The Impact of Technology on Legal Departments

Made with speech-to-text software, so a few words may be off.

0:00Welcome to another episode of Contract Heroes, the show where our guests, and sometimes us, provide best practice recommendations on all things related to contract management. Hi, everyone, and welcome to another episode of Contract Heroes, where we're not the heroes, our guests are. Today on the show, we've got a good one for you. Colin Levy is joining us. Uh, Colin is the, uh, director of marketing and business development over at WordRake, and also, uh, plays a large, uh, role and has a, a large voice in the, uh, the legal tech community. Uh, today we're gonna be chatting around some, some general ideas when it comes to contract management, as well as legal tech in general.

0:54Uh, before we dive in, I just wanted to turn things over to Colin, uh, let him give you a bit more information on his background and, and we'll take it from there. Thanks very much. It's a pleasure to be here. Uh, so in terms of my background, um, I had been a lawyer for the last 10 years, uh, prior to joining WordRake, uh, and over that period had worked for a variety of different companies, including a startup company, including a bunch of different tech companies, and a global manufacturer. Uh, and over that time I focused on corporate transactions, which taught me a lot about contracts, contract management, and the ways in which technology can really assist with that. Uh, and through that, those work experiences, I have started to write and speak about technology and how it is impacting the practice of law, the business of law, and how it can help, uh, lawyers in the legal industry be more client-centric. So thanks again for having me. That's great, Colin. So before we start to get a little bit deeper on the legal technology, tell me why you decided to focus your experience on legal innovation. Sure. So for me, you know, a lot of the impetus for that focus came from my experience. Okay. Um, and in, you know, prior to law school I worked for a big firm, uh, as an IT paralegal creating litigation databases.

2:21And so I was using technology in the, in the, in, in law before law school, so I figured, you know, surely in law school I would learn maybe a little bit about these tools. Lo and behold, I didn't learn a damn thing about any of those tools- ... in law school. It wasn't really talked about at all. Uh, and I found that, um, disappointing to say the least. Uh, so then when I graduated from law school and started to really learn how to practice law, I was constantly astounded at how little technology was being used by lawyers, when so many other industries were making a great use of technology and were kind of just seeing it as just another tool in the toolbox. So I wanted to start learning about people who were trying to change that dynamic and s- and were trying to either create technology for use by lawyers or in the l- legal industry and/or people who were trying to teach lawyers how to use technology. So I started writing about my experiences talking to those people, started interviewing them.

3:18And, and since then I can't get enough of it, and I've been dedicated to inspiring and informing others about legal technology and legal innovation. Of course. And you talk about something very i- interesting, and it's even as of today, even one year after COVID, there's still a lot of lawyers that still use Windows 95 tools, and that's it. They only use M- Microsoft Word with track changes, email, and maybe some other document management platform, or just like a cloud storage, like Dropbox or Google Drive. But that's it. And it's, it's, I think we have similar background because I also was, uh, working, uh, not, not, not with companies, but when in, in law firms. And there's something that you gotta understand, right? Because this technology is not going to, going to solve everything in your work. The first thing is like you gotta think about the process. There are different kind of processes, even if you work in law firm.

4:16And inside a law firm, people that work in tax work p- completely different than people that work in corporate or in M&A, capital markets, whatever, and also inside the companies, right? And it, and I think that, well, after one year that, uh, of COVID and then that people and companies need, need to digitize all their operation, th- this has become of an essence in just, just for continue working. Because otherwise if you continue working using like the normal piece of paper and trying to get everything approved in personal, things are not gonna work, right? Yeah. Yeah. You know, it's, it's interesting. I think that the pandemic in some ways has forced a lot of law firms and lawyers to adapt to using at least some basic technologies. Uh, but it, as, as far as I'm concerned, I think it remains to be seen in terms of what other long-lasting impacts there are post-pandemic upon the industry in technology.

