Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
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60 LEXPERT MAGAZINE | MARCH 2016 tion plan, he says, giving them access to the automated service and general advice in an online portal. Twenty billable hours reduced to two client-subscribers? Automation technology is promising to be a complete disruptor of traditional law firm economics. So why aren't more general counsel de- manding it? Richard Stock in Toronto, the found- ing partner of Catalyst Consulting (and a Lexpert contributor), who advises in-house clients, says it is so new that many don't realize what it can do or the impact it can have on their bottom line. Stock says it's the law firms that are ac- tually taking the initiative in this area as they bid for competitive amounts of work. "I've seen law firms competing on their [au- tomation] ability, saying: 'We can do that better than our competitors without being asked,'" he says. "Typically, the law firms volunteer this as a competitive edge and the client says: 'Oh, we didn't know about that. at's re- ally nice.' It's not the other way around. In this case it's the firms pushing the capabil- ity rather than demand-side driven, with a few exceptions." NATIONAL LEADER, Markets, at Mc- Carthy Tétrault LLP in Vancouver, seems fairly unenthusiastic about document au- tomation. He says it's not the case, it's just that the firm doesn't see automation alone as the Holy Grail because there are better ways to cut costs for clients. "We worked on a system a number of years ago for the automation of certain corporate documents. With all the permu- tations and complexities that go into that, it was a huge investment. e need to have scale on that internally to recover your in- vestment is so big that you just couldn't get there. en all of a sudden the rules would change so you had to redo all the logic. "So we took a different view on it. We decided to treat the whole production of documents as a process and lean it out. Technology and automation is part of it, but quite frankly it's a smaller part of it." What McCarthys does, he says, is build "a playbook" for each piece of work. It then uses offshore foreign-qualified lawyers, many South African, to prepare docu- ments and work with the other side to re- vise them. "If anything is outside the playbook they escalate up to us and at the end of the process we do a quality review to make sure a Canadian lawyer has ensured all the appropriate provisions are there and done properly. "But you've taken out a whole bunch of the Canadian lawyer having to all the middle stuff. And offshore they're using both automation tools, to some extent, and lower-cost labour to do the work as well. ey're efficient at it. ey do it day in and day out." He believes automation can be based on a bloated pretext. "We have a team that does a lot of capi- tal markets work. Some of the legal work for financial institutions involves recur- ring transactions that can involve 15 dif- ferent agreements documents that have to be finalized. "So our team said: 'What if we can consolidate those 15 documents down to something like five?' at in and of itself substantially reduced the cost of doing the work. Our lending people said: 'Why do we have all these different sorts of promis- sory notes that are all the same sort of idea? If we combine it into a single agreement, we can save a bunch of time.' "Automation can be quite rigid. Any- one using automation alone is missing good opportunities. Our experience is there is a bunch of low-hanging fruit you can get to first, before you get to pure doc- ument automation." For the record, while the big banks may be flirting with in-house automation, Pe- ters is not convinced they will eventually cut their outside law firm out of chunks of repetitive work. "Instead of the banks having to assem- ble all this themselves, this is a big oppor- tunity for law firms to leverage the scale that they have, and deliver a solution that will be more cost-effective than the bank doing it internally. at's the way I believe it's going." NICKERSON OF OSLER sees it slightly differently. She expects in-house legal de- partments to build and use their own doc- ument automation programs for certain kinds of things. | IN-HOUSE ADVISOR: AUTOMATION | MARA NICKERSON > OSLER, HOSKIN & HARCOURT LLP The imperative in the legal industry is to streamline our work and work more efficiently. So we're looking for all opportunities where we can push work to a lower-cost resource or turn the work faster.