Boston Legal Innovation Meetup and "Tech-Enhanced Legal Services"

Last Thursday July 18^th I attended the 2^nd Boston Legal Innovation Meetup, hosted at the Suffolk University Law School and sponsored by that school’s Institute on Law Practice Technology and Innovation (“SILTI”). Adam Ziegler, former Goodwin Procter associate and now start-up innovator at Mootus, organized the event, titled “Tech-Enhanced Legal Services,” and featuring a broad range of experienced legal innovators. (Bob Ambrogi covered the first event).

I am pleased to see this series of meetings get organized, and am also very happy to see legal innovation / legal technology programs launched at two Boston-area law schools. In addition to the program at Suffolk, which started in the 2012-2013 academic year, my former Bingham McCutcheon colleague Dan Jackson is directing a program called “NuLawLab” at Northeastern School of Law. These programs join only slightly more established programs at Georgetown Law School (see the ILTA KM Blog on Iron Tech Lawyers) and at Columbia University, inter allia (Richard Granat identified 13 such programs in May 2013.)

My understanding is that Adam and the other organizers are looking for ideas for future meetups. Contact him at LawInno , the hashtag for the event going forward is #lawinno. 

The meeting showcased Andrew Perlman’s Google Glasses; document assembly expert Marc Lauritsen; document assembly vendor Terry Lee of Exari, and LawWithoutWalls Miami University professor Michele DeStefano. 

Google Glass At Work

The meeting started off an appropriately geeky note. SILTI’s leader Andrew Perlman demonstrated Google Glass, the mini-computer masquerading as a chunky pair of eyeglasses. Once the Bluetooth connection to the projector was set up he demonstrated voice commands, taking pictures, taking video, Googling the next Red Sox - Yankees game and Googling images of Niagara Falls. It also has built-in messaging and, appropriately for wearable computing, can provide turn by turn directions to Quincy Market.

He proposed several uses for this technology in legal academia. He'll be using it in his legal teaching by providing another way for students to ask questions.  He proposes that they could also be used in a legal clinic where the pretend client would wear Glass and record the law student taking the "client" interview. 

In legal practice, he suggests that another possible application would be to use it to record a deposition and have a Google Hangout going where other lawyers view the deposition and make suggestions through Glass, potentially saving client spend on lawyer travel.

The Document Assembly Landscape

Marc Lauritsen next spoke and gave a sweeping overview of the document assembly, automation, and management area, its past and future. Marc teaches "Lawyering in Age of Smart Machines" at SILTI and has his own document automation consulting operation, and is a very well-informed practitioner of this art.

Mr. Lauritsen analogized the recent history of document assembly to the "Cambrian Explosion" that led to a wild diversity of primitive marine life 500 million years ago. There was a comparable explosion of document automation companies over the last fifteen years; the market remains small in comparison to the market for legal technology generally, but has matured in terms of the number of players.

Document automation includes creation, analysis, and management of documents. Document creation includes power drafting and auto assembly.  Analysis might include disassembly of clauses within an document, or validation, or meaning extraction. Document management might include storage and tracking of the documents themselves, or of the legal obligations therein.

Mr. Lauritsen mentioned that the remaining document automation vendors cover a wide range of use-cases:

·         Content Bundles such as Smokeball (for small law firms)

·         Legal Services—LawHelp (there is huge latent demand for intelligent legal documents serving middle- and lower-income people).

·         Automated Legal Reasoning—Neota Logic

·         Document Analysis / Benchmarking—KM Standards

·         Software Management-style Document Assembly--CommonAccord

Going forward, Mr. Lauritsen suggested that there will be innovations in collaborative online drafting, with intermixture of freeform drafting and Q & A. Computers might suggest reuse of a clause, or might raise an alert when a drafter attempts to define a term already defined. The growth of interactive systems will change the nature of practice. (Ed.—his thoughts here reminded me of Kasparov's notes about computer-assisted chess, where amateurs working with three weak computer programs were able to beat grandmasters playing without computers as well as the most powerful chess-playing computers playing alone).

