New rivalries emerge as law firms race to innovate ahead of GDPR deadline

New regulation is often said to stifle business. The opposite is happening for legal services providers in response to the General Data Protection Regulation (GDPR), which will kick in next year.

The GDPR changes how companies that do business in Europe can share and store personal data. It is also providing a glimpse into what a legal services market looks like when alternative providers compete head-on with law firms. Both are harnessing technology to help clients stay away from the teeth of the data privacy regulation: a fine that can be as large as 4% of a company’s annual revenue.

Orrick Herrington & Sutcliffe has launched a complementary online interview tool powered by HotDocs that lets companies ‘stress test’ their readiness for the law. DLA Piper has made an app that allows users to download the text of the law onto a phone. Hogan Lovells’ app, meanwhile, asks seven questions of its users to determine a basic understanding of their readiness for GDPR. (Of the three, Orrick’s is the most advanced.)

Meanwhile, alternative legal services provider Axiom Law has developed what it hopes will be a more end-to-end product. Axiom’s solution uses artificial intelligence to review contracts; provides a staff of human lawyers to negotiate new provisions; and guides their work using a GDPR-specific workflow management system. Consilio, the e-discovery and document review provider, wants clients to know it has tailored its document review technology product for the GDPR.

These kinds of non-traditional, client-facing products are still relatively rare among law firms. Much easier to find are more typical solutions such as brochures explaining what the law is and practical handbooks to help companies ensure they are compliant.

There are at least two good reasons for legal service providers and law firms to invest in technology in response to the GDPR. One is the scale of the regulation. It affects nearly any company that holds personal customer data on European customers, which in today’s economy is basically all of them. Axiom says companies in the Fortune 500 and FTSE 100 alone will spend more than $1bn on contract analysis to comply with the law.

The other reason speaks to why the GDPR may be a sign of where the legal services market is headed. the type of legal work required to adjust to the GDPR can be assisted by a technology that has recently made large strides in efficiency and quality: automated contract review.

Mathew Lewis, co-head of Axiom’s global banking and regulatory practice, expects his technology will analyse “tens of thousands if not hundreds of thousands” of contracts for GDPR clients. He says the technology has been trained to identify data privacy-specific terms and can trim down the number of contracts lawyers need to spend time changing. In that way, it’s a cost-saving tool.

“GDPR is unique in that it is really broad in a way a lot of regulation has not been,” Lewis said. “But it’s also that the tools have got better over the last 12 to 18 months.”

At Orrick, the online interview tool has been used more than 60 times since its September launch, said Kolvin Stone, co-chair of the firm’s cybersecurity and data privacy team. Including a manual version of the interview process, Orrick has had discussions with more than 250 clients, Kolvin said. The interview template, which is dynamic and produces a custom report for users, took six months to develop.

The broad range of companies affected by the law has also led to the tool being used across multiple practice groups. More than 55 of the firm’s lawyers have been engaged with the tool, across 16 offices and from 12 practice groups.

The success of the product is growing interest at the firm to invest in other technology solutions in the coming months, Stone said, with the firm considering hiring developers to help with that push.

“You’re pulling intellectual capital and putting it into technology for a number of people to use,” Stone said. “That’s a model I think we’re going to follow going forward. It lends itself very well to GDPR, but within Orrick we’re looking at ways to develop that across other areas.”

The Orrick story is an example of how firm management can help bring about change by investing in successful technology-based legal products. It is also why firms should cater to forward-thinking partners and let them invest time upfront in building these products. Once the tool is built, sceptical partners can be swayed by the tool’s benefits as a business development tool.

Stone said more than 50 partners have sent the interview tool to clients. After a partner sent it to a venture capital firm, the client forwarded it to a number of its portfolio companies. That led this week to Stone crafting a proposal to do GDPR work for those firms.

“It has led to many engagements that we otherwise wouldn’t have,” Stone said


Written by: Roy Strom

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