5:16But all that being said, you know, I certainly think that technology can be, uh, very useful in making your life easier and allowing you to be more productive. But as, as you said, it's not gonna solve every problem. It may not even solve the problem that you're trying to solve. So you really have to start with not just your processes, but your people as well. Understand how they work, what their level of comfort with technology is, and where they're coming from, and then look at how they play a role in the processes that you have. And then once you've looked at those two things, then you can possibly start looking at technologies as a solution, but it's not a panacea. It's one set of tools that could be useful for you, but it may not solve your problem or all of your problems, but it certainly could help. But it's important to understand what your problems are before you start looking at solutions. Yeah, yeah.

6:07And, and I think, Colin, I mean, that's usually, you know, when we're talking with folks too, that's really what we recommend. I mean, you gotta have your ducks in a row before you go out there and you, you start to look at different types of software applications or, or you're gonna be more y- more overwhelmed than you would be even, you know, I mean, people get overwhelmed even when they do understand their processes and, and, and what they're, you know, going out there to look for with everything that's on the market today. So I mean, you know, let's say that an organization has done that, right? They understand what they're looking for. They, they, they understand their processes. Maybe they have their, their workflows kind of written out. I mean, what, what t- pieces of legal technology, um, you know, obviously contract management, maybe let's put that, put that on the shelf for now, but what other pieces of technology do you see that are out there that are, are really making an impact, um, for, for in-house legal teams today? So one of those, I would say, is sort of a group of just add-ons for, for Word.

6:57There are a lot of tools out there that simply integrate into, into Word or Excel that, that most lawyers already use that can help either automate documents, can help edit documents, can help, um, review documents. Uh, so there are a lot of tools out there that can make Word even more powerful than it already is, and quite frankly, Word itself has a lot of built-in functionality that a lot of lawyers and a lot of people in general don't take advantage of that can make your life a lot easier when you're styling and formatting documents or what have you. So I certainly think there's a lot to be said for starting with the simple things first before moving on to the more complex. Yeah, absolutely. Yeah. And right, and, and I, I gotta say that I was reading a couple days ago one great interview that you done with the president of, of Clock. Uh, and I think there's a lot of opportunity there from in-house department and also law firms to start using this legal operation methodology, right, in their systems, right?

8:03Because, uh, I mean, uh, what do you think about this, uh, this kind of methodology and their impact right now? Because I, I think it will be like, like a good start point, right, before, before going to a technology, like understanding the processes and this kind of methodology, and especially Clock, I think it's doing a great job globally on educating, uh, in-house and also law firms, departments in, to innovate their operations. What do you think about that, Colin? Yeah. So I would say that legal operations is becoming a very vital part of any legal department for a variety of reasons, um, many of which were covered in that interview that I did. Uh, one of those, I would say, is the ability to kind of better optimize your existing processes and also better integrate those processes into the larger operations of the business as well. Because I think for a long time, legal departments have sort of operated as sort of their, an island unto themselves- Exactly... and haven't been very connected to all the other functions.

9:07And the w- way I see legal operations being is legal operations is that bridge between the legal department and the larger business and making the legal department be more of a business partner and a resource to the rest of the team and a, and a team member, rather than just being sort of a go-to problem solver when you have a legal problem, which is sort of the more traditional approach that I think companies have taken with law departments and law departments have taken with businesses. So legal operations, I think, plays a huge role in allowing for better insight into the business as a whole and educating the legal department and the legal department educating the business on how things are operating and aligning them all together so that they're all working seamlessly in terms of using tools, in terms of budgeting, in terms of processes. So there's a lot to be said for having folks who can kind of be those guiding lights, if you will, with regards to making all those functions work well together. Yeah. Yeah. That's, I think that's, that's great.

