Thoughts on complexity and London FinTech week
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drlawrencelau
Jul 11, 2017, 8:54:31 AM7/11/17
to Legalese talk
Passing through London so decided to drop by the FinTech week https://www.fintechweek.com/. Some general impressions
- if Google London campus is any indication, the UK tech scene is multicultural, with about 1/3rd women (impressive for a geek community)
- Level 39 touts themselves as a community in Canary Wharf for fintech, with apparently many ex-institutional professionals chasing their dreams
- looking at ClauseMatch (clausematch.com) it is an interesting example of evolutionary v revolutionary approach (as espoused by legalese)
Two types of markets tend to be underserved, a) the highly sophisticated (think Word on steroids) and b) the simple (and often not profitable) ... think WordPad
ClauseMatch is catering towards institutions with complex policy documents which require regulatory compliance, version consistency and intra-department collaboration
To address their target market for the human intensive document life-cycle (draft to approval), they provide
On the other hand legalese takes a more revolutionary attitude, that code is starting basis with implicit assumption of self-modification.
This is like the difference between RNA and DNA, with the former only able to replicate and tends to be specific purpose, in contrast to DNA which can morph.
Thus though initially Legalese might be based on simple editors and lack productivity features, it is solving a different problem, smart contracts in contrast to (contractual) document smarts.
The development cycle is also different, I suspect Legalese will come across many errors and stumbling blocks because it is closer to a language than tool, and idioms, syntax, etc change as the expressiveness grows
Growth strategy,wise there are 2 choices, ClauseMatch will likely follow the K-selection with a few strong variants, possible expanding to adjunct segments like privacy, or anti-corruption.
As for the growth prospects of Legalese, it's up to Meng but as a paralegal drafting loan agreements, I would have to admit the limitation is human cognitive load. How much of a single document can be encompassed within a single mind?
The more interrelations and knock-on effects, the more likelihood of adverse reactions or loopholes appearing. If we move towards automated check or submitting contracts to consistency checkers, then we are effectively out-sourcing some our thinking which computers are more suited to accomplish (eg robustness testing). This treats our mobile phone as a hand-brain ... scan a contract (or the originating link), subject it to various compliance engines, autonegotiate the variations, and high-light to the user the key points, possibly in a more intuitive graphical form and not dense text. There may be other possible end uses that we can't even imagine yet, like making cultural variations (think Islamic prohibition against usury) or special clauses for disabled, or incapacitated people like the elderly.
This is one of the exciting points about working with technology ... the ability to imagine new possibilities.
Lawrence
http://www.linkedin.com/in/drllau
- if Google London campus is any indication, the UK tech scene is multicultural, with about 1/3rd women (impressive for a geek community)
- Level 39 touts themselves as a community in Canary Wharf for fintech, with apparently many ex-institutional professionals chasing their dreams
- looking at ClauseMatch (clausematch.com) it is an interesting example of evolutionary v revolutionary approach (as espoused by legalese)
Two types of markets tend to be underserved, a) the highly sophisticated (think Word on steroids) and b) the simple (and often not profitable) ... think WordPad
ClauseMatch is catering towards institutions with complex policy documents which require regulatory compliance, version consistency and intra-department collaboration
To address their target market for the human intensive document life-cycle (draft to approval), they provide
- more granular tagging and permissioning
- content and version control
- flexible workflow and real-time collaboration
On the other hand legalese takes a more revolutionary attitude, that code is starting basis with implicit assumption of self-modification.
This is like the difference between RNA and DNA, with the former only able to replicate and tends to be specific purpose, in contrast to DNA which can morph.
Thus though initially Legalese might be based on simple editors and lack productivity features, it is solving a different problem, smart contracts in contrast to (contractual) document smarts.
The development cycle is also different, I suspect Legalese will come across many errors and stumbling blocks because it is closer to a language than tool, and idioms, syntax, etc change as the expressiveness grows
Growth strategy,wise there are 2 choices, ClauseMatch will likely follow the K-selection with a few strong variants, possible expanding to adjunct segments like privacy, or anti-corruption.