Are we free to code the law?

Mr. Lauritsen has recently written on the legal implications of online legal software. Should it be suppressible as the unauthorized practice of law?  Mr. Lauritsen has forcefully argued that it should not.

A Vendor’s Perspective On Document Automation

Terry Lee spoke about the development of a successful document automation company, Exari. While I knew that Exari is a serious competitor in the law firm document assembly market, I confess I was surprised at the extent to which its services have been adopted outside of legal organizations such as law firms, and at the major drivers for its adoption.

Exari started out in Australia, then it went to London; then the big banks realized they needed auditable ways to create documents.  They work with 15-20 of the largest firms, but their clients also include large banks which use Exari for onboarding documents and the like. The prime driver is auditability and control rather than efficiency (though it is more efficient).  Most of the time lawyers are involved, but the market has expanded well beyond law firms and legal organizations; They've automated non-disclosure agreements. 

A collaborative portal allows two people to work on a document at the same time.  There's been some talk about collaboration at the industry level. Exari is all .xml behind the scenes. It is all browser-based, with creation, editing, and approving documents all possible through iPads and the like.

Mr. Lee described a typical adoption process for Exari. It might start with in-house lawyers using the forms; then lawyers getting the people in the line of business to use the forms; then the line-of-business people getting the corporation's clients or vendors to fill out the forms. 

Document automation in smaller firms is often integrated with practice management software.  Exari doesn't itself provide practice management software or target smaller firms.

Exari has partnered with Vermont Law School to develop a course on how to use document automation; they've hired the first person to come out of that program. 

Who Should Innovate? Legal Practice vs. Legal Education vs. Legal Vendors

Prof. DeStefano founded the “LawWithoutWalls” program at the Miami University School of Law.  She has a very unusual background with a combination of non-legal advertising experience, legal practice, and academic excellence.

She suggested that legal educators and legal practitioners are blaming each other for the legal industries’ failure to innovate and meet clients’ 21^st century needs, with questions like “When are legal educators going to train young people to be 21st century lawyers?” and “When will practicing lawyers start to innovate?” Rather than mutual finger-pointing, she argues for cooperation between the academy and practitioners to develop young lawyers and legal technologies that will meet future needs. She calls for more permeability between law providers and law schools, and also law-related service providers like Exari.

An example of that permeability is her program’s partnership with the international “Magic Circle” firm Eversheds, where that firm provides funding and expertise and obtaining opportunities for its lawyers to work with legal innovators and law students. She believes that an LPO will likely partner with a law school. 

Despite vast and continuing improvements in technology, there will still be economic activities like litigation funding that people with law degrees will be able to do better than others. 

Prof. DeStafano acknowledges that we don’t know what the entire range of future legal careers will be. How can we train lawyers for jobs that haven't been created yet? She suggests that students need to learn higher-order skills such as cultural competency or creating a business plan through attempting them, though they may fail at first.

Networking & Next Event

As can happen at meetings with a lot of bright people from diverse backgrounds, the chance to chat in small groups afterwards was one of the most enjoyable aspects of the event. I talked to a former Microsoft in-house counsel (who was friends with my University of Michigan law school roommate), a solo practitioner who is moving into coaching startups on IP issues (and who blogs), Suffolk Law School deans, an experienced elder law attorney; and others.  My thanks to Suffolk for the generous donation of space and after-event food.

The next Boston Legal Innovation Meetup will be hosted by Northeastern School of Law on Wednesday September 11, 2013, and is titled “Legal Design: What Can Lawyers Lean From Design Thinking?” The event is public; simply obtain a meetup account and join the event (and group). 

ILTA KM Webinar "An Insider's Guide to New Corporate Drafting Tools"

ILTA KM Webinar "An Insider's Guide to New Corporate Drafting Tools"

These are my notes on today's webinar, developed by ILTA KM Peer Group steering committee member Mary Panetta. The all-star panel provided a coherent and thoughtful look at the challenges of corporate drafting and some innovative new tools that improve corporate drafting, which only recently have begun to be used in law firms.