10:06And, and I love that analogy there, Colin. I mean, you know, and I think a couple years back when, when we had sales ops, you know, uh, c- start to, to be a part of organizations, I think they kind of played a similar role and, and I think it's even more important when it comes to, to legal departments inside of, of organizations because like you said, they, they were kind of a, an island. They were a standalone unit and, you know, and everybody always kind of referred to them as a, as a cost center. Uh, and I think that, you know, now that we're really truly starting to understand the role that legal plays inside these organizations, because tech has, has given them the ability to run reports and, and show their value and show that they're not just costing the organization money, you know, they're saving the organization a ton of money, and I think that's where the benefit of, um, any type of analytics that a system has that, that can quickly and easily pull these different reports for, for the higher-ups inside of a company to really see the value of legal. I think that, you know, that's, it's great to finally see that these organizations are, are starting to place value not only on legal, but also on, uh, the legal ops team to be that bridge between, uh, different parts of the organization.

11:10Yeah, absolutely. I think there's, you know, you touch upon, I think, a really important point there, which is deriving actionable insights from the data you have at hand, which can be either in your contracts or in other documents, and it's really important, I think, for legal departments to be able to make use of the data that they have on hand to show their value, uh, as opposed to being thought of just sort of as a call center where they're just trying to minimize risk. Minimizing risk is, is certainly a part of the legal department's role, but there are other, other roles I think the legal department can play, certainly in terms of allowing for the business to see better data about the contracts that they have with businesses, about how their businesses, um, about how their contracts are operating, and perhaps hidden risk in their contracts in terms of upcoming financial obligations, uh, prior risks that have been agreed to, or certain provisions that often come up as, as roadblocks to getting deals done and could be revenue blockers. So there are a lot of different ways in which data can be used, I think, to show value and be, uh... and, and allow for a closer partnership between the legal department and the larger business as a whole Right.

12:21So Colin, you, you have a lot of experience working in, uh, contract management with different, uh, type of companies. What would you say are like the biggest pain points or main bottlenecks in, uh, in the contract management inside any, any company? So there, there are a number. I would say one o- one issue prior to execution of agreements is version control, uh, because you're sending documents back and forth, back and forth, and everyone has a different way of naming them and dating them. Uh, so it can be very painful to keep track, and time-consuming also, to keep track of all the different versions. So that's one area that can be very, uh, useful to, for... that can be, um, addressed by contract management. Another is storage of the agreements themselves, having one central place for all of them to be, so that if you need to search for, you know, how many agreements do we have that are of this type, you can quickly find out how many you have and what types of customers they're with. Uh, another pain point I would say would be commonly used clauses or language in agreements.

13:24You know, I've often been asked in prior roles, "Hey, yeah, we have that agreement with that company and we use that really good language for, I think, that indemnification provision. Can we use that language here?" Well, if without a contract management tool in place, you kind of are manually looking for that contract, God only knows where it is, and then hopefully being able to find that language. Uh, contract management tools can really assist with that as well. And then the last bit, I would say, which ties back to my earlier point about data is, contract management tools can allow you to derive a lot of actionable data from your agreements through reviewing them, through collection of information, and from essentially reviewing the agreements using algorithms. So, you know, I would say there are a lot of different benefits of contract management tools, but you kind of have to understand and be clear on what your goals are prior to looking for a contract management tool because of the fact that there's so many out there right now. Right. Right, and, and Colin, I mean, have you been a part of, of any of those purchasing processes at organizations where they went from, you know, using manual methods to, to onboarding a, a new CLM tool?

14:27So I've been a part of a couple pro- a couple pieces of that. One, uh, I worked for a legal startup where we were developing, um, a contract management tool ourselves. Uh, and then I worked for another company where we were, uh, building our own tool in-house, but through the use of consultants. Uh, and I think part of the reason for that was trying to save money and not purchase a tool. Uh, back then there were far less tools out there. So in some ways it was understandable, the approach we took. Uh, and I also have been part of the process in terms of looking at potential tools as well at another company. And certainly, you know, cost is definitely a factor, but another big concern that comes up all the time is implementation in terms of- Yeah... how easy is it gonna be for this thing to get up and running, and how much time and effort is involved in getting to that point. I think sometimes there's a misunderstanding, either on the lawyer part or on the vendor part, in terms of exactly what's required.

