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{{a|tech|}}
#redirect[[legaltech]]
:{{ACC on technology}}
 
:''“Unlike a covered call, which is about promising to sell what you actually own, a naked call is about promising to sell what you don’t actually own.
 
:''Like wearing a nice sweatshirt, learning the lingo, and hanging out at a hackerspace with a code editor open, looking the part, but only scrambling to learn a new skill if somebody actually hints they might want to hire you if their funding comes through in a few months.
 
:''That’s selling a naked call option. Faking it till you make it. Ironically, it calls for careful dressing up.”
:::—Venkatesh Rao, ''The Premium Mediocre Life of Maya Millennial'' (2017)<ref>You should really read this, which you can do [https://www.ribbonfarm.com/2017/08/17/the-premium-mediocre-life-of-maya-millennial/ here]</ref>
===What is new about technology===
{{Author|Ray Kurzweil}} will tell you we are at an inflection point where our technology is so good, and developing so quickly, it is about to become self-aware. Not only that, the ''universe itself'' is about to wake up and become self aware.<ref>See {{br|The Singularity is Near}}. Now there is [https://www.newscientist.com/article/mg24632800-900-is-the-universe-conscious-it-seems-impossible-until-you-do-the-maths/ a view that the universe is ''already'' self aware], only it operates at level of abstraction so far above our own mortal plane that we can’t see it — we are to its consciousness as our brain’s individual neurons are to ''our'' consciousness — and this idea has force (even if it ios a shade unfalsifiable). But that is not what Kurzweil is saying.</ref>
 
They haven’t passed that cup of Kool-Aid to the [[JC]] yet, so set him old forth on what he knows. The startling developments in technology in the last forty years hail from three interconnected places:
*'''Moore’s law''': the exponential increase in processing power, and decrease in size and cost of processors themselves;
*'''The network effect''':  The exponential increase in our own digital interconnectivity
*'''The transition from analogue to digital''': The extraction of [[data]] from its [[substrate]], such that data can be transferred from place to place ''without'' being buried in an analog medium of some kind.
 
===Why is reg tech so disappointing?===
[[Document assembly]] has been around for a good 15 years — they thought it was “Lawyer-killing disruptive technology” in 2006<ref>See Darrel R Mountain’s OUP monograph on the subject from 2006 [https://academic.oup.com/ijlit/article-abstract/15/2/170/683915  “Disrupting Conventional Law Firm Business Models using Document Assembly”]</ref> and, well, the [[Mediocre lawyer|cockroaches]] — ''we'' cockroaches — are still here, ladies and gentlemen, and [[document assembly]] technology ''still'' doesn’t work very well. And nor, for all the promise, do many of the other heralded applications in the vanguard of the reg-tech revolution. The things that were supposed to revolutionise legal practice - put junior lawyers out of work — the chatbots; the natural language parsing; the data-extraction — these applications still seem to be eluding us.
 
Why?
 
If advanced technology is magic, then “magic” is in the eye of, and measured from the perspective of, the beholder. When the beholder in question inhabits the [[legal]] or [[compliance]] department the technology doesn’t have to be awfully advanced to seem magical. Especially in a [[proof of concept]]<ref>One could define the [[terms of reference]] of a successful [[POC]] as being extensive enough to show off the clever bits, but limited enough to conceal the rubbish.</ref>.  Your [[sales]]guy airily drops “[[blockchain]]”, “[[chatbot]]”, “[[natural language processing]]”, “[[algorithm]]” and “[[AI]]” into his patter and he will sail through.
 
And so he does.
 
Aside: If you want to see real AI and really powerful algorithms at work have a look at modern music production software.<ref>The [[AI]] drummer Apple’s [[Logic Pro X]] is ''unbelievable''.</ref>. The tech is genuinely ground-breaking, the user interface is designed to be run without interference by the user; the expectation is ''no [[software as a service|software-as-a-service]]'' ''because the software is so intuitive you don’t need any service''.
 
*'''[[Yngwie Malmsteen paradox|Allows infinite flexibility]]''': In the olden days you needed a typist with some carbon paper: there was a real cost to manipulating words. You were trained to be economical.  {{yngwie malmsteen paradox capsule}}
 
*'''Doesn’t [[disintermediate]]''': the heat signature of the information revolution is its capacity to ''[[disintermediation|disintermediate]]''. Suddenly, any random could publish anything to anyone, free of charge. Teenagers in London could engage manufacturers in Pakistan to produce custom cricket merchandise.<ref>if you want some top cricket gear at great prices hit up @arborcricket on instagram. </ref> Fat middle aged lawyers can partially fulfil teenage dreams to be record rock music and publish it to the world.<ref>[[Dangerboy]]: potential audience : 7 billion. Actual audience: 1. ''But that's not the point.''</ref> But, inside the [[great steampunk machine|great steampunk Bolshevik machine]] that is a modern financial services firm, the organisational psychology militates against it. The great orthodoxy will insist on total top-down control in the form a bureaucratic chain of command: procurement, internal [[IT]], [[Chief Operating Officer|management]], a process literally intended to remove the optionality, flexibility and improvisational utility that disintermediation promises: whatever value the concept had will be bloated, deprecated, rigidised and commoditised to the point where using it is a ''chore''. An imposition.
*'''[[Software as a service]]''': software developers have no greater interest in disintermediating than their Marxist paymasters. For [[intermediation]] - I beg your pardon: [[software as a service]] - ''is how they take their cut''. They are [[rentier]]s. This would be more defensible were the [[reg tech]] products unique, imaginative or excellent, but they tend to be generic and underwhelming.
*'''Doesn’t provide user flexibility''': [[policy]] will see to that. The product will calcify, it is too hard, requiring too many approvals and too many business cases to develop.
*'''Doesn’t provide out of the box usable content''': to be usable the will require lawyers, and there are generally precious few of those, and they generally are refuseniks and low-cost-location rent-a-seat types who can follow instructions but aren't any good at ''writing'' them.
 
