As one of Australia's longest serving GCs, there's not much Marcus Clayton hasn't thought of when it comes to running a legal function. He gives his thoughts on how to embed tech within a successful team.
The number one goal of innovation in our legal team, in
an organisation manufacturing basic commodities, is
to be able to do more with less – to consistently deliver
high quality outputs at lower cost, so we are contributing to
improving our organisation's profit. There's always pressure to
keep costs to the minimum, but there is also a particular risk in
needing to do more and more in terms of meeting increasing
compliance requirements whilst containing costs.
The second goal is to increase reliability. There are more
regulatory requirements to deal with and more things being
asked of us, and to do that confidently and efficiently we need
to make sure that the information and the processes we've got
to be able to do that are robust and reliable - so I know that
when the CEO wants a piece of information I can produce it
reasonably quickly, and we are providing various stakeholders
with confidence about our organisation's governance.
We're in the early stages of looking to see what new legal
technology is available that can successfully meet our needs.
I've been an in-house lawyer for over 20 years now and am
probably one of the longest serving in-house lawyers in
Australia. I use a basic, but robust and reliable system which has
served us well.
We use a SQL Server relational database for recording
and linking all the information we use every day, such as
information about matters we are working on, agreements,
property details, intellectual property, company details, and
external lawyers' fees, but we are looking to upgrade from this.
We have been looking at what there is on the market, and there
have been some quite interesting developments in terms of
matter management. Overall, our organisation does not have a
consistent process for information management, leaving it to
particular teams to make their own arrangements.
We have had a lot of growth over the time I've been here and
we're a much bigger company now, with more operations,
more people, and more issues that need to be resolved every
day. We are in a period of rapid change for our organisation.
One aspect of this is the organisation is about to embark
on a digital transformation project planned to unlock value,
including a focus on the benefits from automation and smart
analysis of our financial and operating systems and processes.
We're also looking at how that works for us in the legal team, to
bring it all together over the next probably six months, against
the objectives of robustness and reliability that I mentioned
We are currently looking at NetDocuments, iManage and a
couple of other leading information management systems and
are also looking around for matter management systems. What
did surprise us was that there was not really one overall, out of
the box, comprehensive package available for the typical needs
of an in-house counsel team like ours.
We try to keep things as simple as we can, and we prefer just to
go out and get something that is going to do what we want off
the shelf. Our needs will be similar to many other companies'
needs. Given that we already have a good simple set up, we
don't want to have something new that is of a proprietary
nature and forces you to go down a route in doing things their
way, that may not align with our preferences, and could provide
less functionality than we've got at the moment.
A couple of high-level IT leaders I have worked with recently,
inside and outside our organisation, have confirmed a
contemporary approach is to use out of the box wherever you
can. They also reinforced a strong preference for a cloud-based
approach, rather than on premises facilities.
We have quite a free rein in terms of what technology we
can onboard within the team. Of course, if it doesn't work or
deliver value, I carry the can for that. To learn about the value
of the technology which is now available, we went out and
got anecdotal evidence, did research, and then followed up
with a few of the aggregator providers about what they would
recommend. That led us to talking to some people, getting
some demonstrations and forming our views.
I was surprised at the low estimates for setting up this system
and migrating our data. I feared from previous experience that
the actual costs could be greater than the optimistic forecasts,
so in the budget I've put in a more realistic amount than has
been suggested for a migration (which of course we will
manage carefully). I've also said we want to do it in incremental
stages, which helps us manage the transition risks.
We're a small department, who operate in a company that has
traditionally run everything very lean. That's the environment
I've been working in for a long time with colleagues in the legal
team. We evaluate our technology intuitively and based on how
much it is actually helping us to achieve our objectives. Having
said that, we are building KPIs into our assessment process at
the moment as part of our structured evaluation procedure.
When staying abreast of what legal technology is available,
organisations such as ALITA are useful and easy to access to
corroborate what we're finding in other places, and help us
to test things anecdotally against promotional material or the
stated capabilities of the tech.
I've followed what's going on in Artificial Intelligence relevant to
our responsibilities, and I can see where it will have application,
but in our case we are a heavy manufacturing industrial company
which doesn't have a lot of low-value, high volume legal work.
We leverage our internal expertise with carefully selected
external advisors who we are confident will apply themselves
creatively and deliver value for us, and while I currently don't
see a big role for AI in our legal team on a regular basis, we're
continuing to monitor its progress. We have used AI in certain
cases, for instance during some major litigation, and I was really
impressed with the quality that came back from applying AI to
our discovery records. Automation, AI, and machine learning
are opportunities we are planning to exploit for our heavy
manufacturing business, with an expectation of significant
benefits, so we are on the look out for where these sort of
opportunities might be there for the legal function also.
COVID-19 and its effects have of course had an influence on
the way we are working at the moment. From March to July,
everyone was working from home, and in July we cautiously
moved back to offices, following a contingency plan which for us
had a 'team A' and 'team B' that were in the office on alternating
We are operating throughout Australia, so we have had
experience with the different situations in the different states.
We've had experience with all the video conferencing facilities,
and have had a major rollout of hardware and software to
people who weren't using stuff in a mobile way to the same
extent as others. In our legal function we're all equipped with
laptops and iPads, and because (pre-COVID-19) we're often
all around the country, it wasn't a great change for us. The
relational database that I mentioned before has given us a really
solid framework for our essential information, so that even
though the team's been at home for some time over lockdown,
we've been able to continue all of that essential stuff without
any glitches whatsoever.
Going forward, I think
that technology will
change the roles of inhouse lawyers in a more
subtle way than many
are predicting. Some
tech that we use, such
as hearings via video
conferences, can be
used tactically, and you
need to consider that
before being pushed
down a certain path –
should you agree to
videoconference or not
agree? Are you giving
up some advantage
if witnesses are not
being cross examined
in person, or if your
representatives are interacting with the court in different ways?
This shows that technology needs to be adopted in a measured
way, because there are just too many side issues that come up.
Our Annual General Meeting (AGM) was in May, so we had
to deal with how we were going to do this in the middle
of the pandemic, with the restrictions on meetings. This
quickly exposed us to virtual AGMs, but these are still not
that straightforward. We did a hybrid AGM, which went well
apart from the fact that a third-party tech provider played the
CEO's speech before the Chairman's speech. It was simple
human error, despite numerous rehearsals undertaken and the
procedures we had in place. Most viewers would not notice, but
it just highlighted that there are risks in new technology. Next
year, I think we'll probably still do a hybrid AGM, but we will have
learned the lessons, I don't think we'll move to a fully virtual
Young lawyers who will have to drive the profession's use of
technology forward should be clear about what they are trying
to achieve from legal tech. That's cost efficiencies, delivering
valued outcomes, avoiding surprises, and having reliable
information and systems and tools to be able to do the task
that you're responsible for dependably. Everything comes back
to that, and that's what we're trying to do in order to deliver
value for our shareholders. You need to have a mindset that is
going to let you understand how you can use the technology and
the potential developments to further what the organisation
is trying to achieve. You can't be divorced from the underlying
nature of the business.