+ the EU member states and create lends it significant evidential weight, zone, cross-cultural business being of documents users in 188 CROWN COURT CASES ARE TAKING LONGER TO PROCESS THROUGH THE SYSTEM vice and receipt of disclosure and located third party to monitor e-mails a more predictable regulatory making any challenge, unless fraud- conducted has never been greater. evidence. In addition, HMCTS says and deal with urgent requests. completed in less countries framework for “trust services” related, difficult to pursue. Standards are crucial and DocuSign’s AVERAGE WAITING TIMES IN DAYS FROM ALLEGED OFFENCE TO COMPLETION than 1 hour on the progress is being made on the com- In addition, says Ms Gascoyne, including electronic signatures. Notwithstanding that legal certainty, platform runs in adherence with ISO DocuSign global Incident to charge Listing to magistrates’ court completion Crown Court hearing to completion The move is very welcome. It will however, for many enterprises across a 27001, the international best-practice mon platform programme, an online prisons often refuse to allow lawyers trust network Change to listing Waiting time for Crown Court hearing case-management system covering to use their laptops notwithstand- replace the eSignature Directive, in multitude of sectors, the conversation framework for an information security the entire process from pre-charge to ing that the evidence is served in place since 1999 and the subject of much is far simpler. management system. disposal, giving all parties access to digital format. criticism, having been implemented “Digitising your workflow is As Mr Oliphant says: “Trust in the 2011 one digital case file. 34% Implementation of many schemes, 300% 85k inconsistently across the EU. integral to a successful business cloud today is absolutely paramount. The first paperless trial, in which increase in the she says, tends only to paper over average return new users join the The European Commission model these days. For the more agile Our reputation hinges on our ability jurors used iPads rather than files of backlog of cases in the cracks without putting the basic on investment network every day believes this fragmentation has enterprises, operating in different to keep our customers’ business Crown Court since 2012 evidence, took place in Birmingham structure of the system right. made it far harder to conduct cross- hemispheres or time zones, they can information and data confidential. in 2013. A handful of others have oc- March 2013 Ms Gascoyne concludes: “The border electronic transactions. authorise and sign contracts without We therefore invest heavily to ensure curred since, including a large fraud problem with the concept of being Cross-border e-commerce is the the need for a power of attorney, for we comply with the best-in-class IT trial last year at London’s South- fully digital is that the criminal jus- 61% 368m focus of the commission’s flagship example,” says Mr Oliphant. security standards.” 2013 wark Crown Court. tice system deals with real people. improvement in sheets of Digital Single Market programme. “And there’s the efficiency and cost- DocuSign has 225,000 corporate HMCTS is piloting other initia- “It is easy for those outside the productivity paper saved Introduction of eIDAS will boost savings through going paperless – you customers and 85 million users. tives, including “digital mark-up” system to conjure up exciting plans, this initiative, ncouraging the remove the need for printing, faxing, On the back of the Law Society’s which immediately records case but the bottom line is that the crim- scanning and mailing. These outdated guidance and the new EU regime for 2014 outcomes and triggers notifications inal justice system is about the vic- services not only eat up money, they trust services under eIDAS, this is set and documents to support or en- £ m tim, the defendant and achieving don’t belong in the digital era.” to rise. More and more enterprises force decisions. 44 justice – none of which will ever be DocuSign is much more than an With added certainty, speed, will trust DocuSign’s platform to Defendants will be able to enter additional costs due to the digitised and all of which requires a £25.80 722m efficiency, security and backed by prepare, execute and manage their 2015 increasing length of Crown e-signing platform – it allows you to guilty pleas online for traffic offences Court trials between 2010 human touch.” savings per trees protected a comprehensive digital audit trail, electronic transactions – and consign following completion of the scheme’s and 2015 document prepare, execute and manage the life the quality of the user experience pen and paper to the past. will skyrocket. national rollout this month. Share this article online via cycle of business transactions in a 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 The use of video links has been raconteur.net Sources: Aragon Research/EDF/EPA/Forrester/IDC/Intellicap We know time is money. More For more information please visit Source: National Audit Office/Ministry of Justice 2016 expanded to save the cost of trans- Source: National Audit Office 2016 fully digitised environment than 62 per cent of documents www.docusign.com 14 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29xx / 06xx / 2016 xxxx raconteur.net LEGAL INNOVATIONXXXX 152

