More comprehensive, more detailed and more accurate. Increasing volumes of data and documents are presenting lawyers with ever greater challenges in creating an information framework for dealing with legal disputes, whether it be in law firms, law enforcement, tax or competition authorities or in companies. The sheer volume of documents and the multitude of different formats (e.g. PDF, image files, audio) is posing problems everywhere.
Use of the latest software that can organize and search documents by means of AI, together with the involvement of so-called review specialists, can help with this.
Broad application options are often undervalued in practice. We would therefore like to suggest the following areas of application, as well as describing some of the difficulties involved and highlighting examples of best practice.
A selection of possible applications
The number of potential applications is huge. An exhaustive list would be way beyond the scope of this article which will instead consider a more limited number of options.
Insolvency proceedings: In insolvency proceedings the use of AI and specialist providers can help in three main areas, i.e. in determining exactly when insolvency proceedings were initiated, setting out the reasons for contesting the insolvency, as well as clarifying the nature of a company’s assets. All three areas in combination regularly lead to a bulking-up of insolvency assets. The time of insolvency can be determined by systematically isolating and recording invoices, reminders and enforcement documentation. Modern read-out methods make it easier to record receivables even if no standard accounting system exists and you are literally standing in front of boxes of paper. Searching through communications can help to substantiate the reason for insolvency and thus facilitate a challenge. The search for clues to previously hidden assets is particularly exciting for the mass bulking-up of bankruptcy assets, especially when key employees have already left the company and taken vital information with them.
Criminal / tax / competition authority proceedings: For a long time now, dealing with large procedural cases has been unthinkable without the support of technology. The amount of information is too large and the resources available to the public prosecutor’s office, police authorities or defence lawyers too small. It is therefore eminently sensible to bring in experts who can provide temporary support. This gives specialist lawyers the opportunity to work on major legal cases, leaving the time-consuming and often frustrating investigative work to be carried out by experts
Data protection and information requests: When it comes to requests under the EU General Data Protection Regulation (GDPR, in Germany: Datenschutzgrundverordnung, DGSVO), many companies have the difficult task of determining what data are to be stored and where. The search for a needle in a haystack can be undertaken by the intelligent use of software solutions even if there are no rules for data storage. Redactions can also be made in the correct, i.e. final, version. It is also possible to fully outsource time-consuming investigative work and have in-house teams solely responsible for evaluating outcomes based on an assessment of relevant documents. In addition, the so-called “data graveyards“ are becoming increasingly important. If no-one knows which data have been stored, in what form, for how long, when, by whom and for what purpose, then there is no proper procedure for deletion that is fit for purpose. Tracking down unofficial, historically nurtured processes alongside official ones poses challenges in itself.
Contract Analytics: Legal departments can work more closely with the business and so provide valuable information for decision-makers by means of systematic contract analytics. This requires the will to do more than the traditional legal department and to seek dialogue with the business.
Compliance / Internal Investigations
Companies are now subject to numerous national and international legal and regulatory obligations, which can also include voluntarily entered-into agreements. Despite the saying “Take action before it slips out of your hands“ and tools such as internal control system training or the “four-eyes“ principle, situations will always arise when action is unavoidable. Ultimately, when major breaches in compliance are suspected and where criminal action is pending, full clarification is recommended, particularly with the imminent introduction of new criminal legislation that will apply to organizations. Here, the question of legal and legal-technical support is directly relevant.
In practice, the devil is in the detail when it comes to the commitment and cooperation of all those involved. Some of the issues and practical solutions are discussed below.
A mediator between both worlds
A major problem facing any practitioner is poor communication between all those involved. When, for example, a public prosecutor is looking for evidence of an insider crime and is only able to provide the IT expert with keywords, then the result will be less than ideal. The IT specialist does not understand the background and is therefore unable to find any “by-catch“ which can be brought to the discussion. An understanding of search methodology is often lacking. This may be due to the fact that this unpopular task is occasionally entrusted to inexperienced junior staff. A typical example is where evidence of corruption allegations is sought in contexts using the word “corrupt“ which, needless to say, is doomed to failure. If there is a regular turnover of project managers, intelligent software will not ultimately make you smarter. There is only one thing that can help here. Service providers also need a project manager with extensive legal training who can act as an intermediary between legal and software experts. This should really be the same person for the duration of the project.
Target image definitions: Distinctive and iterative
Projects far too often start without enough thought being given to their objectives, particularly when time is of the essence. What are we trying to achieve and what hypothesis will be proven? The outcome will be very unsatisfactory if the work is carried out without iterations. During the course of investigative work there are always abbreviation clues, code words and previously unknown stakeholders. It is therefore vital to discuss progress at regular intervals as such meetings often result in considerable knowledge being brought to the table. For search settings, it is also advisable to check the first small sample of results and then adjust the parameters accordingly.
Storage: Plan early and cost-effectively During the cost assessment process it is often forgotten that some disputes can go on for years and that data should be stored for as long as is necessary, both physically and virtually. These storage costs can be expensive. A flat-rate accounting model for the archiving of material is recommended, particularly for arbitration court proceedings as data have to be retained for a long period of time, involving significant and often unforeseen project costs. Consequently, long-term data retention issues should be agreed right at the outset of a project.
Scarcity of resources: Necessary reserves for proper action
The legal process is often delayed as a result of a lack of adequate resources to ensure effective action. This can be distressing, e.g. some defendants can already be badly affected, in extreme cases being imprisoned or having their assets frozen. For this reason alone, but also mainly in terms of speeding up proceedings for the benefit of investigative authorities, it is advisable to deal with cases quickly before, for example, key parties are no longer available or the proceedings are restricted by the proportionality principle. Consequently, a powerful team with the right skill set and the necessary resources must be in place at the start of a project. A one-stop solution is an excellent idea if only to avoid further duplication of effort and time-consuming coordination.
Processing speed: Possessing and utilising technical skills
There is a need for viable technical solutions for the (pre)processing of larger data sets which should make information readily available as quickly as possible in a compatible format to facilitate a review. Ideally, AI which constantly enhances the filtered-out mountain of documents based on previously derived results can be used for this purpose. From time to time, it may also be necessary to first identify, select and roughly pre-filter the relevant data should initial restrictions on people and periods of time not be sufficient. Choosing the most suitable system to do this mainly depends on the type and nature of the data, but not so much on the usual topics or content (e.g. “hard facts“ from the ERP system in a financial accounting scandal versus e-mail traffic in a compliance situation). As well as technical issues such as the recovery of deleted data, duplicated material can be effectively weeded-out within a consolidation framework. AI continually helps in further reducing effort, e.g. if all potentially relevant documents with a high probability have already been reviewed “by the machine“, then the documents with a very low probability may be ignored.
Technical solutions for handling large amounts of data present lawyers with previously unimagined possibilities. A division of labor using technical solutions, review specialists and lawyers can offer the best solution in many ways. Modern lawyers should be aware of what technical solutions are available and then assess their potential in particular fields of activity. Whenever the volume of data and documents become large, the use of such technology can bring about unexpected insights and increased efficiency.