Innovation paradox
Behold, the Innovation paradox: Why does reg tech promise so much but deliver so little?
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JC pontificates about technology
An occasional series. 
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A scorpion asks a frog to carry it across the river. The frog hesitates, afraid of being stung.
“But,” says the scorpion, “if I sting you, we will both drown”.
“I see!” says the frog. “Hop on!”
They wade into the river. Midway across, the scorpion stings the frog.
With his dying breath, the frog cries, “Why did you do that? Now we both will die!”
The scorpion shrugs. “It’s in my nature.”
- —Folk tale
To increase efficiency, seek to remove technology from the workplace.
- — The JC’s maxims for a happy life.
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 Fish even 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. Cross-acceleration, if you like. 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, infinitesimal detail. We argued about not just trifles, but pavlovas, puddings, flans, flummeries —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 — persist. To this day, we still have side letters and amendment agreements. We still write: “this page is intentionally left blank”. We still say “this clause is reserved”, as if we haven’t noticed Microsoft Word has an automatic numbering system.[2] Not only has regtech failed to remove legacy complications, it has created entirely new ones.
- Are there any fewer lawyers today? No.[3]
- Are more deals being done? No.[4]
- Are there more words? My oath there are.[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]
Why isn’t technology helping?
Let me hazard a guess. To be sure, Andy has given; it isn’t Bill that has taken away.[7] So who is it? All of us. You and me, readers: 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: futurologists of the law have forged whole academic careers by predicting a legal dystopia which seems, in thirty years, only sclerotically to have got any nearer. A world without work? Fat chance.
- ↑ Let me Google that cultural reference for you.
- ↑ There is a serious point here for people 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.