In 1954, The Westinghouse Electric Corporation unveiled the world’s first colour TV. With a price-tag of $1,295 – or nearly $20,000 in today’s money – the H840CK15 was the type of luxury purchase that stood as a solid signifier of economic success.

‘I grew up in a world where lawyers were among the few middle-class professionals who could afford the latest technology’, comments one senior lawyer at a large multinational bank.

‘Now, we are among the few middle-class professionals that ignore technology. It’s a strange thing that so many lawyers have chosen to overlook the transformative power tech has had on the world of work, and I am part of a growing number of in-house professionals that seeks to address the oversight.’

To rephrase the problem – well-known in economics – why does the cost of technology consistently fall relative to the rate of inflation while the cost of services, encompassing everything from healthcare to education continues to rise?

The answer, in short, is that machines cannot (yet) do what humans do. What machines can do, however, are the things humans do not want to do. From this perspective, technology is not a threat but an opportunity. It allows lawyers to move higher up the value chain. And, let’s be honest, no one wants to be stuck doing low-level work.

‘Lawyers are afraid of technology taking their jobs’, comments Lisa Marcuzzi, general counsel and country counsel for ArcelorMittal Dofasco in Canada. ‘But I don’t know of a single lawyer that feels unhappy that they will have to give up reviewing NDAs or sales agreements. As far as I can see, technology will free lawyers to do the jobs they trained for.’

The wider in-house legal community in the US and Canada clearly agrees. While 90% of respondents felt that technology had disrupted the legal profession over the last five years, and nearly all (97%) felt it would do so over the next five years, over three quarters (76%) said this disruption was a positive outcome for the legal profession.

Far from fearing tech, in-house lawyers are waking up to the freedom it can grant them – 87% of those we surveyed said their wider teams were receptive to the use of technology, while 78% said their businesses were supportive of finding new ways to work.

This widespread optimism, many respondents pointed out, was based on direct experience of available technologies. ‘I spent many years reviewing and negotiating documents that were up to 100 pages long’, commented one general counsel in the finance sector. ‘Typically, 90% of that document would either be boilerplate or unnecessary. If I add up the time I have spent reviewing superfluous material and account for cost then it comes to a shocking level of waste.’

In short, corporate counsel are looking forward to the freedom tech will grant them, and few fear their jobs are at risk. As one respondent commented, ‘The idea that lawyers will be replaced is just not realistic. Imagine a Fortune 500 company dismissing its legal team and saying, “we’ll just rely on technology to do all this stuff.” It won’t happen – it would be insane.’

What will happen is a continuation of the trends that have been in play for several years. The in-house legal team will move closer to the time-critical or economically important aspects of the business, law firms will be brought in to help with the types of matters where it just doesn’t make economic sense to employ a team of internal specialists, and technology will be used to remove a lot of the work that was never strictly legal work in the first place.

Eleanor Lacey, head of legal and general counsel for work management platform Asana, comments: ‘In the knowledge sector, tech never works by replacing people. It works by augmenting people and freeing them up to work on higher-value matters.’

‘There is a great sense of freedom now that we as corporate legal teams can really solve a lot of the problems we have seen time and again by introducing often inexpensive tech fixes. It’s a great time to be working in the legal industry. Anyone who says otherwise is just not seeing the big picture.’

Moving up the value curve

What are the grounds for this optimism?

Let’s take the single most important item an in-house lawyer deals with – the contract. Lawyers deal with contracts. Lots of contracts. So too do their employers. As Chris Young, general counsel for digital contracting platform Ironclad, puts it, ‘At a basic level, all lawyers are contracts lawyers and all the businesses they serve are contracts businesses. It’s the most fundamental unit that commerce is based on.’

In this contract-driven world, the central hub for contract review runs through the legal department. When a business grows, how does its legal department choose to scale? Does it add bodies, or does it use technology to scale up and meet demand?

For the last several decades, the answer to that question would have been the former. General counsel had one demand above all else: more staff. As our survey of legal teams in the US and Canada shows, attitudes are changing, and the answer is increasingly likely to be “new ways of working”.

Central to the evolving skillset of the in-house counsel is getting comfortable with communication. Those we surveyed were clear: documentation can be automated, and any lawyer who is essentially reading a document aloud can be replaced at will. But that, many feel, is a good thing. The rise of legal tech means the in-house team can finally sound like the rest of the company.

‘We don’t need to tell business, “The documents say this”’, comments one respondent, senior counsel at a large US medical services provider. ‘Any literate person can see what the documents say. We’re guardians of nothing but the obvious if we tell them what they can read for themselves.

‘That’s great – being freed from routine tasks is not a case of lawyers being replaced. It’s a case of lawyers being able to use their skills for the benefit of business. We should embrace it. Lawyers have been trained to do some very sophisticated work, but large parts of the contracting process are not that work. If we can relegate that to a system or use technology to complete it then we are going to have a lot more time to do the work that is expected of business leaders. The days of pushing paper around may finally be over.’

Privacy law is a subject that has interested me for a long time. Even as a college student – although I was the paragon of a classic liberal arts major who avoided hard sciences – my best paper was on comparative law issues between French and American rights to privacy. However, it was not until I began working as a lawyer that I started engaging with cybersecurity and data protection as anything other than abstract concepts.

