Innovation paradox
The Jolly Contrarian’s contrarian advice : to increase efficiency, seek to remove technology from the workplace.
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JC pontificates about technology
An occasional series. 
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You didn’t expect that now, did you?
Why do reg tech solutions promise so much but deliver so little? This is the Innovation paradox. Is it a paradox, though?
"We don't pay lawyers to type, son"
Classic example: computers and the law. Things weren’t so bad in 1975. There was a natural limit on legal wrangling. When you wanted to edit a legal contract during the negotiation that would mean retyping the entire page. Hence, negotiation was necessarily bounded by the effort and time in recreating and circulating the document — by post. The lawyer’s art was to say something once, clearly and precisely. Since any editing was clearly wasteful, superficial amendment was not the apparently[1] costless frippery it is today.
Twenty years later, lawyers had computers on their desks. The traditional refrain[2] “we don’t pay lawyers to type, son” was losing its force. By the millennium, you didn’t even need a business case to have internet access.
Suddenly, it was easy to re-spawn documents, to tweak clauses, shove in riders — to endlessly futz around with words. Generating and sending documents was free and instantaneous.
Suddenly contracts were concluded in a flash, right?
Wrong. Far from accelerating negotiations, technology gave us free rein to indulge our yen for pedantry. Negotiations got longer. The issues got more prolix. We argued about trifles because we could. We danced on the head of a pin, because we could.
And technology lowered the bar: certain contracts, which previously could not justify their own existence, let alone legal negotiation, could now be thrashed out and argued about. We argued about cupcakes because we could.
That’s what lawyers do. It is in our nature.
Yet, yet yet: many painful artefacts of the analogue era — the gremlins and hair-balls you would expect technology to remove — persist to this day. We still have side letters and amendment agreements. We still, solemnly, write: “this page is intentionally left blank”. We still say “this clause is reserved”, as if we haven’t noticed Microsoft Word now has an automatic numbering system[3]. Not only has regtech failed to remove legacy complexities, it has created entirely new ones.
Are there any fewer lawyers today? No.[4] Are there more deals being done? No.[5]. Is there more paper? You bet. Now, to be sure, I have no data for this last assertion — where would you get them? — but there is no doubt the variety, length and textual density of legal contracts exploded after 1990. The more technology we have thrown at it, the longer and crappier our contracts have become.
Why is this? Is it not obvious? It is a function of the incentives at play. Lawyers and negotiators are remunerated by time taken. They are rewarded for the complexity and sophistication of their analysis. Lawyers don’t want to simplify. Lawyers don’t want to truncate. That isn’t in their nature. It is contrary to their nature. This is not what lawyers will use technology for. Lawyers will use technology to find new complexities. To eliminate further risks. To descend closer to the fractal shore of risk that it is their sacred quest to police. But that shore is fractal. However close you get, the risks remain.
Technology has brilliantly enabled lawyers to showcase the sophistication and complexity of their syntax. In a nutshell: We lawyers use technology to indulge ourselves.[6]
See also
References
- ↑ But not actually. See: Waste.
- ↑ I had an office manager say this to me, as a young attorney. True story.
- ↑ It is a truth universally acknowledged that no lawyer on God’s earth can competently format a document in Microsoft Word]].
- ↑ There are more than ever: The number of practising solicitors in England and Wales has reached another all-time high — Law Gazette.
- ↑ The number of M&A deals peaked in — you guessed it - 2007: Number & value of M&A deals worldwide since 2000 — The Institute for Mergers, Acquisitions and Alliances.
- ↑ There is a serious point here for people (like me) who argue that technology implementations should be driven as far as possible by users at the coalface. And that is to bear in mind that the interests of users at the coalface are not necessarily aligned with those of the organisation for which they are working.