Discusses his efforts in introducing technology to his legal team, the challenges of selling the value of legal tech investment to the businesses, and the ethical considerations that come into play when adopting new technology.
I think technology in the in-house department is not an option anymore. Because, as you know, all companies are cost and profit-driven. So, at some point, the question will be on the table: 'What is cheaper for me' or 'What is more efficient for me?' To have an in-house department, or just to go find a law firm and try to push down the prices? So, I think the technology will give us, as in house lawyers, more possibilities in order to argue that it's a good idea to have in-house lawyers. I think every company must start to interact with these new technologies to try to develop an idea or a practice to use that. In my case, of course, I'm trying to bring these new technologies and ideas and be open to the market but, otherwise, I try to bring on board young lawyers with these new ideas, who of course can contribute to the development of the legal department.
We deal a lot with in-house software that manages the areas of litigation, arbitration and conflict management. We focus on these areas because of the amount of litigation that we have. For example, in 2009 there was a drop down of oil prices and, as we are a construction and maintenance company, we had to let go of many people because some of our contracts were shut down. That brought us over 100 cases of litigation. So, taking that into account, and also that we have almost 1,200 active suppliers at the moment, we need to find a way to manage this and try to be more strategic.
We have been working in this project almost two years, I believe. At the beginning, there was a lot of data mining. We tried to obtain as much as data as possible from all our contracts and litigation: the value of the litigation, the name of the parties to the contract, the duration of the contract, the purpose, scope and everything else. We did all of this data mining and uploaded it into the software.
At the moment, the software gives me an idea of when, according to the data, is the most proper moment for me to settle. So, this technology gives me all the tools to make a decision and, of course, to manage this big amount of issues.
Before five years, the only contact with technology from our legal department was the cloud and the files' source. We PDF'd and scanned all the documents and uploaded them, but there was no 'correct' way to manage them. In case you wanted to search for a specific file, there was no way to do it. You needed to spend five or ten minutes to find it - if you found it.
The first challenge was to try to obtain budget. It's not common for in-house - maybe for firms it's trendier - but for in house, it's quite new to have this managed software, and it's newer that you want to create your own software. So, trying to sell the idea to the CEO in order for them to see the benefits that it eventually will bring to the company was really hard. But I can say for sure: today, they can see those benefits and the company is willing to invest more in software within the legal department. Our software was obtained through our in-house IT department, and we spent almost two years working closely between them and our legal department to create this software.
In terms of ethical issues, I'm not sure if you're aware of this - in Mexico, when you have a labour case, mainly it's because the former employee feels that he was entitled to receive a bigger compensation. Some cases, they are right; some cases, they are wrong. But that's purely mathematics. Even if they are right or wrong, my duty as a head of legal is to see the best interests of the company. So, there are some cases that they are right in asking for these extra compensations. But the software might recommend that I can settle with them for a lower figure that they are entitled to. So, that is the ethical issue. Because in some part, I want to, and it's my duty with the company, and on the other hand of course, I want to be fair with the former employees. So, that is an ethical issue that I am seeing as a result of this software.
Right now, we are planning for next year to add a new part of the software for insurance management, and also for customs management. For customs, we often import the vessels, and our import permit might be valid for six months, seven months, one year or ten years. You have to renew that permit or you will be fined. So, we are thinking to add this part to the software, in order to have a reminder previous to the due date in order for us to renew the permit. Regarding the insurance, it's the same. We cannot have our vessels or operations without insurance, so the idea is to create these new parts of the software to manage that.
Both external lawyers and in-house teams have to adapt to new processes. But, at some point, we ask for external lawyers to fit our software: we ask them to do it, but we understand that we are not their only client. So it takes time for them to fit the software, and if the software is not with the proper data, we cannot take the proper decision. So it can be difficult - it's gymnastics. At some point, we have to work on that, and eventually it will be really natural.
Historically, lawyers are not used to using technology in our profession, and the definition of a lawyer has been to do things the oldfashioned way - with paper, or e-mail. Before we took the decision to develop the software in house, we looked at many options within the market, and we noticed that most of the software was being developed in order to manage, first of all, the billing hours for external lawyers and, secondly, to manage contract drafting - and that's it.
New generations of young lawyers have a different set-up, a different mindset. I think lawyering is a little bit behind if you compare it with other professions, such as marketing. I think these new generations will push harder to improve new technologies in the law practice.