In my early career I was a communications lawyer and a litigator in the cable television and telecommunications industries. These are sectors that have had privacy protections for customer data for some time – in the case of cable television these protections date back to 1984. Working in that field gave me a lot of exposure to communications technologies and helped me to understand how various systems operate, the type of data flowing over them and what sort of information is captured by providers.

When I joined the Department of Commerce as general counsel in 2009, I was aware that privacy and cybersecurity were becoming increasingly important issues. Even before I was confirmed by the Senate, we spent time working on these topics, thinking about what we should be doing. Very early in the Obama administration, after I had deepened my familiarity with the matter, I advocated for action to deal with privacy issues.

The government seemed interested, and the White House empowered me to lead an Inter-Agency Committee to look at this more closely, which led to the development of what ultimately became the Consumer Privacy Bill of Rights Act in 2015. This was a compelling leap forward.

I resigned as Acting Secretary of Commerce in late 2013, since which time I have been a visiting scholar at the Massachusetts Institute of Technology Media Lab and at the Brookings Institution, where I am a member of the Center for Technology Innovation. My work at these institutions follows the ways in which public policy and the law is adapting to the evolution of technology, but also to design better governance for advanced and transformational technologies such as artificial intelligence.

Over the past decade or so, I have been involved in high-level exchanges on artificial intelligence policies among several countries – the US, the UK, Canada, Singapore, Australia, Japan, and also with the EU. Along with other experts, I have been looking at opportunities for stronger international cooperation on this front. The appreciation that such cooperation is necessary has certainly grown over this time, and the channels allowing for inter-governmental cooperation have become much more sophisticated.

My experience in politics and familiarity with legislative processes has undoubtedly helped me in this work – it is impossible to design good governance without appreciating how things get done at a governmental level, how to gauge what is possible, and how to frame issues in ways that speak to members of Congress or to the public.

This is especially important when it comes to topics such as analytics and big data. Because of their ability to discern unique patterns in a data set, or to link one data set with others, these technologies are turning things that have traditionally not been regarded as personal information into powerful and exploitable data sets.

In such an environment, defining limits and setting legal requirements can be more complicated than ever before. There is so much value in data now that society and enterprises have increasingly important interests in how it is used. That is why, even after a life spent in the field, I still consider the legal implications of technology to be among the most important questions we face today.

Chris Young, general counsel for digital contracting platform Ironclad notes that ‘In-house teams used to ask their law firms about technology. Now it’s the reverse. GCs are encouraging their firms to adopt technology, and firms are hearing about the most useful software and tools from their customers.’

For many firms, this will come as unpleasant news. But there is an upside. As Young points out, ‘In-house lawyers will always need law firms, and the industry won’t be transformed by one side alone. The more forward-thinking law firms should see this moment of change as an opportunity to gain a competitive advantage and become a true strategic partner to their clients.’

Judging by the results of our survey, it is an opportunity many have failed to grasp. Under half (45%) of the more than 200 senior counsel we polled for this report said their firms were using technology to deliver legal services and solutions, while a similar number (41%) were unsure how their external firms were resourcing matters.

As one respondent noted, ‘Knowing what goes on at a lot of firms is a game of Schrödinger’s Cat. They may be using some pretty sophisticated software to bulk process our matters, but they are unlikely to tell us about it unless we push them.’

This lack of transparency was widely cited as a source of frustration. Indeed, nearly three quarters (74%) of those we spoke to said they were not satisfied with their firms when it came to technology.

Law firms should take note: 88% of legal teams said it was important that their law firms kept up with developments in technology, with 32% saying it was crucial for them to do so.

We should not place the blame entirely on law firms here. In-house lawyers may complain that their firms behind the curve, but fewer than half (44%) are asking about their external advisers’ use of technology when undertaking
panel reviews.

With so many GCs either unsure of or dissatisfied with their firms’ use of technology, it is no surprise to see that few are looking to them as a source of inspiration. Just over a third of respondents (38%) said they now looked to their firms for guidance when it came to finding or implementing legal technologies, while under a quarter (23%) reported having been advised by their firms on the use of specialist legal technology. Only 21% of respondents said their firms had offered to share technology with them.

This, for some GCs, has been a dealbreaker. ‘One of the factors that motivated me to change firms was the lack of use of technology by my old external firm’, comments the general counsel of a large commodities business.

Of course, the technology used by law firms is often very different to the technology needed by corporate legal teams. Firms tend to operate in scales and volumes that are far beyond the requirements of their clients, making tech transfer a far from simple matter.

Even so, it may trouble those in private practice to know that legal teams are beginning to look for solutions elsewhere. Almost half (47%) of those surveyed said use of technology within the legal team had already impacted their relationships with external firms.

The good news? Law firms that take a proactive approach are winning clients. As Michael Shour, general counsel and secretary of Banyan Software, concludes:

‘If a firm is wise to the implementation of appropriate technology solutions, it can allow them to complete tasks more efficiently and cost-effectively. When I see a firm doing things like this, I can’t help but appreciate that they are driving efficiently for their clients and am impressed that they are on top of things – and that can only be a good thing for business.’