Building Loio, an AI-based Microsoft Word add-in for faster legal contract review and editing.
The legaltech market offers hundreds of tools — and counting. However, only a few legal professionals use them, and even fewer know how to utilize these tools to their fullest potential.
I believe it all boils down to the fact that historically, the market has been very fragmented. Structurally, it is dominated by boutique firms and solopreneurs rather than large monolithic businesses. The technological gap between these two categories has been rather sizable. For years, advanced technological solutions have been a privilege of big consulting companies. Other players either didn’t have money to adopt pricey software or didn’t see the need.
But the situation is changing. On the one hand, clients already expect more for less and are even adopting in-house legaltech innovations that reduce the need for external lawyers. Also, a growing number of firms are taking their first steps in digital transformation, which makes their competition nervous. On the other hand, the number of affordable legaltech solutions is growing exponentially, while the perks of their use are becoming more obvious.
Let’s look at some stats. According to Bloomberg Law, 84% of law firms and 63% of in-house legal departments praise legaltech for boosting their efficiency. Also, a third of these organizations say that it has improved their attorneys’ health and well-being and helped them save money.
Generally speaking, any legaltech solution should be designed to take on tasks that do not require legal expertise and education and, instead, give legal professionals a chance to concentrate on more value-adding and satisfying work. According to Bloomberg, 56% of in-house legal departments and 49% of law firms state that legaltech is good at this.
However, you cannot upgrade everything at once. You need to start somewhere. Because the legal industry is extremely document-intensive, I would suggest starting with optimizing your contract review. According to Bloomberg, 57% of law firms and 27% of in-house lawyers globally are already reaping their first results of document review optimization.
How To Get The Most Out Of Contract Review Optimization
Let me start with a little detour.
There are many legaltech tools — whether they are designed for contract review, case management or e-discovery — that showcase their use of machine learning (ML) technologies. ML-powered solutions are regarded to be the best because as of today, this is the most advanced technology available in the market. Yet, however praised and talked about these tools may be, I urge you to be smart about your first steps in the digital transformation of your business.
If you are just starting your journey, make sure you go to the basics first — automate processes that most of your competitors have already automated. Introduce task management and customer relationship management systems (CRM). Buy a Microsoft Word license if you haven’t done it yet. Also, you can reach out to your innovation teams to check if your existing tech can cover your current needs.
This way, once ML-based solutions emerge, it’ll be easier to integrate them with existing tools you already use. Ideally, law firms should have a system of interconnected tools that “interact” with each other smoothly and effectively rather than a set of separate solutions. Managing unconnected solutions may take more time than working without any tech whatsoever.
The same goes for contract review software. If I were a legal professional, I would ask myself three questions before adopting any tool:
• Is my current tool set good enough?
• Do I use basic software used by the majority of lawyers in my field?
• Do I use it correctly and to its fullest potential?
Three yeses means you are ready to switch to something more advanced — like ML-driven contract review tools.
Prior to introducing any tech solution, make sure you have a system to integrate it with. It’s better to have several boutique solutions that work well with each other than an all-in-one solution. Start with a platform that will “carry” the rest of the customizable tools that fit your exclusive needs. Buying a platform has three benefits: It’s more affordable, gives you more flexibility and helps you avoid vendor lock-in (when you commit to using software by a particular vendor).
The same logic works when adopting contract review software. It has to integrate seamlessly with a set of tools you already use to review and edit documents — be it Microsoft Word, Google Documents or any other text editor. Although, in the future, ML-based document review tools are likely to appear in all the places where lawyers interact with a text. Currently, Microsoft Word add-ins seem to be the most popular solution. A lawyer I’ve talked to recently claims to have over a hundred of them.
Choosing the right tool can be a challenge. Although there are advanced solutions that are more flexible and customizable, it’s impossible to create software that will fully fit everyone’s working style. Because contract review software is more of a productivity tool, you should try it firsthand. Until you experience productivity boost yourself, it’s impossible to make a well-informed decision.
This is just the beginning. Currently, contract review solutions can help you understand the document’s structure and determine which parts (such as numbers, names, places, etc.) are missing. Ultimately, they give you an instant map of the contract. In the future, such tools will perform content analysis and show which clauses are absent depending on the type of the contract — and much more.
Today, legal professionals look for a needle in a haystack for hours every time they review and edit a contract. Contract review software is here to show them this needle immediately, thus boosting their efficiency and saving their energy for performing more value-adding tasks to benefit their firm. It’s a win-win.