In Conversation: Kenji Tagaya, General Counsel, Executive Officer and Head of the Legal Group - JERA
Kenji Tagaya reflects on the challenges of breaking from tradition within a Japanese corporate environment.
JERA is one of the largest energy companies in Japan but it is also a relatively new company established as a joint venture between Tokyo Electric Power and Chubu Electric Power.
Having a short history has in fact helped us to onboard legal technology. If our company had a history of hundred years, it would be almost impossible to fundamentally change the way legal group works because there would be so much tradition built up that the organization would be very resistant to change. With a new business one finds that nothing is set in stone. We are also fortunate to receive strong support from our ICT group, which is leading digital transformation of our company
But even with a young company, doing something new and bringing in a big change is not easy. One must secure budget and buy-in from management. One must also acknowledge the fact that Japan is a very traditional culture when it comes to doing business. Historically, Japanese companies have relied on paper, ink and physical signatures or seals to confirm documents.
However, Covid-19 has forced companies to examine technological solutions and embrace non-traditional working practices. This may have opened their eyes to the possibilities that technology provides, which will lead to a corresponding increase in demand. We are now able to get corporate approval at all levels via electronic confirmations, and paperless working is moving ahead throughout the company.
We are currently introducing and deploying contractual review legal technology. We introduced two [tech providers] for contractual review purposes, one English and one Japanese. I find this necessary as a Japanese solution is needed for Japanese-language documents and an international provider is needed for English-language documents. Some international companies also claim that they have Japanese language adaptability, but the quality is limited because of the nature of AI. Unless they process a huge amount of data, the AI will not grow to a level of capability that satisfies us.
The next area we would like to incorporate legal tech into will be that of workflow management. At the moment, all of this work is undertaken manually; we pick up the phone or receive emails and the consultation starts. In the future we would like to introduce management software to assist this process.
While not all our legal staff are equally eager for legal tech, particularly if they feel learning a new way of doing things will be time consuming, the technology we have introduced so far has proved to be very successful.
We would like to be even more ambitious with the technology we introduce, but we have not got there yet. Take something like document management systems. Transitioning to this type of software is so complicated that we are not sure which supplier is the right fit for us, or whether any company is able to do what we need. We are watching and waiting for the market to evolve.
Naturally, given the company's size, the legal group's work is on a global scale, and we need to work with both Japanese and English language documents. The uniqueness of language is one factor as to why Japan does not have as advanced a legal tech sector as other mature economies such as the US or UK. Japan is to some extent isolated from the global market because of this. It is making some headway in catching up, especially due to the Covid situation, and will hopefully progress further.
I firmly believe that the trend of increased legal tech adoption in Japan will continue and we will see an increasing number of companies introducing some sort of legal tech, whether that is document management, contract review or higher-end AI solutions.
We are looking for improvements to our legal technology in most areas. Although I believe we are a bit ahead of the curve in terms of openness to technology adoption, our use of legal tech is limited to contractual review and the contractual review itself - we are talking about relatively standard documents.
If technology advances and other areas can be also processed by legal tech, then the accuracy and efficiency over work will be significantly higher, which is why we are looking out for new products and evaluating them on an individual basis. Adopting advanced technology to assist the company is one of our top priorities over the foreseeable future.