Change doesn't always come easy for a 124-year-old insurance company. Nor does it come easy for the most traditionally conservative and insulated department within that company: the legal department.

Liberty Mutual's legal department is nonetheless engaged in a technology initiative to modernize its operations — an effort that will require leveraging data, updating in-house software, and a decisive shift in workplace culture.

This ongoing effort is aimed at making the department more cost-effective and efficient. It also is an opportunity to streamline one of the company's core business offerings.

Integral to business

At Liberty Mutual, the legal department needed financial and operational support from company executives and leaders to take on its modernization initiative, which can be challenging to secure in any corporate business setting.

"Capital expenditure budgets are [usually] extremely tight in corporations, so it can be a whole lot harder to free up these budgets for noncore costs like a legal department," says Brad Blickstein, principal at the Blickstein Group, a consultancy that works with corporate law departments and law firms.

But Liberty Mutual executives, along with most others in the insurance business, now recognize the urgency to innovate in order to remain competitive.

The pivotal role of data

Liberty Mutual creates and stores ever-growing volumes of unorganized data, from settlement information and contracts to sensitive client records. Its legal team knows that taming this data through identifying, indexing and enabling access to it is the foundation for every technology process and product they seek to deploy. But this essential first foundational step does not happen overnight.

"To be able to build up a capability to understand unstructured data takes a long time; it takes a really long time," says Jeffrey Marple, innovation director, corporate legal at Liberty Mutual, who is tasked with turning the team's technology ideas into reality and instilling a tech culture in the department.

The company's data scientists have made their way into the legal department over the past 10 years, and they have since become critical to its operations.

"If you think about the insurance industry in general, we sell two products," says Kiran Mallavarapu, senior vice president and manager of legal strategic services at Liberty Mutual. "One is the indemnity, and the other one is [legal] defense."

Having experts mine and translate data into measurable metrics, Mallavarapu explains, has enabled the department to "figure out very simple questions, such as how many cases have we handled, how many cases were in a particular week, how many were in particular jurisdiction [and] how long does each case take."

This data is presented to legal staff primarily through data metric dashboards, which Mallavarapu calls some of "the most important tools" for the legal team. "I've seen a real transformation in the legal department just having that information visually available."

The data these dashboards offer is not just helpful for what it indicates, but also for what it leaves out. Since the data presented shows what measurements and metrics are possible in the legal space, it spurs legal department managers "to ask the next big operations questions" about what new information can be mined and leveraged in the future, Mallavarapu says.

Though the specific data desired will differ depending on each group, the overall legal department has a general blueprint for what it would like to see in the near future. In contrast to what Mallavarapu classifies as "descriptive analytics," which looks at "what happened, [and] why did it happen," the legal department is now working "predictive and prescriptive analytics," i.e. ways to analyze data that enable forecasting for legal issues.

Not all modernization steps need to be complicated, according to the legal tech innovation team at Liberty Mutual. Some steps are as simple as strategically updating relevant news and information alerts. (Photo: iStock)

Updated metrics, benchmarks

"Generally, we try to provide the right information at the right time for people that are making decisions on litigated matters," says Robert Taylor, Liberty Mutual's vice president and senior corporate counsel.

And there are simple, low-tech ways in which this can be accomplished. "That may come in a simple alert to someone from the legal department as to the status of a particular case," or an alert to inform them "that this case looks like other cases of a similar type, and that you should pay attention to it for the following reasons," he says.

While such alerts are invaluable for those throughout the organization, they are far from the only way Liberty Mutual's legal department is enabling access to data to support better decision-making. One method being employed for increased sharing and collaboration both within legal and with outside departments is its knowledge management system.

The system includes document management repositories to help the legal department ensure there are specific controls on sensitive and confidential documents handled by their staff. Taylor notes that document management repositories "create proper security around documents that the practice groups need, but also at the same time allow them to share and reproduce that material as it's required to be shared and reproduced."

Jeffrey Marple is Liberty Mutual's innovation director for corporate legal. He calls the system "key to [the legal department] doing their job every day. They need a place to put things and find things easily, making the knowledge management system crucial."

