Ari Kaplan speaks with Emily Foges, the CEO of Luminance, an artificial intelligence platform for the legal profession.
Ari Kaplan: 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 it seemed like a really good opportunity to tackle, first of all, the problem with due diligence, then how a team of lawyers can possibly get through such vast quantities of documentation to make sense of it. I came on board 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. We launched the platform in September 2016 and now have nearly 80 customers in 23 countries around the world. We are at the point where we’re starting to provide services to corporate legal teams as well.
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: 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. We have actually found that certain European countries are much faster to adopt the technology than anywhere else, so Lexpo in Amsterdam is quite important for us because our second customer was a Dutch law firm. We swiftly moved into Sweden, Denmark, and Norway. Then we went around to 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 journey around the whole world collecting customers that we started to get the U.K. and U.S. law firms interested. You would think it would work the other way around. It was interesting and it tells you a lot about scale. 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: How does Luminance work and how are firms deploying it?
Emily Foges: With Luminance, you can upload documents and the technology quickly reads and understands all of them, placing the findings in a very intuitive interface. That interface, called 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. At a glance, you can see the likely issues, bring the most important documents to the top of the pile immediately, and start your review. That’s been very powerful for firms who want an additional layer of insight into their due diligence so that when they begin a transaction, they start from a position of much greater control and confidence. When law firms conduct due diligence, there’s so much documentation that they know they’re never going to get through it all, so they negotiate samples and decide which documents are going to be included.
What we see with Luminance is that very often lawyers will upload a set of documents and find that some of the most interesting records, 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. Luminance has really turned around that data room and rather than just showing the most important material documents from a commercial point of view, it initially shows those that are most anomalous and unusual, which differ from the norm for some reason. As a corporate lawyer, that’s where you’re likely to find hidden gems of information that might otherwise get missed.
In terms of how firms are adopting the software, there is a huge variety. Luminance is a technology that you can get up and running in under an hour. You don’t need to do any pre-setup configuration or pre-training. That has made it possible for smaller firms with fewer resources to adopt the technology and just get going on a real-life piece of work where they can 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 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 train all of their new associates in that way.
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 – they are very complicated organizations. The partner model means that you very often need consensus across the firm and from 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, we can say that we’ve managed to convince them. That’s probably been the hardest thing. We’ve got some customers who carried out a pilot 15 months ago and have only just signed up because that’s how long it takes.
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. In the law firm of the future, lawyers will be back doing meaningful work for which they studied. Most people go into law because they want to make a difference. We need to get back to a profession where lawyers are learning every day, rather than doing the same repetitive daily exercises.
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 from the shackles of tedious, repetitive work. They will apply their minds to creatively solving problems without crunching through documents, but by conducting an informed analysis on more transactions than ever before. They will learn and become real experts, who can advise clients in a very meaningful way.
Ari Kaplan: What does the emergence of technology like yours mean for the future of legal services?
Emily Foges: At the moment we have a commercial model which is very much driven by billable hours and I think we’re starting to see that go into decline because it 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 clients will value the firms who are able to get to the answers most quickly and most meaningfully, which will be positive for everybody concerned. I really don’t see a downside to this for the legal profession.
Ari Kaplan (http://www.AriKaplanAdvisors.com) regularly interviews leaders in the legal industry and in the broader professional services community to share perspective, highlight transformative change, and introduce new technology at http://www.ReinventingProfessionals.com.