In many companies, the people responsible for bringing in revenue often have a healthy disdain for the law department, complete with condescending labels. They call it the “Black Hole,” or the “Revenue Avoidance Team” or the “Delay Department.” They all like to tell stories about deals that died when legal wouldn't relent on the terms and conditions and they would prefer never to have to deal with the law department again.
So why not give the people what they want? By leveraging today's technology, some companies allow businesspeople to write their own contracts and other documents with no intervention from the law department. The trend is called “self-service legal.”
The tools used to create self-service legal programs are often called “expert systems.” These systems are designed by the law department to ask the businessperson a number of questions and, based on the answers, automatically and instantly deliver a complete set of deal documents or other information such as a memorandum outlining the legal risks. The system can allow for unlimited flexibility within the parameters set forth by the lawyers who set up the system, which allows the businessperson to negotiate terms and conditions on his or her own.
In some cases, the deal is too complicated or the other party insists on a concession that is outside of the system's purview. In those cases, the lawyers must get involved but most of the time, deals can get done with no direct interaction with the law department. Businesspeople can get their deals done easier and quicker, and lawyers appreciate not getting involved in these more basic matters.
Michael Mills is president and chief strategy officer of Neota Logic, one of the companies behind this type of technology. “For a lawyer who knows the subject matter, this work isn't interesting and it's also not enjoyable. Automation takes a way a lot of the work they don't want to do.” Mills says that the system is designed to deal with the bottom two-thirds of the problems and have the software route the top third directly to the lawyers, with preliminary information already gathered. “At minimum, it saves a couple hours at the beginning of a project.”
Mills describes a typical system used by marketing to clear language for promotions and contests. It asks the businessperson questions for context (such as “is there an element of chance in this promotion?”) and then provides the type of information that would normally come back from the law department: information about what permit is needed, a filled-in permit application, advice on the environment, and terms and conditions. “This type of work isn't necessarily expensive, but it is time consuming,” says Mills.
Huron Legal has built its K-CREATE contract origination tool on Neota's technology. “We build applications for our clients, which helps speed the creation of contracts, reduce costs, and manage the obligations process—all while minimizing financial and legal risks,” says Jeff Catanzaro, managing director at Huron Legal.
The system is sophisticated. For example, some selections or combinations of selections, cause it to react by warning the user of its implications, forcing a conversation with the law department, or not allowing the selection altogether. “K-CREATE enables law department review without direct interaction,” adds Catanzaro.
While a self-service legal scheme can require a substantial upfront time investment, the return on that invesstment from taking the lawyers out of the process can be enormous. The law department has more time to do higher value, more interesting work (or perhaps taking some work back from its law firms), while cycle time is minimized, which allows businesspeople to bring in more revenue, faster—and perhaps even put an end to some lawyer jokes.