COMMERCIAL FEATURE

Roll over Rumpole and dig that digital A SIGN OF LEGAL Sentenced to spending cuts, the criminal justice system is creaking under the strain despite attempts to leap forward into the digital age SOPHISTICATION, SECURITY AND EFFICIENCY vice (CPS) £21.5 million on cases porting defendants from police CATHERINE BAKSI that did not go ahead. stations or prisons to court, and up- Shutterstock With 26 per cent funding cuts graded systems have been installed CERTAINTY forced on the criminal justice sys- in 130 courts. In 2014 Judge John he caricature of elderly tem since 2010/11, coupled with a Tanzer appeared via Skype at Croy- Rumpole-style duffersrise in the number of longer, more don Crown Court to hear a jury de- DocuSign’s global eSignature and DTM grappling with bundles of complex cases, it is little wonder liver its verdict in a case of a teacher Tpapers tied with yards of that it is feeling the strain. acquitted of sexual offences. platform are consigning pen and pink ribbon is the picture that many But the inefficiencies existed As austerity cutbacks force the have of the criminal courts. But that long before the cuts. Lord Justice sale of court buildings, proposals paper to the past image is rapidly being consigned to Jackson noted in his 2014 review of from law reform group Justice, in its the history books. efficiency in criminal proceedings What is a court? report, mooted pop- LOGO Squeezed by funding cuts and that the system relies on “a com- up courts in public buildings. increasing caseloads, economic ne- bination of long-standing manual All this sounds impressive, but cessity has compelled the criminal processes and ageing computer government IT projects do not have justice system to systems that have a great track record and glitches are embrace the IT rev- evolved in a piece- already causing headaches. y their very nature, lawyers are a Fortunately, English courts olution in a bid to meal fashion over The Delivering Justice in a Digital cautious bunch. So when a topic have given a clear signal that an speed up cases and many decades”. Age report, published in April, found Bhits the radar of the sector’s electronic transaction can satisfy the reduce waste. Back in 2013, Da- that computer systems used by crim- professional bodies, it is taken a little statutory requirement for writing or In the 21st-centu- Government mian Green, then inal justice agencies did not talk to more seriously. signature just as effectively as a paper prepare, execute and manage the wider adoption of platforms such administered through DocuSign ry criminal court, IT projects do not a justice minister, each other and some parties still re- Electronic signatures have become transaction (Golden Ocean Group Ltd life cycle of business transactions in as DocuSign to make the digital were completed in under an hour, iPads replace pa- have a great track stressed the need Old Bailey, courts and tribunals, in what the lied on paper and manual processes, one such topic, as the profession v Salgaocar Mining Industries PVT Ltd a fully digitised environment,” says transformation to conduct business project turnaround time was per, pop-up venues to end the “out-dat- Central Criminal PAC describes as an ambitious re- which lead to duplication of work awaits guidance expected from the and another 2012). Richard Oliphant, Europe, Middle East transactions 100 per cent digital. reduced by almost two weeks and, Court in London replace courtrooms record and glitches ed” reliance on pa- form programme. and an increased risk of error. Law Society and City of London Some electronic transactions are and Africa general counsel at DocuSign. When assessing whether to use unsurprisingly for a global leader, and defendants are already causing per, announcing The plan is now to have a fully It expressed concern that the lack of Law Society endorsing the use of concluded via e-mail or by clicking “You have access to a real-time electronic signatures, for Mr Oliphant, return on investment increased by will be able to enter headaches plans for a fully connected digital courtroom by a reliable method to share informa- electronic signatures. an “I accept” button on a website. audit trail, tracking every step of risk analysis is a critical factor. 300 per cent. pleas online with- digital court room 2020, which Her Majesty’s Courts tion, including CCTV, 999 and inter- The general rule under English But these signatures provide a low the transaction, who signed, when “Lawyers are often too cautious and The term no-brainer is often out setting foot in by 2016. and Tribunals Service (HMCTS) view records, resulted in lost data and law is that a contract may be made level of security and authentication, they signed and, in some cases, overstate the risk of using an electronic overused in the corporate world, yet for the dock. “Every year the says it is on track to deliver and it concluded the vision of a digital end- informally, with nothing required in therefore the more digitally mature where they signed. It generates signature. But, in actual fact, you can those digitally mature businesses, the Last year the government spent £2 courts and Crown Prosecution Ser- estimates will save £200 million a 33% to-end system is still some way from writing for the contract to be legally enterprises are turning to companies the ‘proof’ of signature that you use an electronic signature to create ones with the confidence to embrace billion on the criminal justice system, vice use roughly 160 million sheets of year from 2019/20. of trials in the Crown Court becoming reality. The report also binding. Although there are some such as DocuSign for something a can rely on in court to establish the a legally enforceable contract unless the use of electronic signatures, the which dealt with 1.7 million offences paper. Stacked up this would be the A joint report by the CPS and between 2014 and 2015 went questioned how the digital age em- types of contract where there is a little more sophisticated. authenticity and integrity of the that contract is one of the very limited numbers speak for themselves. ahead as planned on the day statutory requirement for writing or DocuSign runs a digital transaction electronic transaction.” categories of contracts under English law Digital leaders can improve their in the courts. But a parliamentary same as 15 Mount Snowdons – literal- HMCTS inspectors, Delivering Justice they were due to start braces the unrepresented defendant. watchdog warned last month that the ly mountains of paper,” he said. in a Digital Age, notes that progress Zoe Gascoyne, chairwoman of rep- a signature. management platform enabling its In a world where accountability, that should not be signed electronically, profitability by more than 50 per system is close to breaking point and Over the years, the criminal jus- has been made. More than 90 per cent resentative group, the Criminal Law We live in a digital age. Yet the law customers to eliminate paper, and transparency and legal certainty are such as transfers of land,” he says. cent. Their market capitalisation can failing victims, who face a postcode tice agencies have introduced a pan- of cases are transferred to the CPS Solicitors’ Association, highlights often lags behind technology and transact their business more quickly, key, that has to be reassuring. “Customers are always surprised rise by a fifth. The ability to generate lottery in getting justice. oply of initiatives designed to tackle from the police electronically and annoying bug-bears when the tech- lawyers have wondered whether an efficiently and securely. And this can only be reinforced by when I tell them that there has not more revenue increases significantly. The Public Accounts Committee inefficiency, by reducing reliance on nearly all magistrates’ courts are able nology fails. electronic