Technology benefits legal practice including Estate Planning

Arken.legal Limited Chief Executive Lincoln Watson discusses how technology is already having an effect on legal practice today, with reference to Estate Planning. This is the first of a two-part series on the topic. Technological advances, especially in the past decade, mean legal practitioners need to change the way they plan for the future and how they advise clients, he writes. Lincoln delivered a presentation on this topic at the recent 10 CPD Hours in One Day – Private and Commercial Clients Conference in Wellington. 

Digitisation – the integration of digital technologies into your business processes and IT infrastructure – isn’t coming, it’s already here!

In the last 2-3 years, Chapman Tripp has launched its technology and innovation arm, Zeren, Wellington legal services business LawHawk has started offering online documentation generation, Zegal provides an online collaborative platform for legal advisors to work with their clients, and RAVN by legal industry giant iManage promises “a cutting-edge Artificial Intelligence platform … to automatically organize, discover and summarize your documents”.

In this article we will look at why you should embrace the digital revolution and the technologies that will drive change in the Estate Planning industry.

The benefits offered by digitisation are compelling, and include:

• Efficiency: eliminate data re-keying or other manual transfer, automate predictable and repetitive tasks.
• Increase revenue: offer innovative services to client.
• Gain scale: grow your business without being constrained by the availability of trained and experienced staff.
• Change business models: support new opportunities such as remote and flexible working.
• Improve customer loyalty: engage the next generation of “digitally native” customers.
• Improve decision-making: provide access to the right information at the right time.

Of course, the benefits won’t “just happen” – digital initiatives need appropriate investment and support just like any other project – but correctly implemented digitisation offers you the opportunity to sidestep some of the usual obstacles associated with other ways of growing and developing your business.

The rise of Software as a Service (SaaS) offerings, where the application is “in the cloud” and accessible via the internet, can significantly lower both upfront cost and upfront complexity.

Pay-as-you-go and subscription payment models allow you to limit expensive capital purchases, and to link costs to success in a way that wasn’t possible with previous software licencing arrangements. This is, in turn, increasing the pace of innovation as trying out new business models and services becomes much less risky from an investment perspective.

Furthermore, the rising ubiquity of cloud-based solutions is going hand in hand with an increase in Application Programming Interfaces (APIs) – built-in connectors that allow information to be passed seamlessly and securely between applications.

APIs allow the implementation of full end-to-end business solutions that are built from “best of breed” components, all talking to each other securely via the internet. This frees businesses from the cost and risk associated with selecting – and subsequently being tied into – monolithic enterprise applications.

AI is the buzz-word of the last 5 years. We’re still a little way from the “conscious computer” promised by science fiction, but a huge amount of research and development – not to mention commercial and social interest – is being poured into areas like machine learning, developing algorithms, bots and the like.

“The nation that leads in AI will be the ruler of the world.”
Vladimir Putin, Sept. 2017

The levels of function offered by AI can be broken down as follows:

• Productivity: Bots that perform repetitive tasks, 24×7, from standardised inputs.
• Analysis: Interpreting vast quantities of data, identifying underlying patters and trends and presenting these in intuitive, easy-to-consume, ways.
• Interact: Providing enriched machine to human interaction. We’ve already reached the stage where humans can’t distinguish between human and machine interactions.
• Continuous learning: Moving from instructions being coded by developers to “self-learning”.

How will AI impact the Trust and Estate Planning industry?  Well there are a range of scenarios such as the following:

• Disrupting how your clients are found and how they interact with your organisation.
• Analysing and highlighting out-of-date and risky precedents.
• Providing opportunity to reach new markets, reduce costs (increase margins) and provide consistent quality services.
• Enabling you to focus on the true value in human-to-human interactions backed by AI data and analytics.

Not everyone is welcoming AI with open arms though.  Mr. Putin may be upbeat about the future, but we’ll leave the last word to Elon Musk:

“With artificial intelligence, we are summoning the demon. You know all those stories where there’s the guy with the pentagram and the holy water, and he’s like, yeah, he’s sure he can control the demon? Doesn’t work out.”

Digital signatures (a subset of electronic signatures) have featured in NZ legislation for many years. The legality of electronic signatures was discussed in the Electronic Transactions Act 2002 but the technical form was left deliberately vague, so as not to preclude future developments, and the technology itself keeps on moving.

Forms of electronic and digital signature include – from least to most secure:

• Typed names and digital or scanned images
• Passwords and PINs
• Biometrics
• True digital signatures (involving verification of the signer, maintenance of referential integrity data, and encryption to prevent repudiation and modification in transit).

A review conducted by the UK Law Commission acknowledges that the greatest concern with digital signatures is not the technology per se, but confidence in longevity of technology supplier.

With correct document signing and witnessing protocols being one of the cornerstones of the estate planning business, what will happen when (not if) digital signatures become the norm?

Thanks to the fevered interest in Bitcoin and other cryptocurrencies, blockchain (along with AI) is the hottest technology topic right now.

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Don & Alex Tapscott, authors Blockchain Revolution (2016)

The three essential properties of blockchain are:

• Data is not held by one party – it’s distributed across a network of connected computers.
• All changes to the data are accepted and recorded by all parties, forming the ledger.
• It is virtually impossible to falsify the information as it would require collaboration across all computers in the network.

The practical benefits of blockchain technology are simple to understand – massively increased trust and lower (zero) transaction costs.  The estate planning business is centred on trusted documents and connections; opportunities for the application of blockchain within this industry include:

• Secure identity for Willmaker and witnesses.
• Supporting a dynamic Will updated in real time as circumstances change.
• Seamless data flow from Will to probate and execution stages including smart (self-executing) contracts.
• Asset vaults with secure personal ownership and shared access.

As you can see, the topic of digitisation is both broad and exciting. It can also be confusing and potentially daunting to organisations who don’t see themselves as technology businesses. Where do you start? What is the best approach? And what are the risks?

In my next article I will outline five practical actions that you can take to start or advance your digitisation strategy.

Lincoln Watson is the Chief Executive of Arken.legal Limited, a SaaS business transforming the estate management industry through its market-leading document automation technology. Lincoln is an experienced leader of technology businesses with over 20 years’ as a Director or Senior Executive of in-house development and consulting businesses.  Lincoln has worked in the wealth management, trust management and technology sectors for leading organisations including Goldman Sachs JBWere, Craigs Investment Partners, and Perpetual Guardian. Contact Lincoln at Lincoln@arken.legal or connect via LinkedIn.

You can also connect with Arken.legal via LinkedIn.