15:21Because a lot of lawyers, I think, often think that a contract management tool is just gonna work perfectly right off the bat, when often it's the case you have to feed it a number of contracts before it's gonna start providing benefit for you, and that can take some time sometimes. And what about the companies when they, they, they decided to build it themself? How did it go? So I did not. I left before I saw it fully through. However, the early goings, it was going slowly, but it was going fairly well in the sense that we were really testing it out with users and really trying to figure out, okay, how, how does this look like? How do we wanna design the interface? Um, and it was really a learning process in terms of both how to design the tool, but also the limitations of the platform that we were using to build the tool off of as well. And that's, I think, another component that, uh, is often, I think, not understood well by companies that are trying to build tools them- in-house, is that your choice of platform, in other words, kind of the guts of the system, can make a huge impact in terms of how effective the system is gonna be.

16:27Right. Especially- Yeah... because every, every company has a different, uh, process. Like, everybody has a different contract request process, uh, approvals, uh, contract templates or whatever. So i- in case that you wanna build your own... I mean, of course, price might be a challenge most of the time when you, when you wanna have a very robust platform. But at the end, like, when you're building a platform from scratch, it's not that easy, right? And, and especially when you're trying to, uh, take, uh, different people on board, like lawyers think in a way, and then programmers think in a way, and that may cause some, some, some friction there, right? Because lawyers... I've, I've heard this a couple of times with some, uh, some of our clients, right? Yeah. Like, so I want that the platform just, uh, gives me this, and then I want a, a bottom that I, if I click it, it will do this and that.

17:24And it thinks like, people, uh, usually think like it, it can just happen like, uh, like magic. But now when you turn to the programmers, they have, like, a completely different mindset. Like it's, everything is very logical. You have to set rules. You have to do a, a lot of things before having a platform, uh, operational. So it will take time. It will, of course, it will take, uh, money. And, and I, and I, and I will think it, just going back for a while, we were talking, like, there's a lot of things that you can do before looking for technology, right? Like you, you can start looking for, um, uh, automations. Maybe just on couple of workflow or, or at least process. Just having everything mapped so it's easier for you to monitor what happens prior the signature of document and post signature, right? So, uh, my, my next question for you, Colin, will be like, so what happened afterwards when they, when they decided to, to go with one of the softwares that, that you were looking?

18:27Do, do, do, do you think there was a change or, uh, or where, what were some of the main benefits? So I think, uh, you know, it's, it becomes pretty clear when you purchase a system, you know, the flaws in your existing process. 'Cause if a system, you know, is, at least the goal is for it to fit into the process that you have in place. Right And if that process isn't optimized at the beginning, at the first place before you look at the tool, the tool's gonna just make that process worse. So in my experience, uh, the one time where we did have a tool that got purchased and then was made part of the, the existing process, it exposed some flaws we didn't necessarily see right off the bat. Because you, you sometimes overlook things and don't realize that there are some, that there are flaws until you actually start using a tool that basically does as it's told, and then you realize, "Oh, wait. Actually, this is not how we want something to operate." So I do think there is, you know, there is that danger.

19:29And to your earlier point about lawyers and, uh, technology people not always speaking the same language- Right... I think it is increasingly important for there to be people who can kind of connect the two and/or people who can speak both languages, quite frankly. I think we're seeing a rise in the number of lawyers who have some degree of tech fluency that can be very useful in terms of being able to bridge the gap there between people who are pure programmers and people who are so-called pure lawyers. I don't think that's gonna be a- ... a thing for much longer. Uh, but there definitely is, I think, an increasing need for lawyers to be fluent in technology. And in fact, there even is a rule now in, I think, over 30 states have adopted it, this rule of tech competence, being able to be aware of and competent in the existing technology that can help you as a lawyer do your job better, more productively, and, uh, in, in terms of better meeting the needs of your clients. Right. Yeah. I mean, you don't ne- you don't necessarily have to code, right? Maybe if, if you wanna start a software from scratch, maybe that would be useful, but at least understand the technology.