transaction could fulfil “DocuSign is much more than an upcoming changes in European Union been a single case in which the While the perception of electronic (PAC) said the “overstretched and paper, enabling digital working and to receive digitally from the CPS the She says wi-fi problems make disclo- these statutory requirements. e-signing platform – it allows you to law. Notwithstanding the Brexit English courts have ruled on whether signatures might be they offer a lower disjointed” system was “bedevilled cutting court hearings, to the extent initial details of the prosecution case. sure at court impossible, magistrates bombshell, a new eIDAS (electronic a document was validly signed via an degree of authenticity and integrity by long-standing poor performance, that Lord Justice Jackson reported All criminal courts have wi-fi, wide- are asked to make bail and sentencing identification and trust services) electronic signature platform.” than a handwritten signature, it including delays and inefficiencies”. “transformation exhaustion” in a screens and click-share technology, decisions without seeing a copy of the DOCUSIGN IN NUMBERS Regulation will come into force on That offers some genuine seems that for electronic signatures It found that only a third of system “crowded with plans for fu- enabling the prosecution and defence £21.5m defendant’s record because prosecu- July 1 across the EU including, initially reassurance; not only are contracts produced by a secure, reputable crown court trials proceed on ture development”. to present evidence digitally. estimated cost to the tors only have it on their laptop, and at least, the UK. rarely challenged over the signature, platform, the opposite is true. Crown Prosecution Service schedule or at all, which in 2014/15 The Treasury has committed more The crown court digital case sys- in some courts prosecutors are unable eIDAS aims to build more trust but in the event of a challenge, the audit In an increasingly globalised world, for cases that do not go cost the Crown Prosecution Ser- than £700 million to modernise the tem, a web-based digital document on to trial to send anything directly to lawyers, in electronic transactions across trail that comes with an e-signature the level of cross-border, cross-time tool, has been rolled out for the ser- which means relying on a remotely 62% 85m+ the EU member states and create lends it significant evidential weight, zone, cross-cultural business being of documents users in 188 CROWN COURT CASES ARE TAKING LONGER TO PROCESS THROUGH THE SYSTEM vice and receipt of disclosure and located third party to monitor e-mails a more predictable regulatory making any challenge, unless fraud- conducted has never been greater. evidence. In addition, HMCTS says and deal with urgent requests. completed in less countries framework for “trust services” related, difficult to pursue. Standards are crucial and DocuSign’s AVERAGE WAITING TIMES IN DAYS FROM ALLEGED OFFENCE TO COMPLETION than 1 hour on the progress is being made on the com- In addition, says Ms Gascoyne, including electronic signatures. Notwithstanding that legal certainty, platform runs in adherence with ISO DocuSign global Incident to charge Listing to magistrates’ court completion Crown Court hearing to completion The move is very welcome. It will however, for many enterprises across a 27001, the international best-practice mon platform programme, an online prisons often refuse to allow lawyers trust network Change to listing Waiting time for Crown Court hearing case-management system covering to use their laptops notwithstand- replace the eSignature Directive, in multitude of sectors, the conversation framework for an information security the entire process from pre-charge to ing that the evidence is served in place since 1999 and the subject of much is far simpler. management system. disposal, giving all parties access to digital format. criticism, having been implemented “Digitising your workflow is As Mr Oliphant says: “Trust in the 2011 one digital case file. 34% Implementation of many schemes, 300% 85k inconsistently across the EU. integral to a successful business cloud today is absolutely paramount. The first paperless trial, in which increase in the she says, tends only to paper over average return new users join the The European Commission model these days. For the more agile Our reputation hinges on our ability jurors used iPads rather than files of backlog of cases in the cracks without putting the basic on investment network every day believes this fragmentation has enterprises, operating in different to keep our customers’ business Crown Court since 2012 evidence, took place in Birmingham structure of the system right. made it far harder to conduct cross- hemispheres or time zones, they can information and data confidential. in 2013. A handful of others have oc- March 2013 Ms Gascoyne concludes: “The border electronic transactions. authorise and sign contracts without We therefore invest heavily to ensure curred since, including a large fraud problem with the concept of being Cross-border e-commerce is the the need for a power of attorney, for we comply with the best-in-class IT trial last year at London’s South- fully digital is that the criminal jus- 61% 368m focus of the commission’s flagship example,” says Mr Oliphant. security standards.” 2013 wark Crown Court. tice system deals with real people. improvement in sheets of Digital Single Market programme. “And there’s the efficiency and cost- DocuSign has 225,000 corporate HMCTS is piloting other initia- “It is easy for those outside the productivity paper saved Introduction of eIDAS will boost savings through going paperless – you customers and 85 million users. tives, including “digital mark-up” system to conjure up exciting plans, this initiative, ncouraging the remove the need for printing, faxing, On the back of the Law Society’s which immediately records case but the bottom line is that the crim- scanning and mailing. These outdated guidance and the new EU regime for 2014 outcomes and triggers notifications inal justice system is about the vic- services not only eat up money, they trust services under eIDAS, this is set and documents to support or en- £ m tim, the defendant and achieving don’t belong in the digital era.” to rise. More and more enterprises force decisions. 44 justice – none of which will ever be DocuSign is much more than an With added certainty, speed, will trust DocuSign’s platform to Defendants will be able to enter additional costs due to the digitised and all of which requires a £25.80 722m efficiency, security and backed by prepare, execute and manage their 2015 increasing length of Crown e-signing platform – it allows you to guilty pleas online for traffic offences Court trials between 2010 human touch.” savings per trees protected a comprehensive digital audit trail, electronic transactions – and consign following completion of the scheme’s and 2015 document prepare, execute and manage the life the quality of the user experience pen and paper to the past. will skyrocket. national rollout this month. Share this article online via cycle of business transactions in a 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 The use of video links has been raconteur.net Sources: Aragon Research/EDF/EPA/Forrester/IDC/Intellicap We know time is money. More For more information please visit Source: National Audit Office/Ministry of Justice 2016 expanded to save the cost of trans- Source: National Audit Office 2016 fully digitised environment than 62 per cent of documents www.docusign.com 16 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 17 Sending out for help is judged a success Once mainly a cost-cutting exercise, legal process outsourcing is now an innovative business model which law firms and in-house corporate teams should embrace