Formal Description:

Drafting is one of the core activities of a corporate lawyer. For years, the standard approach to drafting has been largely manual: gather sample documents, read them side-by-side to determine their similarities and differences, copy useful provisions, and then edit the draft agreement to make it appear as if it was drafted by a single writer. Now, however, there are several technologies that can help expedite and even automate key parts of the drafting process. During this session, attendees will hear an overview of the corporate drafting process, various drafting challenges and the tools that can assist with these challenges. In particular, we will look at two relatively new tools, Exemplify and KMStandards (formerly KIIAC), both of which promise to make the drafting process easier and better. Finally, we will introduce an approach to developing a business case for obtaining drafting tools.

Speakers:

· V. Mary Abraham of Above and Beyond KM

· John Gillies, Director of Practice Support Cassels, Brock & Blackwell LLP (and author of a five-part series on enterprise search on the ILTA KM Blog). 

· Meredith L. Williams, Chief Knowledge Officer at Baker Donelson

Why focus on corporate drafting?

Abraham:  Corporate drafting takes a lot of time.  It applies to business transaction practices, as well as real estate.  The extensive time taken to draft has a real impact on turnaround time and can harm knowledge sharing within a practice.  Firms want to constantly improve the quality of their drafting.  Practitioners can minimize risk by bringing a more disciplined approach to corporate drafting. 

What is the range of corporate drafting?

Abraham:  A vast range of documents and agreements are produced by corporate lawyers.  Kinds of documents such as opinions, memoranda, agreements, and organizational documents, are only high-level categories of documents.  Each kind will require an organized approach to drafting. 

Gillies:  One logical structure for corporate drafting is to look first at the type of document (agreement / memo / opinion); the type of agreement (employment agreement / partnership agreement / purchase agreement); and the category within an agreement type (e.g., an employment agreement for a senior executive / manager).

The process and issues for drafting a particular type of agreement can also be structured in logical form from highest / broadest categories to the particular and minute issues. In the press of time we too often accept the structure of a good sample. Clients are better served by assessing and developing an optimal logical structure for articles and clauses. Language for each clause needs to be developed, ideally the "most conforming" language. Each clause also needs to be assessed for completeness and functionality. Final editing passes for substantive and copy editing also need to be done.

Williams:  Technologists implanting corporate drafting technology should sit down with corporate practitioners to understand their drafting processes. Three key functional areas for a corporate drafting attorney are 1) Research and precedent selection, 2) Drafting & Customization and 3) Review.

Evaluate tools by how they fit into these three functions.  Tools may fit in multiple areas.    

New Tool:  Exemplify

Williams:  Exemplify [Ed. -- which I reviewed here in September 2012] is a web-based tool.  Exemplify has been rolled out at Baker Donelson to all of its attorneys. You start by pasting text into the tool. The tool compares your language against public EDGAR documents. It shows you additions and variations from your text. One really valuable feature is the ability to drill down into language specifically drafted by a specific law firm. 

Strengths & Weaknesses

Exemplify can help you review specific language, but will likely not help you develop your own knowledge management standards or products.

One benefit is that it is not hosted. No IT resources are required. Attorney training has been very limited, less than 10 minutes. Junior associates and senior shareholders alike have taken to it in certain practice areas that can leverage EDGAR documents. 

 They've found that Exemplify generates great efficiencies because it cuts down on reviews of public documents to determine "what's market."  Comparing against market also reduces risk.

 It's best when it's used to analyze one provision at a time. Pasting in multiple provisions is possible but doesn't work well when used extensively. 

Exemplify is a startup, a new company, another potential weakness.

New Tool:  KM Standards

Gillies:  KM Standards (formerly kiiac) works with a specific set of documents that a law firm submits rather than a vast set of publicly filed documents. If you "feed" it 65 documents, it will generate a standard set of clauses and lets you compare a given document to that set. It graphically indicates the degree of agreement between your (or opposing counsel's) draft and the standard.  For instance a "legal remedies" clause might be completely novel or different, indicated by a small red bar next to that clause. KM Standards also indicates clauses that *don't* appear in your agreement but that appear in most other agreements of that type. 