The department is also looking to free up legal staff to focus on more high-level work by automating mundane tasks. This includes tools for document assembly, which Taylor notes "are very intuitive" and can be deployed "by subject matter experts in a streamlined fashion." These tools, however, may only be the tip of the iceberg when it comes to future automation.

Not to be forgotten: AI

Despite the amount of work needed to implement AI, the technology is slowly catching on in a growing amount of legal departments across various industries. The legal department at Cisco, for example, is designing pilot projects that use machine learning to automate certain workflows and contracting tasks. While Cisco did not divulge the specific applications it is considering, machine learning can be used to easily draft and execute standard contracts like nondisclosure agreements. It can also be deployed in contract review to "read" contracts to determine which clauses deviate from an established standard and what the types of clauses or terms are within each contract. Meanwhile, the legal team at Yahoo has turned to machine learning to automate classifying and tagging invoices to ensure the integrity of e-billing data, and by extension, e-billing metrics.

While Liberty Mutual's legal department hasn't yet identified any specific areas for applying machine learning, they are optimistic about what artificial intelligence may be able to achieve in the long-term.

"I have this thing in my head: I call it the 'Legal Jarvis,'" Marple says. The Marvel Comics superhero "Iron Man had an AI called Jarvis and Jarvis did everything — Jarvis brought him lunch, but would also do some pretty serious computational stuff and give him advice on certain things. I think there is maybe, down the road, room for a legal AI as well. Where it lives, who it talks to, I'm not sure, but we're figuring that out. To me, an AI gets rid of the friction of work and allows our attorneys and legal professionals to do the work they should be focusing on."

Shifting the corporate culture

A future with "Legal Jarvis" however, will take more than just a few technological leaps. On par with the data it mines and tools it deploys, Liberty Mutual's legal tech initiative significantly pivots on its success getting tech-resistant insurance and corporate legal professionals to not only trust technology, but to become innovators themselves. It is a big part of the reason the legal department launched a "legal ideation and transformation group," a type of mini-incubator team that encourages in-house legal to think like tech disruptors, and oftentimes helps turn their ideas into reality.

"Within that group, it's not just about us coming up with ideas, or interesting vendors to work with," Taylor says. "The ideation process requires that we discover, develop and test new ideas. But that's not enough, because a new idea is only valuable if you can implement it."

As a part of that process, the company's technology leaders were charged with bringing different staff and decision makers across the legal department together to participate in hearing from, vetting and ultimately choosing the technology vendors the department works with. The group hosts two biannual "vendor days" where they feature "a collection of vendors we find interesting that can be legal technology-based, but they don't have to be and haven't always been. It can cross industries," Marple says. "We bring them in, and we have thought leaders in the room."

After each vendor pitches their technology, the participating legal department members will review the presentation and brainstorm on how the technology can be applied in-house. "We find that to be really a great way to first take the temperature on how good we thought the product was — and the vendor, because those can be different — and then ask, 'Is there a home for them at Liberty Mutual?'" Marple explains.

The vendor days, however, are far from the only brainstorming sessions for the legal staff. "We also do off-site ideation days where we get people out of the office for a little bit and try to solve different problems or come up with new ideas or new products," Marple adds.

When not participating in these events, members of the legal department are also invited to brainstorm via one-on-one meetings with the legal ideation and transformation group, as well as through a community website the group hosts to discuss ideas and projects.

While these communal ideation programs may seem more at home in a startup than a century-old insurance company's legal department, they have been a big hit with the legal staff, even those who have practiced a certain way for years. "It's interesting. We find that the acceptance of tech [in the legal department] isn't based upon years of practice experience whatsoever," Taylor says. "I wouldn't pigeonhole that at all; we see people across experience levels being willing to engage in anything that helps them do their work better."

This, of course, comes as little surprise to many of those leading this transformation. Technology, after all is helping in-house professionals accomplish what many continually strive towards — working smarter and more efficiently. "I've seen very little resistance," Marple says. "Many usually say, please help me with this!"

Read this story in its original form at Legaltech News. To contact the author, send email to rdipshan@alm.com.

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