OUTSOURCING be seen. But in the meantime there litigation support, document re- value or ticking bomb that could EDWARD FENNELL are still plenty of firms, especially view and e-discovery, the offer now otherwise be missed. The technolo- medium-sized outfits, for whom the made by leading outsourcing pro- gy is there to automate this process,

Exigent penny still has not dropped about viders extends to cover fields such but a contract strategy that includes ithin the past decade, the benefits of outsourcing. contract strategy and review, M&A a risk-based assessment to deal with legal process out- “We know firms who are missing transaction support, information the legacy contract portfolio is im- sourcing has had a ma- out on work because they are being governance, corporate compliance, portant. With all this key data at Wjor impact on the way slow to innovate in this area,” says as well as a range of other consul- their fingertips, in-house counsel top law firms operate – except, you Ms Stott. “General counsel are be- tancy services. can deliver meaningful commercial might say, on the things that really coming increasingly assertive and Part of the reason for this is that metrics to their board,” she says. matter most about being a lawyer. saying to their legal providers, ‘You in-house counsel, just as much as From a general counsel’s perspec- By applying the latest technology really have to consider these alter- law firms, are now coming for their tive, this is manna from heaven. No- and harnessing the skills of legal natives because the benefits are so services. The reasons why are well body likes being caught out by nas- process experts, outsourcing com- clear – if you don’t, then we won’t be exemplified by the growth in the ty surprises and the possibility of panies have relieved the burden on using you’.” appetite for a well-designed con- generating additional income from law firms from processing the vast Ms Stott concedes that it is a “bit tract strategy. existing contracts is very welcome amounts of due diligence, search of a head scratch” for some law “Contracts are negotiated with at a time when in-house legal de- and similar routine work. firms to take on board that these great care and enormous attention partments are expected to be profit This has allowed firms to focus on Head office of legal are the new rules of the game. “But to detail, but once signed they are producers, not just cost centres. what they do best – applying their process outsourcing that’s life. Things cannot go on as often simply put to one side and “Heads of legal now need to be provider Exigent creative, analytical legal minds to the in Cape Town, they have in the past. Those who forgotten about,” says Ms Stott. It’s able to show to their chief financial problems and priorities of the client. South Africa, a don’t move with the times and crazy really because an organisa- officers that they are contributing to The result has been transforma- popular location the technology will just be left be- tion’s contract portfolio is a very the profitability of the business, not tional in the way law firms operate. for outsourcing hind,” she warns. valuable asset; a potential gold draining resources,” says Ms Stott. legal services Clients have become more focused A good example of this is the ful- mine in some cases with overlooked Through the clever use of legal on driving value from their law firms innovative, flexible and cost-effec- billing systems for clients, and col- filment of due diligence in a mergers details such as price increase trig- outsourcing, they can now achieve and will often not tolerate anything TOP FUNCTIONS OUTSOURCED tive ways of working through alter- laborate in developing a common and acquisitions (M&A) transaction. gers. Where a large company has this either directly themselves less than the optimal (or at least cre- BY LAW FIRMS native delivery models. Corporate interest structure which can act on “We can confidently say that utilis- hundreds, maybe thousands, of or through the law firms they ap- 84% ative) way of delivering services. Mailroom clients want value; it’s all they talk behalf of a group. ing alternative delivery models that contracts with a range of clients or point. Legal outsourcing is not As Nicola Stott, global managing and copy about. Aligning legal tasks and ac- “I would love to get together with, combine smart technology with providers, it can easily lose sight of rocket science – in fact, it could be director of Exigent, an outsourcing Reception 51% tivities with appropriately skilled say, five of the big firms to devel- appropriately skilled people would critical details and dates. a no-brainer. provider, points out: “The financial and hospitality and experienced people for a fair op something along these lines,” save at least 50 per cent on due dil- “Visibility of and accessibility to crisis and other economic pressures Document 43% and reasonable price – without jeop- he says. Of course igence costs with- key terms is essential for any kind Share this article online via have meant that lawyers across the processing ardising the outcome for the client – there are issues of out jeopardising of meaningful obligation manage- raconteur.net board – whether in firms or in- Records 33% speaks to value.” security and con- quality,” says Ms ment, not to mention the hidden house corporate – are expected to management So it is clear that the discussion fidentiality, but Stott. do more for less.” Collections 24% about how far outsourcing services “Chinese walls”, Those who One of the key But this can raise deep ques- process can go has still a long way to run. restricting infor- don’t move reasons for this is tions about what it means to be 24% Bob Gogel, chief executive of out- mation flow, are that outsource pro- CASE STUDY: INTEGREON AND RECOMMIND IT lawyer and where the distinctive sourcing provider Integreon, draws already part and with the times viders are free of character of a firm is to be found. Marketing/creative 22% comparisons with what has been parcel of how legal many of the finan- including web and the technology After all, the topic of the moment – development happening in the financial servic- outsourcers oper- will just be cial obligations and the results of that review were thanks to Richard and Daniel Suss- Business intelligence 16% es industry. As he points out, there ate. The partici- overheads which then used to “train” the predictive kind’s book The Future of the Pro- and research is fierce rivalry between the banks pating firms could left behind hang heavy on law coding technology to initiate a fessions – is how far machines and E-billing and 16% over, for example, the provision of then enjoy the firms, elements concurrent, analytics-driven, artificial intelligence are going to billing process credit cards. Nonetheless, behind benefits of scale or such as the need prioritised review. take over. If lots of firms are using Human 16% the scenes there is an enormous pass the price savings on to clients. for expensive offices, large public With each iteration, the results of the same back-office services pro- resources amount of co-operation through But either way it would be a cheap- relations teams and very expensive human review were used to refine vided by outsourcing companies, Data 14% co-ownership of the agency which er, more efficient way to act, says staff. They are lean and highly fo- the predictive coding engine’s where is the character of the firm security processes the transactions. Mr Gogel. Indeed, it would be the cused with no need for the fancy training to improve the relevance to be found? Secretarial 14% This prompts the challenge that logical conclusion of how to exploit trimmings. of the next suggested document “It really comes down to a question services Mr Gogel now lays down to law optimally what legal outsourcing What is remarkable, moreover, is set and thereby increasing of attitude and outlook,” says Ms Finance, accounting 12% firms. In a nutshell, he is saying, has to offer. the way a growing number of ser- reviewer efficiency. In due course, Stott. “Firms can differentiate them- and data entry put aside your rivalry over things Whether the large law firms will vices are being added to the list. When law firm Ashurst LLP acted as the presence of relevant selves by the way they adopt more Source: Williams Lea/Sandpiper Partners 2015 that do not matter, such as your pick up on this prospect remains to With its roots in activities such as for a financial services business documents in the unreviewed in alleging that there had been set fell to near zero, it became negligence by an auditing company, apparent that human review of it faced a demanding deadline to the remaining documents was not identify key documents from an worth the effort. enormous volume of material. Throughout the review It turned for assistance to there was good co-operation Integreon to provide as many as between the law firm and its 80 legal reviewers for a process legal outsourcing suppliers. of linear review. It also brought in Recommind and Integreon’s data technology company Recommind science and project management to provide an e-discovery platform experts guided the Ashurst legal to apply advanced analytics and, team with regard to technology, in particular, predictive coding to best practices and defensibility. ensure the deadline and disclosure Subsequently when the other requirements could be met. side posed specific challenges, Two workflows were then Recommind’s consultants followed. The Integreon team, supported the solicitors and supervised by Ashurst’s lawyers, barristers in their presentations www.leap.co.uk/cloud 0843 713 0135 | [email protected] started reviewing documents and to the court. 16 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29 / 06 / 2016 raconteur.net LEGAL INNOVATION 17 Sending out for help is judged a success Once mainly a cost-cutting exercise, legal process outsourcing is now an innovative business model which law firms and in-house corporate teams should embrace

OUTSOURCING be seen. But in the meantime there litigation support, document re- value or ticking bomb that could EDWARD FENNELL are still plenty of firms, especially view and e-discovery, the offer now otherwise be missed. The technolo- medium-sized outfits, for whom the made by leading outsourcing pro- gy is there to automate this process,

