The Legal Ecosystem: Legal Tech’s Impact on Legal — Contracting & Beyond (Part 7)

Topics: Artificial Intelligence, Automated Contracts, Client Relations, Justice Ecosystem: Technology, Law Firms, Legal Innovation

legal ecosystem

This is the seventh part of a series exploring the key players in the legal industry ecosystem and the pressure they are exerting and enduring. The author, Lucy Endel Bassli, was assistant general counsel at Microsoft and recently founded InnoLegal Services and serves as Chief Legal Strategist for LawGeex.

Part 7

There is no denying the fact that technology has been driving efficiencies as a core component of the practice of law for some time. Since the dawn of the fax machine, advancements in technology have slowly but surely been transforming the way law firms operate. As technology in general advances at an astonishing rate, so does industry-specific technology.

Historically, the legal sector has always been slow to adapt to change. Despite this, new legal technology solutions hit the market (seemingly) every day. Some technologies are “better mouse traps” — simply, more sophisticated versions of technologies that already have a space in the hands and hearts of law firms and legal departments across the world. Others are genuinely new solutions to outstanding problems, leveraging the exciting advancements in technology like artificial intelligence and blockchain.

Ultimately, the rise of legal technology can be traced back to one thing: consumers of legal services are demanding more — and they want it better, faster, and cheaper. Legal technology is not only shifting the way law firms and legal departments undertake the business and practice of law, it’s transforming the delivery of legal services and the profession in a very fundamental way.

Effect on Business & Practice of Law

Legacy technology applications have primarily served to make the back office more efficient. That is, most technologies entering law firms before the most recent legal technology boom have focused on driving efficiencies in the operational or infrastructural aspects of law firms and departments. For example, word processing tools have obviously taken the place of handwriting or using a typewriter. From a more modern perspective, rather than manually filling out timesheets and billables in 6-minute increments at the end of each day (or pay period), attorneys have benefitted from more streamlined timekeeping methods for a while now. Administrative tasks like billing and scheduling meetings are also now comfortably done electronically.

Even more recently, electronic signature tools have paved the way for faster approvals, which reduces a lot of friction on its own. History suggests that attorneys seem to have no qualms with improving efficiencies and outcomes of these types of tasks and have been embracing new technologies in the “back office.”

As time goes on, however, more routine “front office” tasks — i.e., tasks traditionally considered “legal work” — are being made more efficient through technology use. Game-changing tech companies are tackling tasks like drafting research memos, reviewing contracts and documents, and responding to discovery. Undoubtedly, more tools are on the horizon. These are the technologies that are causing so much buzz right now, making great headlines about robots replacing lawyers, and legal blockchain solving major operational problems.

Well, let’s just say there is a bit of exaggeration going on. Legal tech is making great advancements, but no lawyers should fear losing their jobs any time soon. Similarly, no one should expect to install a piece of legal tech and expect magic.

I am a big fan of technology and truly believe it is changing the practice of law, though be it lower than some online pundits may have you believe. More importantly, I think that when legal tech is implemented after thoughtful process optimization and smart human resource allocation, it can bring its own form of magic.


Legal tech is making great advancements, but no lawyers should fear losing their jobs any time soon. Similarly, no one should expect to install a piece of legal tech and expect magic.


Hotbed of Innovation: Contracting

There are several areas of legal practice that appear to be getting the lion’s share of attention (and venture capital funding). The one that I find most interesting is contracting. It seems that suddenly the world has woken up to the idea that every company has contracts, and no company has complete control of their contracts. I pick this area of legal tech for a deeper dive because it contains a set of technologies that every company, regardless of size, can benefit from.

Problems related to contracts are common. Most companies have trouble finding their contracts, providing a summary of the terms or obligations in the contracts that they can find, or otherwise simply keeping up with the volume of contract review that continues to grow on the desks of the legal teams. Technology can help with all of these problems. The real challenge is picking the right technology to attack the right problem.

The world of contracting automation is complex and disparate. There are many solutions, offering varying related and overlapping functionalities, with varying degrees of success. To give credit to all the solution providers in this space, the technology is still in early stages in many ways, and often the corporate customer has not done the necessary internal process optimization to enable the technology for its most optimal use.

Contracting technology falls into three general categories, for now: (i) lifecycle management; (ii) analytics and data extraction; and (iii) review. Purchasers of contracting systems can easily become confused by the different types of solutions and some of the features can overlap, creating even less clarity on how to select the right one.

It’s natural to want to solve all the possible issues faced in the contracting process; in order to pick the best solution, however, the buyer must identify the problem they are trying to solve, and then seek out the right solution.

To make it easier when looking for solutions, buyers should understand the three categories, so that they will be empowered to ask precision questions of the potential vendors and be able to hone in on the real strengths of the solutions. Contract lifecycle management (CLM) provides an infrastructure for contracts to flow through from creation through signature. It is a very broad range of features — and naturally, some vendors are stronger at these features than others. CLM systems provides functionality to create contracts by building them from clause banks or libraries; and can walk users through a decision tree to add the right provisions until a full set of terms are compiled into a neat contract template.


It’s natural to want to solve all the possible issues faced in the contracting process; in order to pick the best solution, however, the buyer must identify the problem they are trying to solve, and then seek out the right solution.


On the other end of the process, CLMs are very good at crating searchable repositories for contracts, creating a database of basic (and sometimes detailed) facts about the contract that the customer considers important, such as start and end dates, value of the contract, type of contract, and business division. These systems usually have workflow and rules-driven actions that can navigate the flow of the contract for approvals and then plug it into an electronic signature service seamlessly. CLM systems can be used for the most basic functionality and then enhanced as the processes mature further.

Contract analytics and extraction solutions dive into the contents of the contracts, usually post-execution, to locate pertinent terms and compare them to other contracts. These solutions are common for mergers & acquisitions where large numbers of executed contracts must be researched for specific terms related to the proposed deal and flagged for further analysis by legal professionals. These systems are also great for locating obligations in executed contracts and extracting critical information about deadlines and other time-bound terms, for easier compliance by the business.

Finally, the contract review solutions are the newest to this landscape of contracting automation. There are few solutions in this area yet, as they use advanced technology to automate the legal review of the contracts, as part of the negotiation cycle. These technologies serve as an assistant to the lawyers by flagging provisions in contracts that don’t align to the preferred positions of the company reviewing the contract, enabling the attorney to focus on those disagreeable terms only, rather that reading the contract in its entirety.

This brief primer should set some foundation for those diving into the world of contract automation and set some guidelines. Most important to remember: no solution does everything, and certainly it can’t do everything well. Buyers should be realistic and focus narrowly on a very specific problem to solve or goal to achieve before asking for even the first demo.

Demos always look great! And it’s easy to fall in love at first sight with the technology… but it is very dangerous.