A charter for Legal Tech?

Nothing happens under the Paris sun in August, right? Well, a few days ago a group of interesting folks kept me from sunbathing at Paris-Plage. Our conversation centered around one theme: designing a charter to provide guidance to legal tech startups navigating the legal industry.

The Incubator of the Paris Bar and two associations, Open Law and ADIJ (Association for the Development of Legal IT), are joining forces on an ambitious project with the goal of creating a legal tech charter, which is essentially a seal of approval to show that legal tech companies are in line with the French legal profession’s regulations and Code of Conduct. Since achieving compliance is a no easy task, the charter drafting process requires careful thought to provide proper guidance to aspiring startups.

A community effort for greater good

This effort requires trust and collaboration across the entire legal ecosystem to frame straightforward and objective answers to complex compliance rules and professional standards (including professional confidentiality, conflict of interest, etc.). To make matters even more challenging, the present regulatory environment at the national and EU level is unsettled (for example, an early version of the French Projet de Loi pour une République Numérique, the “Digital Republic Bill”, included some high-level guidance about regulated professions, but this was removed in a subsequent iteration of the draft).

At first glance, it might appear a bit of a conflict for lawyers, usually tasked with interpreting the law for the benefit of their clients, to do the same for startups that challenge those same legal models. Some in the tech community maintain that rules exist to be broken, and that the pressure from disruption will trigger an evolution of the rules. But it’s difficult to predict how fast, and to what extent, this will happen. Legal advice certainly comes with higher stakes than holiday flat sharing or the taxi industry, yet many legal tech startups aim to evolve the profession via (or in spite of) the current set of rules. To maintain the rule of law and justice for all, we need to have assurances that firms and companies in this sector are operating according to a high standard of ethics and conduct. Could a legal tech charter help the industry cope with this situation until le grand soir of disruption happens?

Could a legal tech charter help the industry cope until le grand soir of disruption happens?

The benefits to all players are clear

For startups, this framework will offer the opportunity to confirm that their innovative idea is not only going to ‘disrupt the legal industry,’ but also that they are on the right track to avoid pitfalls surrounding the unauthorized practice of law — or similar complications that might make it even more difficult to launch a new business. Just as some plants grow better and higher when attached to a stake, legal tech sprouts should have a support structure–unless growing wild is part of their strategy (a topic for another post!).

For law firms and lawyers, such a framework will help facilitate collaboration, instead of eyeing legal tech businesses with suspicion and fear of unfair competition. Obviously not every lawyer is wary of legal technology, but an air of uncertainty continues to hover over the industry. Such a charter would remove some of that uncertainty by establishing a mutually agreed-upon framework and a shared vocabulary with the aim of helping those apprehensive of new technologies embrace the reality that (like it or not) disruption is happening — and that the best way forward is to ensure change happens in a fair and transparent way.

For institutions such as bar organizations that are guardians of a code of conduct, a collaboratively created charter can act as a safeguard for the benefit of all parties and serve as a means to estab-lish and maintain ethical standards.

Potential startup investors would also benefit: if the company under consideration has done its best to navigate the charter guidelines, potential investors’ due diligence could signal a stronger opportunity. From where I sit (helping Nextlaw Labs scout investment opportunities in legal tech), I routinely come across startup founders who seem to be genuinely surprised at questions regarding their positioning vis-a-vis this or that aspect of the French Code of Conduct. Simply by asking a couple of questions, I often get the sense that not everyone is comfortable giving a straightforward answer — and these elements are crucial to future commercial success in France’s legal tech land-scape.

And for the customers? B2C products certainly open the market to a crowd that may not have had access to this type of service. But there should be no ambiguity regarding what is, and is not, legal advice, despite the fine line between the two. On the B2B side, the charter could help differentiate products developed under its recommendations from the fairly significant market noise. Clients are consistently approached by tech vendors, law firms, professional services firms and publishers, all offering new solutions for their legal pain points (full disclosure — that is actually also my own job). A charter would significantly help differentiate and encourage serious startup contenders.

So all in all, are there reasons not to engage the French legal community in this way? It seems to me there are very few. French people (full disclosure #2 — I’m one of them!) may have a tendency to over-engineer processes from an administrative viewpoint. Do we want more rules and constraints on those reinventing the profession? Probably not. But if the framework is designed well, the intention is not to make it mandatory, but rather serve as a best practice.

If the framework is designed well, the intention is not to make it mandatory, but rather serve as a best practice.

The charter development process itself is fascinating. Gathering forward-thinking stakeholders across the industry for an institutional initiative, drafting a crowd-sourced document, then merging these insights in various collective rounds of review (…I’m told some call it a ‘hackathon’?!) by the legal tech community should make for interesting and solid marketplace feedback.

I’m rather optimistic by nature, but I do believe there is a positive intention and interesting exploration going on here. I would be curious to know if legal tech startups and legal communities in other countries have done this before — and if so, if they went down the path of creating this kind of charter in their jurisdiction. If you have any insight, please share!

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