Exigent penny still has not dropped about viders extends to cover fields such but a contract strategy that includes ithin the past decade, the benefits of outsourcing. contract strategy and review, M&A a risk-based assessment to deal with legal process out- “We know firms who are missing transaction support, information the legacy contract portfolio is im- sourcing has had a ma- out on work because they are being governance, corporate compliance, portant. With all this key data at Wjor impact on the way slow to innovate in this area,” says as well as a range of other consul- their fingertips, in-house counsel top law firms operate – except, you Ms Stott. “General counsel are be- tancy services. can deliver meaningful commercial might say, on the things that really coming increasingly assertive and Part of the reason for this is that metrics to their board,” she says. matter most about being a lawyer. saying to their legal providers, ‘You in-house counsel, just as much as From a general counsel’s perspec- By applying the latest technology really have to consider these alter- law firms, are now coming for their tive, this is manna from heaven. No- and harnessing the skills of legal natives because the benefits are so services. The reasons why are well body likes being caught out by nas- process experts, outsourcing com- clear – if you don’t, then we won’t be exemplified by the growth in the ty surprises and the possibility of panies have relieved the burden on using you’.” appetite for a well-designed con- generating additional income from law firms from processing the vast Ms Stott concedes that it is a “bit tract strategy. existing contracts is very welcome amounts of due diligence, search of a head scratch” for some law “Contracts are negotiated with at a time when in-house legal de- and similar routine work. firms to take on board that these great care and enormous attention partments are expected to be profit This has allowed firms to focus on Head office of legal are the new rules of the game. “But to detail, but once signed they are producers, not just cost centres. what they do best – applying their process outsourcing that’s life. Things cannot go on as often simply put to one side and “Heads of legal now need to be provider Exigent creative, analytical legal minds to the in Cape Town, they have in the past. Those who forgotten about,” says Ms Stott. It’s able to show to their chief financial problems and priorities of the client. South Africa, a don’t move with the times and crazy really because an organisa- officers that they are contributing to The result has been transforma- popular location the technology will just be left be- tion’s contract portfolio is a very the profitability of the business, not tional in the way law firms operate. for outsourcing hind,” she warns. valuable asset; a potential gold draining resources,” says Ms Stott. legal services Clients have become more focused A good example of this is the ful- mine in some cases with overlooked Through the clever use of legal on driving value from their law firms innovative, flexible and cost-effec- billing systems for clients, and col- filment of due diligence in a mergers details such as price increase trig- outsourcing, they can now achieve and will often not tolerate anything TOP FUNCTIONS OUTSOURCED tive ways of working through alter- laborate in developing a common and acquisitions (M&A) transaction. gers. Where a large company has this either directly themselves less than the optimal (or at least cre- BY LAW FIRMS native delivery models. Corporate interest structure which can act on “We can confidently say that utilis- hundreds, maybe thousands, of or through the law firms they ap- 84% ative) way of delivering services. Mailroom clients want value; it’s all they talk behalf of a group. ing alternative delivery models that contracts with a range of clients or point. Legal outsourcing is not As Nicola Stott, global managing and copy about. Aligning legal tasks and ac- “I would love to get together with, combine smart technology with providers, it can easily lose sight of rocket science – in fact, it could be director of Exigent, an outsourcing Reception 51% tivities with appropriately skilled say, five of the big firms to devel- appropriately skilled people would critical details and dates. a no-brainer. provider, points out: “The financial and hospitality and experienced people for a fair op something along these lines,” save at least 50 per cent on due dil- “Visibility of and accessibility to crisis and other economic pressures Document 43% and reasonable price – without jeop- he says. Of course igence costs with- key terms is essential for any kind Share this article online via have meant that lawyers across the processing ardising the outcome for the client – there are issues of out jeopardising of meaningful obligation manage- raconteur.net board – whether in firms or in- Records 33% speaks to value.” security and con- quality,” says Ms ment, not to mention the hidden house corporate – are expected to management So it is clear that the discussion fidentiality, but Stott. do more for less.” Collections 24% about how far outsourcing services “Chinese walls”, Those who One of the key But this can raise deep ques- process can go has still a long way to run. restricting infor- don’t move reasons for this is tions about what it means to be 24% Bob Gogel, chief executive of out- mation flow, are that outsource pro- CASE STUDY: INTEGREON AND RECOMMIND IT lawyer and where the distinctive sourcing provider Integreon, draws already part and with the times viders are free of character of a firm is to be found. Marketing/creative 22% comparisons with what has been parcel of how legal many of the finan- including web and the technology After all, the topic of the moment – development happening in the financial servic- outsourcers oper- will just be cial obligations and the results of that review were thanks to Richard and Daniel Suss- Business intelligence 16% es industry. As he points out, there ate. The partici- overheads which then used to “train” the predictive kind’s book The Future of the Pro- and research is fierce rivalry between the banks pating firms could left behind hang heavy on law coding technology to initiate a fessions – is how far machines and E-billing and 16% over, for example, the provision of then enjoy the firms, elements concurrent, analytics-driven, artificial intelligence are going to billing process credit cards. Nonetheless, behind benefits of scale or such as the need prioritised review. take over. If lots of firms are using Human 16% the scenes there is an enormous pass the price savings on to clients. for expensive offices, large public With each iteration, the results of the same back-office services pro- resources amount of co-operation through But either way it would be a cheap- relations teams and very expensive human review were used to refine vided by outsourcing companies, Data 14% co-ownership of the agency which er, more efficient way to act, says staff. They are lean and highly fo- the predictive coding engine’s where is the character of the firm security processes the transactions. Mr Gogel. Indeed, it would be the cused with no need for the fancy training to improve the relevance to be found? Secretarial 14% This prompts the challenge that logical conclusion of how to exploit trimmings. of the next suggested document “It really comes down to a question services Mr Gogel now lays down to law optimally what legal outsourcing What is remarkable, moreover, is set and thereby increasing of attitude and outlook,” says Ms Finance, accounting 12% firms. In a nutshell, he is saying, has to offer. the way a growing number of ser- reviewer efficiency. In due course, Stott. “Firms can differentiate them- and data entry put aside your rivalry over things Whether the large law firms will vices are being added to the list. When law firm Ashurst LLP acted as the presence of relevant selves by the way they adopt more Source: Williams Lea/Sandpiper Partners 2015 that do not matter, such as your pick up on this prospect remains to With its roots in activities such as for a financial services business documents in the unreviewed in alleging that there had been set fell to near zero, it became negligence by an auditing company, apparent that human review of it faced a demanding deadline to the remaining documents was not identify key documents from an worth the effort. enormous volume of material. Throughout the review It turned for assistance to there was good co-operation Integreon to provide as many as between the law firm and its 80 legal reviewers for a process legal outsourcing suppliers. of linear review. It also brought in Recommind and Integreon’s data technology company Recommind science and project management to provide an e-discovery platform experts guided the Ashurst legal to apply advanced analytics and, team with regard to technology, in particular, predictive coding to best practices and defensibility. ensure the deadline and disclosure Subsequently when the other requirements could be met. side posed specific challenges, Two workflows were then Recommind’s consultants followed. The Integreon team, supported the solicitors and supervised by Ashurst’s lawyers, barristers in their presentations www.leap.co.uk/cloud 0843 713 0135 | [email protected] started reviewing documents and to the court. 18 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29xx / 06xx / 2016 xxxx raconteur.net LEGAL INNOVATIONXXXX 192

COMMERCIAL FEATURE

Litigation now has value worth investment FUNDING TOP 10 JURISDICTIONS BY NUMBER OF FUNDING INQUIRIES Large corporates are waking up to a new source of finance when there’s no other money to fund a law suit ACCESS TO England and Wales

United States

LITIGATION FINANCE JUSTICE guarantee that it will be within International arbitration RACHEL ROTHWELL budget?’ And of course the GC 21%

