Innovation paradox
You didn’t expect that now, did you?
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JC pontificates about technology
An occasional series. 
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Why do reg tech solutions promise so much but deliver so little? This is the Innovation paradox. Is it a paradox, though?
Things weren’t so bad in 1975. There was a natural limit on legal wrangling. Making any edit during a negotiation would mean retyping the entire page. And posting it in. And having it posted back. In carbon triplicate.
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.
By the nineties, the office manager’s refrain “we don’t pay lawyers to type, son” had lost its force. We had terminals on our desks, next to the executive model Dictaphone™. By the millennium, we didn’t even need a business case to get the internet.
Suddenly, we could spawn docs, tweak clauses, shove in riders — endlessly futz around with words. Generating and sending documents was free and instantaneous. It was like the sorcerer’s apprentice. Stanley Fisheven wrote a book about it.
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 human negotiation, could now be thrashed out in infinite, infinitesimals detail. We argued about not just trifles, but pavlovas, puddings, flans, flummeries and even fricking self-saucing sponges. 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 — persisted. 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[2]. Not only has regtech failed to remove legacy complexities, it has created entirely new ones.
Are there any fewer lawyers today? No.[3] Are more deals being done? No.[4] Is there more paper? Are there more words? You bet.[5] The more technology we have thrown at “the legal problem”, the longer and crappier our contracts have become.
A curious fellow might pause to wonder why. Surprisingly few have.[6] Let me hazard a guess. Why is it that technology isn’t helping? To be sure, Andy has given; it isn’t Bill this time, so who is it that is taking away?[7] We all are. We nit-picky, care-worn, pedantic attorneys. It is a function of the incentives at play. We lawyers and negotiators are remunerated by the time we take and the value we add. We add value in the shape of words. We put them in and we take them out. We are rewarded for the complexity and sophistication of our analysis. That means, we fiddle.
Lawyers don’t want to simplify. Lawyers don’t want to truncate. That is not their nature. It is contrary to their nature. That 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.
If your principle goal is to simplify, technology will help. But if your goal is livelihood preservation through confusion, obfuscation and distraction, technology is your weapon. Thus has it brilliantly enabled lawyers to showcase the sophistication and complexity of their syntax. In a nutshell: We use technology to indulge ourselves.[8]
See also
References
- ↑ But not actually. See: Waste.
- ↑ 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.
- ↑ 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.
- ↑ Not even those professionally motivated to do so: those futurologists of the law, Professors Susskind, who have forged whole academic careers by predicting a legal dystopia which seems, in thirty years, only sclerotically to have got any nearer.
- ↑ Let me Google that cultural reference for you.
- ↑ 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.