As for the growth prospects of Legalese, it's up to Meng but as a paralegal drafting loan agreements, I would have to admit the limitation is human cognitive load. How much of a single document can be encompassed within a single mind?
The more interrelations and knock-on effects, the more likelihood of adverse reactions or loopholes appearing. If we move towards automated check or submitting contracts to consistency checkers, then we are effectively out-sourcing some our thinking which computers are more suited to accomplish (eg robustness testing). This treats our mobile phone as a hand-brain ... scan a contract (or the originating link), subject it to various compliance engines, autonegotiate the variations, and high-light to the user the key points, possibly in a more intuitive graphical form and not dense text. There may be other possible end uses that we can't even imagine yet, like making cultural variations (think Islamic prohibition against usury) or special clauses for disabled, or incapacitated people like the elderly.
This is one of the exciting points about working with technology ... the ability to imagine new possibilities.
Lawrence
http://www.linkedin.com/in/drllau
Michael Wharton
Jul 11, 2017, 9:10:27 AM7/11/17
to ta...@lists.legalese.com
Good summary Lawrence, thanks a lot :)
I assume many of you will have seen this, but interesting nonetheless - law firms bringing the clients in-house - clever or cynical depending on your angle! http://www.allenovery.com/news/en-gb/articles/Pages/Nivaura-fintech-specialists-appointed-AOs-entrepreneurs-in-residence.aspx
on a separate note, Who Needs Law is growing in London/UK. We provide legal advice to some of the most disruptive UK fintech clients like crowdcube, monese, cuvva, everledger . If anyone is or knows someone who wants to get involved -- we are looking for the following people:
> Lawyers (NQ-5yrs) - with interest in startup corporate, commercial and FCA work - incl. ICO and convertibles linked to ICO (we have significant pipeline of deals)
> Digital Growth Marketer/ Hacker - all rounder to come on board and execute Who Needs Law digital growth strategy
> Developers with ideas looking for a place to develop their legaltech. Come and work alongside us. We already work with and for a number of well established UK legaltech platforms.
email us mic...@whoneedslaw.com
Cheers, Michael
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drlawrencelau
Jul 12, 2017, 4:28:58 AM7/12/17
to Legalese talk
law firms bringing the clients in-house - clever or cynical depending on your angle
I have a phrase to describe this back in Singapore ... the term sheet is the new employment contract
When I look at technology, I am always mindful of the impact on social fabric, classic examples are the water pipes in 1900s destroying the village well as gossip spot, pill in 60s reducing economic advantages of marriage, and widely seen now, the untethering of work from a physical office. So what the law firm is doing is logical from one perspective, but part of a broader social change in how do you capture the benefits of a group of people. Before you could pay people for their time, clocking in & out. Talent can be renumerated in some way, but it is already mobile. How does a firm built around creativity, consulting or embedding cleverness (into software) preserves its assets which walk out the door at 5pm?
Look at Level 39, I was told that many were ex-institutional gung-ho guys & gals ... from psychology a disproportionate percentage would be mavericks or the typical square peg in round hole, frustrated with the lack of traction. So if these knowledge workers or creatives quit, how do you get their allegiance. Modern millenials know that corporate loyalty has long disappeared, or the fact that it is usually one-sided. So more and more are willing to be their own man-woman ... it's not surprising that the majority of small businesses are started by females who crave more time flexibility.
So to capture the benefits of these loose-foot talents, I see the term sheet becoming the de-facto employment contract, between people willing to punt on a team and the claims the team has on creating economic value-add. Of the 3 items investors look at (technology, target market, team), the people factor is the most difficult to quantify ... hence the shtraditional vesting mechanisms, bad leaver provisions, and incentive schemes. So when law firms are doing things like embedding clients (it may be a cynical marketing ploy as you suggest) ... its because the reality is they can't afford to pay the market rate for top-top talent ... which as is well known, is a power-curve. Read the classic Outliers for more examples. Before you'd look for social proof or indirect indicators, a degree from Stanford or a serial entrepreneur. But with India and China introducing 1 billion people into the global workforce, there's a vast untapped pool of potential entrepreneurial energy .... and it's the enforceable termsheet that converts this into kinetic traction. You can see it already in milestones tied to metrics or VCs offering ancillary services like HR.