can’t do either.” CapitalBurford Litigation funding is opening the way for This is where litigation funding Rest of Europe n the chrome and glass office of comes in. If the claim is a good one, worthy claimants to seek legal redress where every general counsel in every a litigation funder will give a compa- major corporate, there will be ny the cash it needs upfront to bring justice would otherwise be denied Itwo stacks of paper. it. If the case fails, the funder gets Australia On the left is a pile of all the legal nothing. If it succeeds, the funder is claims the company is defending – a paid handsomely from the damages. mounting, teetering tower that must Funding is not cheap because the 13% 48% Canada be constantly attended to, for fear funder has taken on all of the risk. that it will collapse and engulf the But even where the funder claims a hapless lawyer. large slice of the pie, the client will Hong Kong On the right, another tall stack, still have realised some value from but this one wears a layer of dust a case that it would not otherwise and only rarely is the GC’s eye cast have brought. 8% Channel Islands towards it. These are the potential claims that the company could be he decision to litigate or party funding as one of the three bringing against others; for breach not can be a tough one. The revolutionary forces in law in the last Cayman Islands of contract, copyright infringement T merits of a case form only decade, along with conditional fee and so forth. It is recognising part of the deliberation. A potential arrangements and damage based But the claims are not without risk that the litigation claimant may lack the funds and agreements. In 2013, he stressed Singapore and require upfront cash from the has value – this thus be denied justice. Or they may his support for the model, stating legal budget already being drained possess the necessary resources, bluntly: “Where significant groups Source: Woodsford by the defence litigation. The po- is the next big but regard the risk as too great. of citizens are financially unable to tential claims may be strong, but mental shift Losing can be costly. High- gain such access [to justice], one in their current state they have ab- profile cases, such as the action of the most important means by solutely no value on the company’s against RBS in which Herbert Smith which inclusive societies prosper is claims – even large corporations But it also offers nine other funding and would therefore have lost out balance sheet. Freehills increased its estimated missing or at best weakened.” are looking to third-party funding products. These include adverse without third-party help. Whether those towers of paper Ms Dunn continues: “When you fees from £42 million to more than It’s not just the UK which is as a form of cash flow management. costs risks protection, which gives Crucially, the ethos of many exist as a physical reality or simply get funders involved, you still can’t no money to bring them. However, Christopher should be doing that too. It is a real Burford announced in January £91 million, can provoke doubts in benefiting from the innovation. In 2016 we expect third-party claimants a contractual indemnity for investors is more than purely in the mind’s eye of the GC, the ten- guarantee that you’ll win, although according to Ms Dunn, the dynam- Bogart, chief ex- snowball effect.” that it had provided $45 million to even the most confident claimants. Multiple international jurisdictions funding to continue to move into costs in the event of an unsuccessful financial. As Mr Friel comments: ecutive of funding sion between the two types of claim I do think that we are quite good ics have now shifted considerably. giant Burford Traditional funding involves a FTSE 20 company that could be But now litigation funding is a are opening up to third-party the mainstream.” claim, or funding for an after-the- “We are a profit-making enterprise, is the same in every large business. at picking cases. But what you can Whereas Harbour’s first fund, set Capital, which has funders closely weighing the used “either to relieve legal expense recent development in English law, funding and the results have been Part of the reason is the versatility event insurance premium. but access to justice sits at the Even where the head of legal active- guarantee is that if you lose, it will up in 2007, mainly financed claims litigation finance merits of a particular case and budget pressure or for corporate hailed as a solution to the obstacles extremely encouraging. Australia of the model. Woodsford Litigation The merits of a case can be bedrock of what we do and is a ly wants to pursue claims, the barri- cost the client nothing. for insolvent clients, she estimates commitments of deciding whether to invest in it. purposes unrelated to the litigation facing worthy claimants. led the way, and France, the Funding, a pioneer in the sector and assessed as a standalone service principle ingrained in our business around $1 billion ers to doing so can be high. “The client will still need to spend that nearly a third of the clients of its But the industry is both growing matters”. The company in receipt of Third-party investors fund the Netherlands, Jersey and the United founder member of the Association from Woodsford. Its team of by our chairman Yves Bonavero, who Susan Dunn, head of litigation a lot of time on the case – even with third, most recent fund are “names and evolving. the investment has been widely re- case on behalf of the claimant, States are promoting the model as of Litigation Funders, offers a basic lawyers with many years of high- pursues access to justice and human funding at Harbour, explains: funding, you can’t avoid that. But it that you would recognise” – banks, In April, funding giant Burford ported as BT, though this is uncon- either in whole or in part. If the a vital route to dispute resolution. access to justice model covering value litigation and arbitration rights interests in other ventures.” “GCs often recount having the will avoid the uncomfortable con- wealth funds and large listed entities. raised £100 million from a bonds firmed, and the deal gained consid- claim is upheld, the funders take In just a few years the sector has lawyers’ fees and disbursements. experience, plus extensive network He refers to the Bonavero same conversation with their fi- versation with the FD where he is “The GCs are really starting to issue on the London Stock Ex- erable press interest. a share in the success. If the gone from new to normal. A report of contacts among lawyers, Institute of Human Rights at nance director. The GC tells the saying, ‘You told me this would only get it now,” she says. “It is a bit of a change – an example of the extent Neil Purslow, chief investment of- claim fails, the funders lose their by Freshfields on international financial consultants, expert Oxford University, an initiative FD, ‘I’ve got a great claim and cost x amount’.” club, with GCs who will know each to which money is flowing into the ficer at funder Therium, says report- investment and may be liable to pay arbitration remarked: “Alternative witnesses and arbitrators, can shed founded by Woodsford’s Mr we ought to bring it’. The FD has Litigation funding started out by other, and once they start talking sector. Burford, which now has ing of the FTSE 20 deal has put lit- a share of the defendant’s costs. funding is here to stay and not light on the most complex cases. If Bonavero and led by Baroness two questions, ‘Can you guaran- providing a service for smaller com- [about using litigation funding] litigation finance commitments igation finance on the radar of GCs The model offers a route to justice just for small or cash-strapped needed, Woodsford can introduce Helena Kennedy, a well-known tee that it will win and can you panies that had strong claims, but they begin to think, perhaps we of around $1 billion, has largely and finance directors. for claimants too poorly funded or claimants. Already this year we We are a profit-making enterprise, claimants to the right professionals champion of civil liberties and moved away from the single case “Last year we did a deal in which risk averse to pursue a claim. have seen news of an arrangement but access to justice sits at the to handle the case. human rights. The institute aims funding model. Indeed, in 2015, we provided financing for a compa- The impact has been significant. to provide litigation funding to a Class actions can be undertaken. to produce and deploy academic CLIENTS’ BIGGEST BUSINESS CHALLENGES FIRMS’ BIGGEST BUSINESS CHALLENGES only 13 per cent of its new commit- ny against a claim that it had. It did Lord Neuberger, president of FTSE 20 company. This reflects our bedrock of what we do and is a Claimants and their lawyers can research to support the pursuit of Current challenges Challenges five years from now Current challenges Challenges five years from now ments related to single cases, while not use any of the money we gave the Supreme Court, cites third- own experience of handling funded principle ingrained in our business access funding in a variety of ways, justice worldwide. 100% 100% 63 per cent were portfolio deals, it for that; it used it to do another including cash-flow funding and This attitude has won over whereby it invests in a range of a transaction. So we provided it with financing for portfolios of cases. doubters. Certainly the fears that 90% 90% firm’s litigation. venture capital,” he says. Even traditional loans are negotiable. third-party funding would provoke a Burford’s managing director Nick Mr Purslow explains that the firm ESTIMATED CLAIM VALUE FUNDING REQUIREMENT Steven Friel, chief investment rash of spurious claims have proven Rowles-Davies explains that by in question was still under an obli- officer of Woodsford, says: “We false. Funders have no desire to 80% 80% Lawyers Professional funding a book of litigation, you can gation to bring the claim, so that the are only six years old, but already back poor causes, not when their £10.7bn intermediaries 70% 70% start to bring down the high costs funder could be paid from the pro- we are well established in several cash is at stake. As Lady Justice the funding industry is often criti- ceeds, but it carried the cost of the £62.7m domestic and international Gloster remarked when dismissing 60% 60% cised for. litigation itself. Claimants markets, funding cases across the such concerns in 2014: “After all, He says: “If you are funding a port- “This is a more flexible way of £5.7bn Lawyers UK, continental Europe, the US, the aim of professional litigation folio, the risk is lower because you funding. It breaks the link between Australia and beyond. We fund funders is to make a profit out of 50% 50% £60.8m are spreading that risk and you are the money funded and the costs of any type of high-value litigation the litigation, not a loss; they don’t unlikely to get it wrong on all of the the litigation,” he adds. Professional CLAIMS BY or arbitration.” want to lose their money, let alone 40% 40% intermediaries Claimants cases. If you lose the first case, you So the neglected pile of potential REFERRAL Woodsford can produce a long be saddled with a third-party costs will hopefully get it back on the next claims becomes an asset and one £1.5bn £28.3m list of worthy victories, including order against them.” 30% 30% LAST 12 MONTHS one. But if you start losing six or against which money can be raised. helping a divorcing wife gain her Claimants deserve justice no seven, then you are probably in the “It is recognising that the litiga- rightful share of marital assets from matter what their ability to pay or 20% 20% Co-funders Co-funders wrong business.” tion has value and it’s about what £318m £11m a husband keen to shift assets away their appetite for litigation risk. While portfolio funding has been you as a funder can give to the from her, a case against trustees Third-party funding has proved itself 10% 10% around for a few years, 2016 has company against that value,” Mr mismanaging funds on behalf of a critical tool for wronged parties seen the concept taken a step fur- Purslow concludes. “This is the next IPs and other IPs and other the beneficiaries and support for a to take action. It is easy to see why Shareholder Ongoing legal Need for Cost-cutting Increased Lack of Reduced Increased Increased Pressure from ther with some funders providing big mental shift.” consultants consultants small European energy consultant claimants, lawyers and judges are so pressure expenses innovation generally pressure on capital to resources competition need for clients for cash that can be used not just to £126m £4.9m with a $12-million claim hit with a enthusiastic in their support for it. to contain depress from outside legal budgets, invest back to serve or difficulty business discounted legal fees financial counsel staffing and in the firm clients differentiating development or alternative bring litigation, but also to defend Share this article online via $80-million tactical counterclaim. results spending fees it or indeed to use for something raconteur.net Source: Woodsford In each case the claimant would have To find out more visit Source: Burford Capital 2016 else entirely. been unable or unwilling to proceed woodsfordlitigationfunding.com 18 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR RACONTEUR 29xx / 06xx / 2016 xxxx raconteur.net LEGAL INNOVATIONXXXX 192