What ''none'' of this does is put useful tools in the hands of the user.
 
*'''Don't be a [[rentier]]''': How do I make money off something which is basically a simple idea that doesn’t require a lot of maintenance? The whole point of this tech is it is meant to be labour saving, right? I can’t do it per unit - the whole point is to eliminate the cost of having meatware do manual, repetitive tasks, and — once you have set it up — there is no actual cost to having a machine do it. So trying to act like a [[rentier]] is (a) a dick move and (b) is going to get you killed, because your big idea isn’t that flash, and someone will do it, and undercut you. See {{author|Roger Martin}}’s the {{br|The Design of Business: Why Design is the Next Competitive Advantage}}
*'''Remember the [[meatware]]''': If you convert your [[Meatware|user]] experience from “answering nuanced legal questions” into “completing a mandatory questionnaire”, you have lost. [[Document assembly]] applications: I’m talking to you. You are trying to make humans behave like machines. That is stupid. ''Humans aren’t good at emulating machines''.  Humans are better than machines precisely because they aren’t machine-like. If you have reduced your process to a rules-based questionnaire, ''you don’t need humans at all''. Get a machine to do it - hook it up to the trading system directly.
[[File:Tipp-Ex.jpg|thumb|left|For your monitor, sir.]]
 
===What reg tech ''should'' do===
The aim of [[reg tech]] should be to work with lawyers and to respect this divide between things machines are good at (accurately, cheaply and quickly following orders) and things the meatware is good at (interpretation; judgment; lateral thinking; dealing with conundrums; figuring out what to do when the instructions run out), and to divide labour accordingly:
*'''Reduce [[Risk - Risk Article|risk]]''':  reviewing a {{t|contract}} more systematically than a lawyer by reference to pre-described policies and therefore more reliably picking up things that a human, however skilled, might not.
*'''Reduce [[waste]]''': Make the process more efficient by dealing cheaply with formal issues so that the expensive unit (the in-house lawyer) is only engaged in the stuff really requiring skilled legal attention. Thus, the “touch time” is shorter, and the cost of negotiating the contract lower. Since the machine handles all the basic stuff it allows the lawyer to concentrate her judgment on the difficult issues without getting bogged down on the tedious stuff that is always the same.
*'''Empower the [[user]]''': [[AI]] should function as a para-legal: It should respond to the [[lawyer]]’s simple instructions: “do this/don’t do that/care about this/don’t care about that” and the application should go away and do it. This makes the lawyer more valuable and incentivises her to use the AI: the really dull stuff will just get done automatically, and the next layer — points that are important to spot, but trivial to articulate — the lawyer can quickly spot these (the valuable part) and hand them off to the machine for articulation (the trivial part). 
===What reg tech often ''does'' do===
In this [[user]]’s experience [[reg tech]] tools tend to invert these priorities:
*'''Risk reduction''': Unless your [[natural language processing]] is pretty special<ref>It won’t be.</ref>, machines cannot pick up all syntactical, legal nuances. They should be a first-line [[triage]], not a last line: in other words “whatever else you pick up, consider the following”. If the lawyer assumes the machine has read everything other than what it highlights (“I’ve read the whole document and I have found this...” she puts her faith in the interpretative judgment of the machine. Good luck. Risk reduction thus won’t significantly reduce lawyer time (if it does, consider whether you are really risk reducing). It is an ''overlay'' to lawyer time: the lawyer will need to review the whole contract those things beyond the scope of the approved algorithm.
*'''Waste reduction''': Well-targeted AI can take care of simple drafting work on the simple points it does pick up. This would require some skill in natural language parsing but should not be beyond the wit of decent AI.  The application would do the “eighty” while the lawyer does the “twenty”. Typically, reg tech applications get this back to front, purporting to do the big picture stuff (there’s an [[indemnity]]!) and leaving the lawyer to sweat the details in terms of drafting. It would be better for the lawyer to read the draft cold and go “fix the indemnity, change the term to 2 years, restrict disclosure to persons with a need to know, remove the requirement to notify for regulatory disclosures and take out the non-solicitation clause”.
*'''Empower''': Getting this backward will ''dis''empower the lawyer: This is the machine purporting to spot the big issues and assigning the lawyer to do the manual process. This reduces the lawyer to being a sort of grammarian.
 
{{sa}}
*[[Reg tech creates waste]]
*[[Algorithm]], [[heuristic]] and [[algorithm vs. heuristic]]
 
{{ref}}

Latest revision as of 16:27, 9 October 2021

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