Smart supply chains need legal technology

Out-Law Analysis | 15 Oct 2020 | 9:38 am | 2 min. read

Businesses wishing to bolster their supply chains are increasingly looking to the legal technology solutions provided by law firms to help them do so.

Law firms have traditionally been slow to adopt new technology to transform and improve the way in which they provide services to their clients, but that is changing and increasingly there is an expectation from clients that law firms will use legal technology as a matter of course.

Rice James

James Rice

Senior Associate

The management of its legal relationship with its suppliers is an important part of a business' management of its supply chain

As businesses invest in and adopt technology in order to better manage their supply chains they expect their legal advisers to use technology which will complement the investment being made by the business. The management of its legal relationship with its suppliers is an important part of a business' management of its supply chain. Law firms could be expected to support their clients in a number of ways, including analysing legal risk in historic contracts, providing management information to feed into their client's internal reporting requirements, and playing a prominent role from the outset in the supplier selection process. 

There are a range of legal technology solutions which can streamline all of those activities and more and which can complement the technology being used by clients. The increasing expectation from clients, together with the fear of being left behind by those firms which do embrace technology solutions, should see more widespread adoption of technology and an increasingly innovative approach to the way in which law firms provide their services to clients.  

Many law firms are now using practice management tools which can be tailored to meet the particular requirements of each client. These tools can be used to enable clients to submit instructions using an online portal and then to enable the law firm to provide a quote for that work and then complete any file opening procedures, for example running conflict checks or generating an engagement letter. Practice management tools can also be used to facilitate close working between the law firm and the client by allowing them access to shared e-mail and document folders and by enabling the generation of detailed management information and up to the minute fee updates.  

Technology can also be used by law firms to facilitate document automation. Increasingly AI is being used to create bespoke contracts which can be created by the user answering a series of questions. The document automation then uses those answers to generate a contract which meets the user's requirements. Document automation solutions offer the potential to save a huge amount of time and also cost in the drafting of contracts. Contracts which might previously have been drafted by an in-house legal team or by a law firm may now be capable of being dealt with by the client's procurement or commercial teams. Taking this one step further, technology can also be used to manage the procurement process from beginning to end. Via an online portal:

  • Requests for proposals can be issued, responses collated and the supplier can be chosen;
  • the contract can be drafted, revised and shared by both sides;
  • internal approvals can be obtained; and
  • the document can be executed by both parties and archived.

Litigation is the one area in which perhaps law firms have more fully embraced legal technology solutions and particularly in relation to predictive coding. Predictive coding involves the use of an algorithm which learns, from the lawyer, how to rank the relevance of documents and then uses that learning to determine which documents are most relevant for the purposes of document disclosure. This can lead to significant time and cost savings.   

The challenge for legal technology is to overcome the reticence of lawyers in embracing change whilst keeping pace with the technology advances in other sectors so that it remains both relevant and innovative.