KM Standards can be used to develop a checklist of essential elements of an agreement. Checklist development normally is a process of polling a certain set of lawyers. Lawyers tend to remember and flag specific issues that arose during various deals. One module shows the frequency of occurence of various clauses.

Strengths & Weaknesses

It can be used to generate contract standards or model agreements much more quickly than was possible before. KM Standards can compare many more agreements and clauses than lawyers can handle individually. The benchmarking and checklist creation modules are very helpful. 

KM Standards is also web based. KM Standards can be, however, hosted on a firm's servers. It has a much more complicated user interface than Exemplify (for instance).

KM Standards has comparable risk reduction benefits to Exemplify. The tool has continuously been improved for the two years that Mr. Gillies has been using it.  The "base documents" can be exported to Word but it does not generate properly formatted drafts.

Each template is a standalone document; KM Standards does not generate a clause bank or library.

Abraham:  Exemplify and KM Standards do different things.  There is some overlap but they do very different things.

What is the business case for the new tools?

Williams:  Build out the exact business problem. Clients are asking for more efficiency and want their lawyers to produce commoditized or semi-commoditized documents faster. Define the problem in terms of specific requirements rather than generally "we need help drafting."

Feature requirements desired might include drafting time reduction, partner review time reduction, increase negotiation leverage, minimal cost, low attorney training, and updated content. 

Show scenario planning for getting tool 1, tool 2, or no tool. 

Make a business case by how it will affect attorneys day-to-day.  Break down a "day in the life."  Identify how the functions they are performing today will change with the new tool.  For instance, how would benchmarking provisions against a market standard change?  Attorneys will cringe simply on being presented with a new tool. Sell it to them with respect to particular tasks with which the tool can help. 

Comparing The Tools

Where Exemplify "comes with" the EDGAR collection, KM Standards requires private collection, or also can leverage documents collected from EDGAR. 

Mr. Gillies mentioned that one issue with a private collection using KM Standards is the possibility of ethical walls or confidentiality agreements limiting which attorneys at the firm might be able to access certain agreements.

Exemplify does not keep or cache the language that you paste in to the tool.  KM Standards is provided sample agreements and you need to rely on an NDA. 

Where Exemplify targets individual clauses, KM Standards starts by analyzing whole documents.  KM Standards does a little more and is correspondingly more complex. 

Williams:  Exemplify "is a benchmarking tool" primarily. Its key function is to aid analysis and drafting of specific clauses.  It can also reduce risks of repetitive document drafting, at low cost and resource demands.

Exemplify requires minimal KM team support.  KM Standards will typically require some KM support, depending on which features you intend to use. 

Gillies:  KM Standards allows one to quickly identify the "most standard" model for starting a draft.  The more detailed analysis is required, the more KM support may be required.

The key value proposition was improving the KM team's ability to generate precedents. 

Abraham:  Highlights Ken Adams's blog Adams on Contract Drafting and two Cassels Brock resources on drafting tips and style guides.  Gillies highlights Butterick's Typography for Lawyers book as a means to improve drafting for clients not just other lawyers.

How can you measure the purported improvements in efficiency, risk management, and quality?

The panel kindly took my question, posed through the webinar Q&A.

Gillies:  He's reviewed readability (Word tests) on KM Standard-produced documents, and has found that readability scores tend to be quite a bit higher. 

 
Abraham:  You could develop risk reduction assessment by visualizing the degree of variance initially within a firm's document collection "before" standards implementation and "after." 

Williams:  They will compare time entries for time taken to draft certain matters for drafting at six months in. 

Clause Reference and Creation Tool Exemplify

I met with George May, Bill Bice, Rob Anderson*, and Shannon Brown Janicki of legal technology start-up Exemplify on August 29th at the ILTA 2012 conference (see other coverage of Exemplify's launch here).  Exemplify is a large firm solution that leverages the massive "EDGAR" database of corporate filings in order to improve the speed and effectiveness of attorneys drafting transactional documents.  This post is based on a demonstration of the product. I should note by way of disclaimer that I have not practiced as a transactional lawyer, although I work on systems and precedent collections on negotiated litigation documents such as stipulated protective orders and settlement agreements. 

