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If all the paperwork at MUFG’s headquarters in Tokyo’s Marunouchi business district were stacked up, it would reach 17 times the height of Mount Fuji, says Hirotoshi Sato, the bank’s vice-president of digital transformation.
Aside from taking up space, the reliance on paper transactions and records at Japan’s largest lender was inefficient. Then the pandemic hit, forcing the bank to carry out its legal business over phone and email, causing delays and increasing costs.
“Before Covid we could meet with lawyers in person,” says Mr Sato. “We needed to find a way to communicate more efficiently and also protect our data.”
Over the past few months, Mr Sato has worked with a team to solve this problem as part of the FT’s global legal hackathon, which took place online in April and May.
The team’s solution was a blockchain-based system — named Global Collaboration Platform — that allows the bank and its external lawyers to communicate securely and manage confidential electronic documents via a central dashboard.
The hackathon’s goal was to find answers to the most pressing legal, regulatory and civil society challenges emerging from the Covid-19 crisis. Out of 184 projects submitted to date, at least 19 — including the MUFG system — have progressed in terms of development, securing partnerships with other companies and pitching for funding.
Organised by Global Legal Hackathon (GLH), and supported by FT Innovative Lawyers, the FT legal hackathon was a test of virtual collaboration and creativity, gathering 2,700 participants from nearly 70 countries to join teams spanning countries, sectors and disciplines.
The topics tackled at the event included data privacy and contact-tracing apps, access to justice, healthcare and environmental sustainability.
For David Fisher, founder of Global Legal Hackathon, the event demonstrated that the best innovations emerge when global companies with significant resources join forces.
The MUFG team worked with the law firm Morgan Lewis and Integra Ledger, Mr Fisher’s blockchain company, which created the platform’s technology. The team is now refining the platform and adding new features.
“The tech that is being presented is probably going to change the entire legal industry, and it came out of a hackathon — just a friendly collaboration,” Mr Fisher says.
Innovation and security
“The first priority is information security when we use online tools,” says Misaki Suzuki, a colleague of Mr Sato in MUFG’s digital transformation team. She points to security concerns with online platforms such as Zoom and Slack: “The reason we have been using email and phone is [because] we believe them to be very secure.”
“[But] email just wasn’t cutting it,” says Nancy Yamaguchi, a partner at Morgan Lewis in San Francisco, who had been working with MUFG to modernise its operations, and developed the idea for the platform. “We wanted a better way to communicate through a top security-backed single dashboard,” she says.
“It started with the hackathon but became much more than that.”
Before Covid-19, for example, Ms Yamaguchi would travel for work at least twice a month because of the need for security and privacy in meetings with her client.
She hopes the new platform will be adopted by other organisations, but believes there is likely to be resistance. “Not everyone understands blockchain. But the pandemic seems like it’s going to continue for a while so we need to push the limits of what we’re able to do,” she adds.
Assuming business travel does pick up again, making it more environmentally sustainable was the mission of another hackathon project team.
Law firm CMS and hotel consultancy MRP united to create The Greener Token, an app-based incentive scheme that encourages consumers to choose more environmentally friendly hotels.
The idea behind The Greener Token was to enable “travelling without the feeling that you are now spoiling the environment . . . to keep that effect as low as possible”, says Gregor Famira, a partner and hotel specialist at CMS.
“When travelling to London normally I would go to one of three hotels; in future I would probably choose the low-carbon footprint one,” he says.
The team saw how Covid-19 had highlighted the importance of environmental sustainability and wanted to look at how the private sector could help.
The system is similar to a reward programme: users choose from hotels ranked by their “sustainability factor” and collect loyalty points — Greener Tokens — which they can use against the cost of future bookings or receive as cashback. Participating hotels would pay a small membership fee to participate in the scheme.
“We were thinking of addressing this issue with a kick-back solution; so you will get something in return if you invest in sustainability,” says Jelena Bosnjak, business development manager at CMS.
“There is no worldwide standard for hospitality sustainability,” says Jan Hein Simons, a partner at MRP Hotels, adding that a unified scheme would encourage the industry to make greater strides in becoming more sustainable.
The team worked out how to score hotels fairly, how to implement a loyalty system and how to market the scheme. They are refining the business model and hope to start pitching for financing in September.
“We are all in the consulting world focused to do things for the money,” says Mr Famira. “Going out of that and doing something because we believe it should be done . . . it’s just a good feeling.”
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