20:35What, what can you do, right? Some of the basics so it's easier for you to communicate with tech people. Right. Absolutely. Yeah. No. You know, the whole, whole, you know, needing, must learn how to code, I don't think that that is necessarily what's required at this point, but certainly being able to understand the technology that, that are out there and having some degree of knowledge about ones that could possibly be helpful for you and helpful for your clients as well, I think is definitely necessary. Yeah. Yeah. And, and I, you know, I mean, Colin, and, and again, Pepe, I mean, as, as we know, you know, a lot of the, the CLM tools that are out there in the market, I mean, they're codeless now, right? They're a little bit easier to use, but I mean, it still does take some, some training on how to use- Right... the tool. Um, but, but you know, I think that a lot of organizations, and especially, you know, our, our goal after an implementation is to make sure that these legal teams, you know, have somebody inside that's gonna be able to make these edits to the system, right? They don't, they don't, we don't want them to be running back to us every time they wanna change a workflow or change a print template or something like that.

21:35So, you know, I, I think it's definitely important to, to have folks on your team that can speak both the legal language and the technical language, and I, I think that that definitely is, is a key when choosing an implementation partner, uh, you know, on these types of projects, is you need to make sure that, um, you do have somebody in the middle there that, that kind of can, can balance both sides of that equation to make sure that, you know, you're, you're getting everything that you want, but you're also getting best practices out of it to make sure that the system's gonna, gonna function the best way it, it possibly can. Yeah, absolutely. There's, there's definitely a, an important role for people who can, who can be that bridge, not just in terms of allowing implementations to work, but also in terms of allowing for, um, the expectation to be set appropriately. Uh, because I think that's something that's really important, uh, is allowing for the lawyers and the technology people to be on the same page in terms of their expectations of how things should roll out, how things should operate, and how things are gonna be going from day one.

22:39And how s- how to use the data, right? Because, I mean, that's one of the main points there. Like, okay, so you don't want to have contracts now in your archives, because, I mean, they're just a piece of paper, but what can you do with that information that is inside there, right? How can you manage that information, and how can you help other departments to work more smoothly, right? And in case, not just... I mean, you don't need to have automa- automation tools, like document automation tools in order to start. Maybe you can start by contract design. Maybe the clauses are just too complicated, because the people that are going to read the contract after it's signed, it's procurement, or it's, uh, people in, well, compliance. There are a lot of l- of, of lawyers there. But let's say other departments, right? Sales or whatever. If, if, if, i- if you have a clause that is just a paragraph that takes, like, one piece of paper, and it's just back and forward and have no idea what it's going to mean, what, what does it really mean, I mean, that's going to convert into a huge bottleneck when you start negotiating with your, with your, with your counterparty.

23:50And that's, and that's a way how, how you, you can start, too. Yeah. Yeah. It's definitely, you know, you s- you definitely speak to, I think, an important issue in, in contracting, which is something that always kind of struck me as odd, which is that, you know, the lawyers draft up these contracts, and they understand, you know, the different clauses in it. But the people who actually are tasked with following through in terms of obeying the clauses, half the time they don't know what the hell half the contract says. They just know a few key business clauses, but the rest of it, they have no idea what it says. And because they don't know what it says, they don't know how to comply with it, so they're just assuming they're complying with it, because the lawyer said it was okay to sign off on. And so that's really, you know, I think something that requires more consideration, is how you're designing these agreements and how you're writing them. Uh, just because, you know, you have a fancy vocabulary and all these different words you can throw in there, should you really be using them when your salespeople are the ones gonna be the ones following through on the agreement's terms? I'm not sure that's the case.