*I thought I had met Geoff Petrie but I was mistaken. 

Overview

Exemplify is, I believe,  a new entry in the set of legal technologies intended to assist transactional document generation.  It is a browser-based clause reference and creation tool that compares clauses you provide with clustered iterations of standard clauses created by dynamic reference to the agreements contained in EDGAR.  Its admirable stated goals are to allow a more junior associate to develop a better draft of a transactional document faster, and to allow quick comparison and evaluation of clause language against market and against language from particular firms, financial institutions, or industries. It works at the clause level, a design that matches the way I understand corporate attorneys approach most drafting tasks.

How It Works

Exemplify starts with an empty box in a browser.  You paste in a clause or multiple clauses from your proposed agreement.  It then compares each clause you provided against the model from EDGAR most similar to the one you provide, and provides a redline against your agreement for each clause.

To get to the next closest iteration of that clause you click an arrow, the application constantly showing a redline against your original clause.

It works against a huge database developed by reference to EDGAR documents that aligns thousands of similar clauses from a huge variety of documents.  It has an initially clean and simple interface, that gets only a little more complex as the attorney digs into clause development.

As you work through clauses you can save them and so by the end of clause development work have a complete document ready to be pulled into a document management system and developed into a very good first draft.

Once you are working on a clause you can filter on metadata about the hundreds or even thousands of agreements from which the clause iteration appears. The law firm filter may be most significant for negotiators, but drafters can also filter on financial institution, date, parties, and industry.

Implications For Traditional Drafting Process

An associate creating an initial draft of a transactional document might typically do the work by finding four or five samples; tracking down the particular clause at issue in each; comparing the langage between each; and then copying and modifying the language that best suits the particular deal context.

In my view, Exemplify ought to eliminate time associates normally take to find matching agreements and the matching clauses within them, and ought to also greatly reduce the time spent in reviewing and comparing clauses.

It also should greatly reduce the time taken to find a version of a clause that meets your circumstance (for instance, does the agreement address a Letter of Credit). 

Comparison with Existing Approaches

Substantive KM Resources 

Firms with knowledge management programs have developed libraries of transactional documents and related resources.  Laboriously created annotated forms show associates what the "firm standard" clause is for specific circumstances such as buyer-favorable, seller-favorable, and neutral; memos and articles may provide more information about the context of language changes; and meetings and trainings provide additional opportunities for associates to learn directly from skilled practitioners.  In addition to information about clause language, KM resources often provide practical and strategic advice in context, as on negotiation or proper redline provision.   

These KM resources provide more context and depth than Exemplify can. They have two limitations that Exemplify does not:  they do not necessarily reflect what is "market," and they are not updated without additional input of senior attorney time.   Because of the necessary investment, they are typically  targeted at a particular categories of common documents, where Exemplify will pull in whatever documents are publicly filed regardless of their frequency. I can imagine that Exemplify might help a transactional KM attorney work faster, by putting common clause variants at the attorney's fingertips, with the attorney supplying experience-based understanding of the reasons for the different variations.  

Document Assembly 

Traditional document assembly products help attorneys quickly draft one or more legal documents (typically transactional documents) through automated questionnaires that "fill in the blanks" or provide options leading to the program incorporating or excluding specific clauses from the finished document (for a publicly available example, visit my firm's Founder's Workbench site, which will assemble papers for incorporating a Delaware corporation).  As with Exemplify, what results is a much more advanced draft than what is possible with "mere" reference to a single sample.

