As the heart of a bureaucracy that sets rules for 28 EU states, Brussels is a good place to observe the complexities of completing a big international deal.
Fiona Carlin and Gavin Bushell, partners at Baker & McKenzie in the Belgian capital, saw how large mergers and acquisitions for international companies required the clearance of antitrust authorities in multiple countries. This adds a layer of regulatory difficulty to big deals; the prolonged reviews of multiple jurisdictions are costly and time-consuming.
Ms Carlin and Mr Bushell proposed a solution: a digital tool that could identify the antitrust issues for any deal. Since being launched in September 2014 the Global Merger Analysis Platform (GMAP) has been rolled out to 300 of the firm’s antitrust and competition lawyers worldwide, enabling them to provide a detailed analysis of the key risk in M&A deals within hours rather than what previously may have taken many expensive days.
The tool is an example of how law firms are using high-tech services to aid their work. According to groups such as Axiom, Pinsent Masons and Foot Anstey, the reasons to adopt such new technologies are obvious: as clients look for value for money, lawyers are increasingly aware that digital tools can also create efficiencies in their own work, speeding up previously laborious and repetitive tasks, while also serving to spotlight errors.
In the search for marginal competitive gains, firms are embracing practices and techniques that have transformed other industries, whether it is big data — finding better ways to deal with the enormous mass of information their organisations collect — or cloud computing, which allows employees to share and store documents over the internet, or even artificial intelligence, with smart computers able to “think” like humans to complete tasks.
In the case of Baker & McKenzie, GMAP has collected data related to merger controls in 135 countries. Clients can be given a tailored report within a couple of days that analyses the risks attached to an international merger.
“GMAP has transformed the way we handle the M&A process for our clients,” says Sam Mobley, Baker & McKenzie’s head of global antitrust and competition. “What would ordinarily have been a highly complicated, arduous process requiring a significant amount of due diligence has been streamlined to deliver clarity, simplicity and, crucially, cost and time efficiency.”
Nick Koberstein, division counsel at Abbott Laboratories, the global healthcare company advised by Baker & McKenzie, says: “These tools are critical for my position. I need to quickly analyse a transaction and advise my management on the potential risk associated with the deal. Anything that can help me get the job done easier and faster [is invaluable].”
Another highly ranked law firm, Pinsent Masons, has shown its entrepreneurial side by launching and being the majority owner of Cerico, a compliance solutions business. Companies must comply with a vast range of rules on issues ranging from bribery and corruption to health and safety, with substantial penalties if they fail to implement suitable strategies. The platform provided by Cerico allows them to ensure employees and suppliers can undergo regular, rigorous compliance checks in a fast and auditable manner.
The platform also allows companies to keep a gift and hospitality register, an important tool for staying ahead of complicated new laws surrounding corporate bribery, as well as elearning tools that allow employees to take training courses online on issues such as competition and health and safety.
“There are other offerings in the market but we found these to be relatively expensive, anonymous and loath to have any amendment to their template content. The Cerico team is excellent — very driven and very customer and deadline-focused,” says Anthony Stanitsas, former legal counsel at Aggregate Industries, the construction company and a Cerico customer.
Such innovations are not the preserve of global firms. Foot Anstey, a regional firm in southwest England, has used software by Thomson Reuters, the business information provider, to create a digital conveyancing tool. One benefit of the system is automatic generation of conveyancing letters. The time taken for each has been cut from 90 seconds to two seconds — a difference that adds up, given the firm produces more than 80,000 letters a year.
But despite these individual advances, persuading law firms to adopt new technologies can be an uphill struggle. The FT rankings are dominated by tools that improve efficiency and can be adopted quickly by lawyers who immediately understand the need for them.
A survey of chief information officers at European legal firms by RSG Consulting, the legal consultancy that is the FT’s research partner for the Innovative Lawyers series, found the vast majority did not believe their firms used available technology enough, the reasons being a lack of investment in IT talent and — almost inevitably for a centuries-old profession — a resistance to change.
Rise of the machines
The fast-developing technology of artificial intelligence is creating quite a buzz, from Google’s self-driving cars to digital assistants that could replace secretaries. But surely it is unlikely to disrupt the livelihoods of highly skilled workers such as lawyers in the same way?
Wrong, say experts such as Richard Susskind, a legal futurist, who warns that complacent law firms face big changes. “Until the economy fell off a cliff most people in major law firms and indeed in-house counsel were quite happy to continue working the way they had done for a couple of centuries,” he said last year in a presentation on the potential impact of artificial intelligence on the legal profession.
The threat — or opportunity, depending on your standpoint — to the profession comes from recent developments in this technology. Companies such as Google are working towards “general AI” systems that can make connections and interpretations from information in order to make independent decisions and predictions. This would make them able to “think” like humans. Even lawyers.
Prof Susskind predicts the “decomposition”, though not the death, of the legal profession, with traditional jack-of-all-trades legal jobs being split into several distinct roles. Many of his suggested jobs carry titles more befitting a tech start-up than a law firm: legal knowledge engineer, legal technologist, project manager, risk manager or process analyst. Tomorrow’s barrister or solicitor is likely to be part software engineer, part lawyer, he says.
This is not pie-in-the-sky thinking. Students at the University of Toronto were asked to find a useful application for IBM’s Watson, the cognitive technology famous for answering trivia questions on television show Jeopardy. They came up with Ross, a legal research service.
Lawyers ask Ross legal questions, which it answers by sifting through huge quantities of legal documents, cases and legislation. Ross’s answers are sophisticated: they include legal citations and links to articles for further reading. Because Watson has the ability to learn, Ross refines its responses based on experience.
Such a tool could do much of the work that has been left to junior lawyers — work that, as billable hours, has traditionally been profitable.
The Toronto group plans to launch a company that offers Ross’s services. Soon law firms, instead of hiring swaths of new lawyers every year, could be far smaller entities that outsource all but the trickiest work to a computer.