24:54You know, it's, it's really important for, I think, lawyers to keep in mind readability of agreements, of documents, of pretty much anything that they write that are gonna be used by clients. Because the clients are the ones that need to understand it, not just- Yeah... you, the lawyer. Yeah. Yeah, and, and, you know, and, and Colin, we had a great first... Our first episode was actually with, with Dennis Potemkin, and, and this was the whole point of our conversation, was that, you know, legal design is, is something that can be done before they start to look at technologies. And, and it definitely helps to make sure that, um, it's an easier place to start, and it, and it's a simple place to start without really spending too much money. Maybe you bring in a consultant to, to kinda help with these things, which is something that Dennis specialized in, but, but it doesn't mean that you need to go out there and, and buy this huge, complicated system i- in order to get started with, with technology. Yeah, you- Right... you don't need it. You don't need it. That, I, I think you know what will be, like, good exercise? Like, posting in LinkedIn or any other platform clauses from contracts, and just ask people that are not lawyers, just try to explain what does it mean and if it's, and if it's easy just to, just to read it and to understand it. Because, I mean, if you're not a lawyer and you start seeing these kind of clauses and you're not used to this kind of language, it just, it's, it's impossible, right? Yeah. It's, it's a total nightmare. I mean, think about it.

26:19We all agree to a lot of different contracts during the course of our lives. Do we read all of them? No. In fact, do we read even a third of them? Probably not. I mean, for those of us who use Apple devices, Apple has this huge terms and conditions document that you have to agree to any time you upgrade your software or get a new phone or whatever. Do you read it? No. Of course not. Are you gonna understand it? Probably not. Have I read it? Yes. Have I understood it? Yes. But I'm a lawyer, and I'm weird like that. Um, but most people do not, nor should they have to. Um, you know, I, I think there is definitely something to be said for making contracts, uh, more easily readable, understood, and quite frankly, easier to negotiate too, because some of these provisions are just so convoluted that even the lawyers themselves have trouble working their way through it because of the either ambiguity involved or the use of words that contradict one another or what have you. So, you know, contract design, I think, is a really important area worth, uh, more attention and, and more thinking about. Right. So, uh, one last question, Colin. So I know that, I mean, the legal education, it might take a really core part on this tr- uh, on this innovation on the legal industry, but being re- realistic, this might take a while.

27:42I mean, it's gonna take a while that a lot of l- of, of law schools are going to incorporate some of legal innovation, uh, uh, topics or subjects or whatever. And, but let's say for people that have already done it, right, that are maybe just early graduates, and where would you recommend to people that i- e- that, that is interested but have no idea where to start, where can they find, find information about, uh, legal operations or, uh, legal technology that you would recommend? Sure. Well, selfishly, I'd recommend my own, my own website, colinslevy.com, where I've interviewed a lot of leaders in the, in the field. Um, for those interested in legal operations, uh, Clock is definitely the place to go to.

28:34Uh, for those interested in other types of, um, in other areas of legal technology, you know, LawSites blog, uh, is another good website that, uh, reports on a lot of developments, um, as is, uh, Artificial Lawyer. Um, and there are a number of other websites, and you can pretty much just... Honestly, you can Google legal tech, and you'll find probably too much information, actually, about it. Um, the real trick, I think, is gonna be distinguishing between kind of the hype and the myths that surround technology and the reality of it. Uh, and that's something that I, uh, am constantly striving to do, is cut through the hype and kind of present a realistic picture of what legal technology is, what it isn't, w- the current state of it, and where we're going. Right. Right. Great. Yeah, that's... No, that's awesome. I, I think that, you know, a couple of our listeners out there would definitely be interested to, to, to get some more information.

29:26And I, and Colin, I know that you, uh, you kind of already plugged your website there, but we usually wrap up and, you know, if, if people wanna connect with you and, and they wanna learn more about what you're doing, um, w- you know, where, where can they find out more about you? Sure. So, uh, I'm easily found on LinkedIn. Uh, I'm on Twitter, clevy_law, my website, colinslevy.com. Uh, I also have a Facebook group as well, uh, Notes from the Front Lines of Legal Tech. Uh, so I can be found at all those different places, uh, and I welcome anyone who wants to connect and learn more. Great, great. I think Pepe and I are gonna have to join that Facebook group. But, uh, but yeah, hey, thanks, Colin. Yeah. This is, this has been awesome. And, and thanks to all our listeners for, for listening to another episode of Contract Heroes. We'll have you, uh, have you back here in, in a couple of weeks for another episode, and hope to see you then.