Law is well known as a ripe target for disruption, the concept of billable hours is basically you are paying for time. But in my observation, 80% is spent filling in forms/contracts/deeds, 15% is knowing which form, and only 5% for creative problem solving (aka finding loopholes). So if automation cuts in half document generation and AI augmented search engines help navigate the maze of red tape (and Companies House is a garden walk compared with India) then more value will accrue to those recognised as creative legal problem solving. Smart investors should recognise this so if the value proposition is vague but potential is there, then the new termsheet should hopefully allocate the right proportion of risk and rewards. What a lot of people don't realise is that English common law and its traditions have a significant influence. In China where fa ren (lit human law) is still prevalent, relationships and harmony are prized over strict adherence. So if legalese does become international and smart contracts operate in a functioning market (again a complex adaptation of supply/demand) it will be this century's impetus for growth as the aging West bet their savings on the global young and keen.
When I look at technology, I am always mindful of the impact on social fabric, classic examples are the water pipes in 1900s destroying the village well as gossip spot, pill in 60s reducing economic advantages of marriage, and widely seen now, the untethering of work from a physical office. So what the law firm is doing is logical from one perspective, but part of a broader social change in how do you capture the benefits of a group of people. Before you could pay people for their time, clocking in & out. Talent can be renumerated in some way, but it is already mobile. How does a firm built around creativity, consulting or embedding cleverness (into software) preserves its assets which walk out the door at 5pm?
Look at Level 39, I was told that many were ex-institutional gung-ho guys & gals ... from psychology a disproportionate percentage would be mavericks or the typical square peg in round hole, frustrated with the lack of traction. So if these knowledge workers or creatives quit, how do you get their allegiance. Modern millenials know that corporate loyalty has long disappeared, or the fact that it is usually one-sided. So more and more are willing to be their own man-woman ... it's not surprising that the majority of small businesses are started by females who crave more time flexibility.
So to capture the benefits of these loose-foot talents, I see the term sheet becoming the de-facto employment contract, between people willing to punt on a team and the claims the team has on creating economic value-add. Of the 3 items investors look at (technology, target market, team), the people factor is the most difficult to quantify ... hence the shtraditional vesting mechanisms, bad leaver provisions, and incentive schemes. So when law firms are doing things like embedding clients (it may be a cynical marketing ploy as you suggest) ... its because the reality is they can't afford to pay the market rate for top-top talent ... which as is well known, is a power-curve. Read the classic Outliers for more examples. Before you'd look for social proof or indirect indicators, a degree from Stanford or a serial entrepreneur. But with India and China introducing 1 billion people into the global workforce, there's a vast untapped pool of potential entrepreneurial energy .... and it's the enforceable termsheet that converts this into kinetic traction. You can see it already in milestones tied to metrics or VCs offering ancillary services like HR.
Law is well known as a ripe target for disruption, the concept of billable hours is basically you are paying for time. But in my observation, 80% is spent filling in forms/contracts/deeds, 15% is knowing which form, and only 5% for creative problem solving (aka finding loopholes). So if automation cuts in half document generation and AI augmented search engines help navigate the maze of red tape (and Companies House is a garden walk compared with India) then more value will accrue to those recognised as creative legal problem solving. Smart investors should recognise this so if the value proposition is vague but potential is there, then the new termsheet should hopefully allocate the right proportion of risk and rewards. What a lot of people don't realise is that English common law and its traditions have a significant influence. In China where fa ren (lit human law) is still prevalent, relationships and harmony are prized over strict adherence. So if legalese does become international and smart contracts operate in a functioning market (again a complex adaptation of supply/demand) it will be this century's impetus for growth as the aging West bet their savings on the global young and keen.
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Dustin Wehr
Oct 18, 2017, 10:26:16 AM10/18/17
to Legalese talk
Lawrence, I just wanted to say real quickly that I appreciated your posts. We've been very busy!
Michael, how would one view A&O's decision as cynical?
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