Development of the document assembly "template" that contains the language options and the like, however, is very challenging and time-intensive, requiring high-level legal knowledge about a document's logical structure and some ability to handle the complex software involved.  Templates are developed through laborious reference to existing firm and individual lawyer standards,  and may also refer to clause language from outside the firm.  Document assembly templates do not dynamically refer to the set of documents out in the market.

kiiac

Kingsley Martin's kiiac application reportedly greatly improves the speed of developing document templates, but kiiac must be "fed" a large corpus of documents and itself is a complex piece of software not as easily accessed and leveraged by practicing attorneys (I have seen several demos but have no hands-on experience with this tool). Generating a comparison against a given clause requires many more steps. kiiac is complementary with document assembly in that it can show template compilers the standard variations within a subset of a firm's documents.

kiiac is also not tied into EDGAR, which means that it must be fed a document set or corpus and that it can cover all transactional document types, not just those addressed through publicly filed EDGAR documents

kiiac does, however, provide statistical analysis of all variations at once and a "checklist" of all possible clauses, two features Exemplify largely lacks.  It clusters clause options by the degree of frequency rather than by their similarity to presented language.

West KM Transactional

This Thompson Reuters product automates the breakdown of internal transactional documents into clauses and provides some level of profiling of transactional document type as well.  It allows quick location of sample language, but does not conduct the type of comparison of clauses that is found in KIIAC or Exemplify.  West KM Transactional relies on a firm's own documents. 

My firm has West KM for litigation.  This tool is in a way parallel to Exemplify in that it shows the validity of cases and statutes referenced in a firm's internal briefs by drawing on the massive and frequently updated Westlaw KeyCite system, (showing, for instance, red, yellow or "citing reference" flags) where Exemplify assesses a given clause by comparing it to  the massive and frequently updated EDGAR database of transactional documents.

Summary Chart

If you compare the transactional document source with the primary function of these tools, you might get a summary chart that looks like this.  

External Agreements	EDGAR	Exemplify
Internal Agreements	West KM	Document Assembly	KIIAC
	Shows Clauses / Documents	Creates Documents	Show & Compare Clauses

Document Assembly; Standard Approach and The Future

This is another presentation report, my notes from a KM peer group meeting.

Document Assembly is a "hard nut to crack." It is one of the ways however that lawyers can greatly increase their productivity.

Enterprise search, document assembly, contract analysis, and proofreading are all key ways to increase productivity.

At one firm financial industry registration changes and a large amount of anticipated work led them to develop a document assembly package for the new registration forms their clients needed. A few attorneys were able to set up a tool that did a lot of work. One lesson learned was the necessity to set up at times complex processes to maintain document assembly packages. There may be either too high expectations or "blaming the application" for errors introduced after the documents had been generated.

It was a successful effort in that the efficiency gain made it possible to do a lot more work. It was easy to change the model, and quality control was improved. It's not "last deal done" sample use any more. The KM lawyer is very happy to have document assembly in her tool kit.

Joshua Fireman of ii3 looked at the KIIAC application (discussed by Peter Krakauer at the ILTA conference). It assesses the variations and extent of variation of agreements. The firm he was working with delivered over 100 share purchase agreements. The tool deduplicated and determined that there were "only" 55 unique documents. One document was identified as the "most conforming." The fourth on the list was a bar association standard form. The firm KM lawyer went through clause-by-clause and assessed which version would work better. It took him 4-5 hours to figure out KIAAC and another 4 hours to develop the purchase agreement model. Almost every clause included links to most-commonly used variant clauses.

Joshua thinks that KIIAC has some document assembly features but also has a strong quality component. You can compare documents against the "KIIAC standard." The tool can not just develop a model or document assembly package, but can also greatly reduce the time to turn around effective comments on a document received from other counsel. (I had not thought of this use, which further demonstrates that I am a litigator by nature not a transactional attorney).

KIIAC is a tool designed to be powerful rather than user-friendly. PSLs or KM attorneys might use it to set up document assembly but practicing attorneys would not use it that way. Perhaps PSLs could use the tool in the analytical "other counsel" scenario. This can position KM as a real competitive advantage. KIAAC may not be able to deliver a final model, but it can save tremendous amounts of time in the development of such models. It can generate a decent quality model or document assembly package in a very reasonable period of time.