Innovation paradox
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JC pontificates about technology
An occasional series. This article is a 20-year meditation following a conversation had, in 1999, with C.E.M.C., for whose guidance I offer huge thanks and profound respect.
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The Jolly Contrarian's contrarian advice : to increase efficiency, seek to remove technology from the workplace.
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. In 1975, when you wanted to edit a legal contract during the negotiation that would mean retyping the entire page. Hence, legal comments in a negotiation were necessarily bounded by the effort and time of recreating the document. There was an art to saying something once, clearly and precisely. Since editing was wasteful exercise, superficial amendment was not, for the avoidance of doubt, the apparently[1] costless frippery it is today.
Things weren’t so bad in 1975. There was a natural limit on legal wrangling. The physical cost partly negated the anal paradox.
By 1995 lawyers had computers on their desks, and the traditional refrain[2] "we don't pay lawyers to type, son" was beginning to lose its force.
Suddenly, it was easy to re-spawn documents, to tweak clauses, shove in riders — to futz around with words. Generating and sending documents was free and instantaneous. Negotiations quickly became convoluted and elongated. You argued about trifles because you could. It also lowered the bar: certain types of contract, which previously could not justify their own existence, let alone legal negotiation, could now be thrashed out and argued about.
Far from accelerating negotiations or enhancing productivity, technology gave us free rein to indulge our yen for pedantry. Are there any fewer lawyers today? No.[3] Are there more deals being done? No.[4]. 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.
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[5]. Not only has regtech failed to remove legacy complexities, it has created entirely new ones.
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 actually had an office manager say this to me, as a young attorney. True story
- ↑ 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.
- ↑ It is a truth universally acknowledged that no lawyer on God’s earth can competently format a document in Microsoft Word]].
- ↑ 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.