COMMERCIAL FEATURE

Litigation now has value worth investment FUNDING TOP 10 JURISDICTIONS BY NUMBER OF FUNDING INQUIRIES Large corporates are waking up to a new source of finance when there’s no other money to fund a law suit ACCESS TO England and Wales

United States

LITIGATION FINANCE JUSTICE guarantee that it will be within International arbitration RACHEL ROTHWELL budget?’ And of course the GC 21%

can’t do either.” CapitalBurford Litigation funding is opening the way for This is where litigation funding Rest of Europe n the chrome and glass office of comes in. If the claim is a good one, worthy claimants to seek legal redress where every general counsel in every a litigation funder will give a compa- major corporate, there will be ny the cash it needs upfront to bring justice would otherwise be denied Itwo stacks of paper. it. If the case fails, the funder gets Australia On the left is a pile of all the legal nothing. If it succeeds, the funder is claims the company is defending – a paid handsomely from the damages. mounting, teetering tower that must Funding is not cheap because the 13% 48% Canada be constantly attended to, for fear funder has taken on all of the risk. that it will collapse and engulf the But even where the funder claims a hapless lawyer. large slice of the pie, the client will Hong Kong On the right, another tall stack, still have realised some value from but this one wears a layer of dust a case that it would not otherwise and only rarely is the GC’s eye cast have brought. 8% Channel Islands towards it. These are the potential claims that the company could be he decision to litigate or party funding as one of the three bringing against others; for breach not can be a tough one. The revolutionary forces in law in the last Cayman Islands of contract, copyright infringement T merits of a case form only decade, along with conditional fee and so forth. It is recognising part of the deliberation. A potential arrangements and damage based But the claims are not without risk that the litigation claimant may lack the funds and agreements. In 2013, he stressed Singapore and require upfront cash from the has value – this thus be denied justice. Or they may his support for the model, stating legal budget already being drained possess the necessary resources, bluntly: “Where significant groups Source: Woodsford by the defence litigation. The po- is the next big but regard the risk as too great. of citizens are financially unable to tential claims may be strong, but mental shift Losing can be costly. High- gain such access [to justice], one in their current state they have ab- profile cases, such as the action of the most important means by solutely no value on the company’s against RBS in which Herbert Smith which inclusive societies prosper is claims – even large corporations But it also offers nine other funding and would therefore have lost out balance sheet. Freehills increased its estimated missing or at best weakened.” are looking to third-party funding products. These include adverse without third-party help. Whether those towers of paper Ms Dunn continues: “When you fees from £42 million to more than It’s not just the UK which is as a form of cash flow management. costs risks protection, which gives Crucially, the ethos of many exist as a physical reality or simply get funders involved, you still can’t no money to bring them. However, Christopher should be doing that too. It is a real Burford announced in January £91 million, can provoke doubts in benefiting from the innovation. In 2016 we expect third-party claimants a contractual indemnity for investors is more than purely in the mind’s eye of the GC, the ten- guarantee that you’ll win, although according to Ms Dunn, the dynam- Bogart, chief ex- snowball effect.” that it had provided $45 million to even the most confident claimants. Multiple international jurisdictions funding to continue to move into costs in the event of an unsuccessful financial. As Mr Friel comments: ecutive of funding sion between the two types of claim I do think that we are quite good ics have now shifted considerably. giant Burford Traditional funding involves a FTSE 20 company that could be But now litigation funding is a are opening up to third-party the mainstream.” claim, or funding for an after-the- “We are a profit-making enterprise, is the same in every large business. at picking cases. But what you can Whereas Harbour’s first fund, set Capital, which has funders closely weighing the used “either to relieve legal expense recent development in English law, funding and the results have been Part of the reason is the versatility event insurance premium. but access to justice sits at the Even where the head of legal active- guarantee is that if you lose, it will up in 2007, mainly financed claims litigation finance merits of a particular case and budget pressure or for corporate hailed as a solution to the obstacles extremely encouraging. Australia of the model. Woodsford Litigation The merits of a case can be bedrock of what we do and is a ly wants to pursue claims, the barri- cost the client nothing. for insolvent clients, she estimates commitments of deciding whether to invest in it. purposes unrelated to the litigation facing worthy claimants. led the way, and France, the Funding, a pioneer in the sector and assessed as a standalone service principle ingrained in our business around $1 billion ers to doing so can be high. “The client will still need to spend that nearly a third of the clients of its But the industry is both growing matters”. The company in receipt of Third-party investors fund the Netherlands, Jersey and the United founder member of the Association from Woodsford. Its team of by our chairman Yves Bonavero, who Susan Dunn, head of litigation a lot of time on the case – even with third, most recent fund are “names and evolving. the investment has been widely re- case on behalf of the claimant, States are promoting the model as of Litigation Funders, offers a basic lawyers with many years of high- pursues access to justice and human funding at Harbour, explains: funding, you can’t avoid that. But it that you would recognise” – banks, In April, funding giant Burford ported as BT, though this is uncon- either in whole or in part. If the a vital route to dispute resolution. access to justice model covering value litigation and arbitration rights interests in other ventures.” “GCs often recount having the will avoid the uncomfortable con- wealth funds and large listed entities. raised £100 million from a bonds firmed, and the deal gained consid- claim is upheld, the funders take In just a few years the sector has lawyers’ fees and disbursements. experience, plus extensive network He refers to the Bonavero same conversation with their fi- versation with the FD where he is “The GCs are really starting to issue on the London Stock Ex- erable press interest. a share in the success. If the