We discussed the genesis of Luminance, the challenges associated with the adoption of technology at law firms, characteristics of the law firm of 2030, and what the emergence of technology like Luminance means for the future of legal services.
Listen to our interview below:
Ps. I have included an AI-generated transcript below for your reference.
Introduction: Welcome to the Reinventing Professionals podcast hosted by industry analyst, Ari Kaplan, which shares ideas, guidance, and perspectives from market leaders shaping the next generation of legal and professional services.
Ari Kaplan: This is Ari Kaplan and I’m speaking today with Emily Foges, the CEO of Luminance, an artificial intelligence platform for the legal profession. Hi Emily. How are you?
Emily Foges: Hi, Ari. I’m fine. Thank you very much.
Ari Kaplan: Emily, tell us about your background and the genesis of Luminance.
Emily Foges: I have always worked on M&A projects, but on the end of things where you find typically that somebody bought a company and actually it’s never quite what you expected it to be. No matter how much due diligence you do, there are always surprises, so I was very interested when I was approached by the early Luminance team who were all technologists from the University of Cambridge who had been working with advanced machine learning techniques to develop technology that could read and understand documents, legal documents, and then learn from the interaction between lawyers and those documents to get smarter. I was really fascinated by this and this is a really good opportunity to tackle, first of all, the problem with due diligence, then how the team of lawyers can possibly get through such vast quantities of documentation and make sense of it. I came on board with those guys back in early 2016 and we worked together to develop the interface with some leading lawyers in London to make it fit seamlessly within the thought processes of corporate lawyers conducting M&A due diligence in the first instance. And then we launched the platform in September 2016 and we’ve come a really long way since then. We’ve now got nearly 80 customers in 23 countries around the world and we are now at the point where we’re starting to provide services to corporate legal teams as well. So it’s a very exciting time.
Ari Kaplan: I saw Luminance representatives at both the Lexpo conference in Amsterdam and at the Corporate Legal Operations Consortium Institute in Las Vegas. How have audiences both in the U.S. and Europe been responding to your approach?
Emily Foges: So it’s been very interesting, actually. One of the interesting things about the legal profession is that it’s an industry that hasn’t changed very much over the years and so change is in itself quite a new thing and actually we found certain European countries would be much faster to adopt the technology than anywhere else, so Lexpo in Amsterdam is quite poignant for us because one of our first customers, in fact our second customer, was a Dutch law firm. We swiftly moved onto the Nordic countries, Sweden, Denmark, and Norway. They were very quick to adopt and then we went around the other side of the world and ended up in Singapore, Australia, New Zealand, and even Thailand. What was really fascinating to me was that it was only once we’d gone on that sort of journey around the whole world, kind of collecting up customers all over the place that we started to get the U.K. and U.S. law firms interested, you’d kind of think it would work the other way around. But yeah, it was interesting that it did that and it tells you a lot, I think, about scale really. If you’re a huge law firm, it’s much harder to make changes than if you’re a smaller, more agile shop.
Ari Kaplan: Can you tell us how Luminance works and how these different firms are deploying it?
Emily Foges: What Luminance does is you can upload the documents and really quite quickly it reads and understands all of those documents and places the findings in a very intuitive interface and that interface, we call it the Intelligent Viewer, gives a team of lawyers an instant understanding of a whole data room in a way that’s never been possible before. So you can look at a glance and see where the likely issues are. Bring the most important documents to the top of the pile immediately and start your review by focusing in the right places. That’s been very powerful for firms who want an additional layer of insight into their due diligence so that when they start the transaction, they start from a position of much greater control and much greater confidence in what they’re looking for. So for example, most law firms, when they conduct due diligence, there’s so much documentation they know they’re never going to get through it all, so they negotiate samples right, so you decide which documents are going to put in the samples for your review, those and the rest of them are just massive scope. What we find with Luminance is very often you’ll upload a set of documents and find that some of the most interesting documents, some of the most telling ones in terms of how the business operates, would have fallen outside the sample because they’re not particularly material, but they might come from a jurisdiction that makes a big difference to the transaction overall. So Luminance has really turned around that data room and rather than just showing you the most important material documents from a commercial point of view, it shows you first the ones that are most anomalous, most unusual, that differ from norm for some reason, and as a corporate lawyer, that’s where you’re likely to find those kinds of hidden gems of information that might otherwise get missed. That’s what Luminance does and in terms of how firms are adopting, there is a huge variety. Luminance is a technology that you can get up and running in under an hour and you don’t need to do any pre-setup configuration, pre-training or anything like that. That has made it possible, I think, for smaller firms with fewer resources to adopt the technology and just get going on a real life piece of work where they can really use the technology to work faster, find issues more quickly and spend more of their time on the more meaningful analysis rather than the sort of repetitive grunt work going through document after document. For the bigger firms, and we’ve got some very big firms – we’ve got 10 of the global top 100 law firms on our books now, there’s a different approach. Sometimes, they might decide to adopt one transaction at a time, so one partner will conduct one transaction. They’ll learn from that, and then other partners will decide that they want to get on board as well. Or, they’ll do the full roll out through their knowledge management team in terms of redefining the way that they work on a transaction and training all of their new associates in that way. It really varies from firm to firm.
