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Blazing a Trail for LegalTech in CEE

Blazing a Trail for LegalTech in CEE

Legal Markets
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According to its website, Budapest-based InvestCEE aims to “humanize technology” for lawyers and provides services to law firms and in-house counsel in Hungary, Romania, Croatia, Poland, and the Czech Republic.

The company was founded by former White & Case and Dentons lawyer Orsolya Szabo, who says that, while attending the first official Legal Geek conference in London in 2016, she was struck by what she heard and saw. “From one moment to the next I felt like I was finally at home.” She says she realized that “although Biglaw had deployed technology for a while, and even local IT developments were in place, there was clearly room for a company whose main role would be to enable legal technology in client-facing work streams.” On her return from London, she got to work developing the business model for innovative legal service delivery.

InvestCEE mainly works with corporate in-house legal departments and small-to-medium sized law firms that don’t have internal tech teams. According to Szabo, InvestCEE frequently helps clients initially with smaller projects, often simply advising them about which available technology is most useful for their specific needs and helping with the subsequent purchase, then also often helping install and implement the new tools and personalizing the tech to maximize its usefulness.

In addition, Szabo’s brainchild provides tech workshops, both in public conferences and meet-ups and at private workshops, where members of InvestCEE’s team can discuss the directions the technology is heading and illustrate how it can be used in work-streams. Ultimately, her passion for helping lawyers, teams, and firms use technological solutions to improve workflow, efficiency, and management, shines brightly.

LegalTech Categories and Work Types

Szabo identifies three key workflow areas for law firms where technology can be particularly useful. First, she says, is Contracting. Szabo says that there is no single platform or software that covers all angles and addresses the entire life cycle of a contract, but she insists that this is a benefit rather than a weakness, as software that purports to address everything often fails to do so – and doesn’t really excel at the things it does do. Instead, she notes, there are many valuable tools available for each step in the cycle, from pre-signing to drafting, real-time negotiation, signing, and post-signing data-driven management.

The second key area where technology is useful to lawyers is Matter Management. According to Szabo, digitizing matter management delivers a data-driven workflow, and goes beyond time management by measuring the value of work in other terms, often more effective and revealing. According to Szabo, this showcases the strategic value and complexity and collaboration of the work by better access to legal data, and it provides better management of resources. “Digital matter management platforms prepare reports that allow you to present to the board what you and your team have been doing and the strategic importance of the work,” she says, “at the click of a button.”

Finally, Szabo says, the third area is Document Review, which she describes as “possibly the most widely known form of LegalTech, and the most sophisticated AI-driven tool.” Unfortunately, as Document Review tools are usually English-language-focussed, they can be of limited use to lawyers (or clients) using other languages. Still, Szabo reports that language-agnostic AI tools are in development that utilize system learning by data volume rather by machine learning, by going beyond the keyword search paradigm and focussing on the structure of the language.

Challenges in the Industry … and in CEE

The biggest stumbling block that Szabo comes across regularly, she says, is decision-making related to the acquisition of new tech projects due to limited budgets and complex security barriers. Petr Zatopek, General Counsel to Skoda Auto DigiLab in the Czech Republic, who is communicates frequently with InvestCEE in his search for tech solutions for his in-house legal team, is familiar with this problem. “Our company is part of the VW group, so our IT system is incredibly complex,” he says. “I’ve been working on the company contract database and automatic workflow and have managed to create a workflow process, but we desperately need the accompanying software. This will be a long and arduous process due to security issues such as tough encryption where everything is stored.” Still, he knows that his competitors use the tools, and this knowledge helps him sell the tools internally. “I sometimes see light at the end of the tunnel when other manufacturers in the group manage to put something in place, so I am always hopeful.”

This hesitation to adopt new technologies is particularly acute in Central and Eastern Europe, it appears Kamila Kurkowska, the Managing Director of Firemind, a B2B marketing solutions company in Poland, who works closely with InvestCEE, reports that, “I also work a lot in the Spanish legal market, which is comparable to Poland’s. However, in Spain there are 150 -180 LegalTech start-ups, but in Poland, only 40-50.”

Indeed, notes Marko Porobija, the Managing Partner and CEO of Croatia’s Porobija & Spoljaric law firm, despite the increasing demands of clients and the growing need for modern technology, the market in individual CEE countries is not well served on a local level. His home is no different, Porobija says, noting that “I can honestly say that Croatia still doesn’t have a proper legal tech consultancy market.”

InvestCEE is filling that gap. According to Kowalski, “there are many LegalTech players, and we have a vibrant community, a dynamic market, but I don’t think I’ve seen an organization as strategically focussed on CEE region as a whole as InvestCEE.”

Doru Epure, the Managing Partner of Budapest-based ELA Legal Services, agrees. “InvestCEE is my primary source of knowledge in the realm of smart law. Their guidance on the subject of document automation, on how to present innovative ideas to clients, and how to re-shape our visibility tools to reform our message to clients has been invaluable. We are currently transitioning to a phase of cooperation which entails common offers of managed legal services and other tech-reliant legal assistance solutions to existing and new clients in Romania.”

Porobija is enthusiastic about the assistance he and his colleagues have received from InvestCEE. “They connected me with many relevant and upcoming LegalTech startups, some of which are surely going to be our providers in the near future.”

The Effect of COVID-19

Ultimately, Szabo believes that the recent COVID-19 lockdowns across Europe will accelerate the adoption of technological tools by the legal industry. “It’s their time to shine,” she says, confidently. “It has increasingly been in the background – but not as a priority. This will change.”

Kurkowska also believes that the demand for LegalTech has sped up since the emergence of COVID-19. “I would say that before COVID, a lot of law firms were treating LegalTech as a nice gadget,” she says. “But now lawyers feel that – in a very short space of time – it will change from ‘nice to have’ into a ‘must have’.”

Mariusz Kowalski, CEO of Waterwalk Partners, agrees. “The crisis accelerated change in certain parts of the market. Much of the tech available before it happened hasn’t really been used. Companies are realizing that staff working from home doesn’t mean that things fall apart, so teams working remotely will increase the need for tech tools.”

Szabo’s passion for her work has led to the creation of a network of legal professionals eager to evangelize about the future of LegalTech and to work together with shared purpose. Considering the pace of change in technology itself, and the increasing recognition of its relevance in the legal sector, it seems the revolution has only just begun.

This Article was originally published in Issue 7.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.