gone from new to normal. A report of contacts among lawyers, Institute of Human Rights at nance director. The GC tells the saying, ‘You told me this would only get it now,” she says. “It is a bit of a change – an example of the extent Neil Purslow, chief investment of- claim fails, the funders lose their by Freshfields on international financial consultants, expert Oxford University, an initiative FD, ‘I’ve got a great claim and cost x amount’.” club, with GCs who will know each to which money is flowing into the ficer at funder Therium, says report- investment and may be liable to pay arbitration remarked: “Alternative witnesses and arbitrators, can shed founded by Woodsford’s Mr we ought to bring it’. The FD has Litigation funding started out by other, and once they start talking sector. Burford, which now has ing of the FTSE 20 deal has put lit- a share of the defendant’s costs. funding is here to stay and not light on the most complex cases. If Bonavero and led by Baroness two questions, ‘Can you guaran- providing a service for smaller com- [about using litigation funding] litigation finance commitments igation finance on the radar of GCs The model offers a route to justice just for small or cash-strapped needed, Woodsford can introduce Helena Kennedy, a well-known tee that it will win and can you panies that had strong claims, but they begin to think, perhaps we of around $1 billion, has largely and finance directors. for claimants too poorly funded or claimants. Already this year we We are a profit-making enterprise, claimants to the right professionals champion of civil liberties and moved away from the single case “Last year we did a deal in which risk averse to pursue a claim. have seen news of an arrangement but access to justice sits at the to handle the case. human rights. The institute aims funding model. Indeed, in 2015, we provided financing for a compa- The impact has been significant. to provide litigation funding to a Class actions can be undertaken. to produce and deploy academic CLIENTS’ BIGGEST BUSINESS CHALLENGES FIRMS’ BIGGEST BUSINESS CHALLENGES only 13 per cent of its new commit- ny against a claim that it had. It did Lord Neuberger, president of FTSE 20 company. This reflects our bedrock of what we do and is a Claimants and their lawyers can research to support the pursuit of Current challenges Challenges five years from now Current challenges Challenges five years from now ments related to single cases, while not use any of the money we gave the Supreme Court, cites third- own experience of handling funded principle ingrained in our business access funding in a variety of ways, justice worldwide. 100% 100% 63 per cent were portfolio deals, it for that; it used it to do another including cash-flow funding and This attitude has won over whereby it invests in a range of a transaction. So we provided it with financing for portfolios of cases. doubters. Certainly the fears that 90% 90% firm’s litigation. venture capital,” he says. Even traditional loans are negotiable. third-party funding would provoke a Burford’s managing director Nick Mr Purslow explains that the firm ESTIMATED CLAIM VALUE FUNDING REQUIREMENT Steven Friel, chief investment rash of spurious claims have proven Rowles-Davies explains that by in question was still under an obli- officer of Woodsford, says: “We false. Funders have no desire to 80% 80% Lawyers Professional funding a book of litigation, you can gation to bring the claim, so that the are only six years old, but already back poor causes, not when their £10.7bn intermediaries 70% 70% start to bring down the high costs funder could be paid from the pro- we are well established in several cash is at stake. As Lady Justice the funding industry is often criti- ceeds, but it carried the cost of the £62.7m domestic and international Gloster remarked when dismissing 60% 60% cised for. litigation itself. Claimants markets, funding cases across the such concerns in 2014: “After all, He says: “If you are funding a port- “This is a more flexible way of £5.7bn Lawyers UK, continental Europe, the US, the aim of professional litigation folio, the risk is lower because you funding. It breaks the link between Australia and beyond. We fund funders is to make a profit out of 50% 50% £60.8m are spreading that risk and you are the money funded and the costs of any type of high-value litigation the litigation, not a loss; they don’t unlikely to get it wrong on all of the the litigation,” he adds. Professional CLAIMS BY or arbitration.” want to lose their money, let alone 40% 40% intermediaries Claimants cases. If you lose the first case, you So the neglected pile of potential REFERRAL Woodsford can produce a long be saddled with a third-party costs will hopefully get it back on the next claims becomes an asset and one £1.5bn £28.3m list of worthy victories, including order against them.” 30% 30% LAST 12 MONTHS one. But if you start losing six or against which money can be raised. helping a divorcing wife gain her Claimants deserve justice no seven, then you are probably in the “It is recognising that the litiga- rightful share of marital assets from matter what their ability to pay or 20% 20% Co-funders Co-funders wrong business.” tion has value and it’s about what £318m £11m a husband keen to shift assets away their appetite for litigation risk. While portfolio funding has been you as a funder can give to the from her, a case against trustees Third-party funding has proved itself 10% 10% around for a few years, 2016 has company against that value,” Mr mismanaging funds on behalf of a critical tool for wronged parties seen the concept taken a step fur- Purslow concludes. “This is the next IPs and other IPs and other the beneficiaries and support for a to take action. It is easy to see why Shareholder Ongoing legal Need for Cost-cutting Increased Lack of Reduced Increased Increased Pressure from ther with some funders providing big mental shift.” consultants consultants small European energy consultant claimants, lawyers and judges are so pressure expenses innovation generally pressure on capital to resources competition need for clients for cash that can be used not just to £126m £4.9m with a $12-million claim hit with a enthusiastic in their support for it. to contain depress from outside legal budgets, invest back to serve or difficulty business discounted legal fees financial counsel staffing and in the firm clients differentiating development or alternative bring litigation, but also to defend Share this article online via $80-million tactical counterclaim. results spending fees it or indeed to use for something raconteur.net Source: Woodsford In each case the claimant would have To find out more visit Source: Burford Capital 2016 else entirely. been unable or unwilling to proceed woodsfordlitigationfunding.com 20 LEGAL INNOVATION raconteur.net 29 / 06 / 2016 RACONTEUR

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