Ari Kaplan: What are the challenges associated with the adoption of your technology at law firms?
Emily Foges: I think the first one is obviously just the nature of law firms, right? They are very complicated organizations as we all know. The partner model means that you very often need consensus across the firm, across lots of different stakeholders before a decision can be made, particularly about adopting technology which changes the way that you work. That’s always going to be a challenge in legal tech to get firms to make a decision about how they’re going to move forward with technology. That hasn’t been easy, but we’ve kind of cracked it. I think with 78 customers on board in 18 months, I think we can say that we’ve managed to convince them. That’s been probably the hardest thing. You know that the spirit is willing and you meet lawyers who say: “Oh, you know, we just need an end to this long, painful process and need to find a better way of working. There must be a better way of working. Oh look, here it is right now. How do we get on board with this?” And, then it does get more complicated. We’ve got some customers who carried out the pilot with a 15 months ago, right back in the early days, and have only just signed up because that’s how long it takes to get all of these things signed off, but that’s just the nature of this business.
Ari Kaplan: Does your technology represent the end of lawyers as we know them?
Emily Foges: I don’t believe it does for a minute. In fact. I think what we’re seeing here is a real return to proper legal work. I mean, when I talk to very senior lawyers in the city of London, they’ll say: “You know what? I worry about trainees today. [So, junior associates as you’d call them in the New York.] We hire the best of the best, the brightest young minds out of law school and we cream off the top and we bring them into the firm and then we give them unbelievably boring, repetitive work to do.” One of a number of things is going to happen. Either they’re going to get bored and leave and do something else or they’re going to burn out or they’re going to sort of get Stockholm Syndrome, become repetitive, boring lawyers and we don’t want them to be the partners of the future and they’ll say when they were in their twenties, you know, they’d come out of law school and it was really exciting going work for a big corporate law firm and be on the cutting edge of a deal and it doesn’t feel like that now as a young lawyer now. You feel like you’re doing machine work, so the law firm of the future. I think it’s a very bright future. It’s a future where lawyers will be back doing this meaningful work that they studied for. Most people go into law because they want to make a difference. Getting back to a profession where lawyers are working in a way where they’re learning everyday rather than doing the same repetitive exercise every day until they manage to move beyond that into something more meaningful.
Ari Kaplan: What does the law firm of 2030 look like?
Emily Foges: I think it is going to be a really exciting place full of bright, enthusiastic, interesting lawyers who have been freed up from the shackles of all of this tedious, repetitive work that increasingly young lawyers have to deal with now and are really applying their minds to really creatively solving problems on behalf of their clients and adding huge amounts of value to their clients. Not through the crunching through of documents but through really kind of informed analysis where they can work on more transactions than ever before and so they learn more from that and they become real experts in their field and are able to really guide their clients and advise them in a very meaningful way.
Ari Kaplan: What does the emergence of technology like yours mean for the future of legal services?
Emily Foges: I think it means that the commercial model will probably change because at the moment we have a commercial model which is very much driven by billable hours still. I think we’re starting to see that go into decline, but I think realistically in the future that will become a lot less relevant. You will no longer be judged by how long it took you to do something. It will be much more outcome focused, and I think clients will value the firms who are able to get to the answers most quickly and most meaningfully. I think it’ll be positive for everybody concerned. I really don’t see a downside to this for the legal profession. It is potentially an issue for paralegals who are currently plugging the gap. I think the market for that kind of work will disappear and be replaced by technology, but not for the brightest legal minds.
Ari Kaplan: This is Ari Kaplan speaking with Emily Foges, the CEO of Luminance, an artificial intelligence platform for the legal profession. Emily, thanks so very much.
Emily Foges: Thanks, Ari. Nice to speak to you.
Closing: Thank you for listening to the Reinventing Professionals podcast. Visit ReinventingProfessionals.com or AriKaplanAdvisors.com to learn more.