The most important legal technology terms at a glance
Alternative legal service providers
Alternative legal service providers include legal technology platforms such as Flightright.de and Geblitzt.de, which handle mass claim disputes involving flight delays or traffic offences, for example. These kinds of cases can be processed in a standardized way, always using the same approach. Although the portals do compete with smaller law firms at times, the low value of the claims make it unlikely that cases of this kind would land on a lawyer’s desk.
Automation is defined as the process of having activities performed with the help of artificial intelligence by computers that were previously performed by humans. A distinction is made between the cognitive and the technical-cognitive fields. The automated comparison of contract documents is an example of the cognitive field, while the self-driving car represents the technical-cognitive field.
The term ‘app’ is derived from the word: application. In English, the abbreviation app stands for ‘application software’ and describes all types of application software. In German, on the other hand, the term usually only refers to software that is used on mobile devices such as smart phones or tablets. The term ‘mobile app’ is used as a synonym for ‘app’.
Blockchain is the core of the technology: Simply put, it is a digital register that records transactionsbetween consumers and suppliers as a chain of transaction blocks. This creates absolute transparency for all parties involved because every detail of a transaction is recorded. Blockchain technology forms the basis for cryptocurrencies such as Bitcoin.
Big data refers to large amounts of data originating from areas such as the Internet, mobile telephony, the financial industry and social media that can be stored, processed and evaluated using special solutions. The data allows companies to gain insight into their customers’ interests and to optimize and make production more flexible. Big data is the basis for digitalization and developments like Industry 4.0.
A chatbot is a software system (mainly used in the B2C area) that reacts to human text requests on the basis of algorithms. To do this, the system accesses a database and compares the contents entered in the text field with the information stored in the database. If the chatbot recognizes certain keywords, it reacts via a text output with a predefined response.
The cloud, also known as cloud storage, describes the provision of IT infrastructure such as storage space or application software via the Internet. This service is provided and utilized via a technicalinterface similar to that of a normal web browser. Cloud service providers make it possible for their customers to use IT infrastructure based on actual demand. The advantage: No capital investment in the computer and data center infrastructure is necessary.
Computer forensics is the process of restoring and backing up deleted data, researching and analyzing evidence in digital form, and documenting it in a legally binding way for the purpose of securing evidence. The procedure is used both in the course of official investigations and in the case of internal company compliance issues. As many of today’s workflows are digital, this type of digital investigation is gaining in importance.
The term cyber-security refers to the protection of data and information systems against unauthorized access by third parties. This includes safeguarding IT systems against malware and hackers; securing networks, cloud infrastructures and the Internet of Things; and also providing physical protection for buildings and server rooms. At the same time, cyber security also includes organizational aspects such as the provision of training to raise employee awareness.
A data room is a virtual room for the secure management and storage of documents. This is an Internet-based platform that enables secure online access to confidential documents. Data rooms are used by teams working on joint documents, especially in the course of due diligence, in which potential buyers examine the financial and legal situation of an object up for sale.
Data protection is a collective term referring to the legal provisions specified in various laws aimed at protecting the privacy of individuals in the digital age. The objective is to protect private data from unauthorized third-party access in view of an individual’s exposure to threat in the modern world not only related to the use of computers and the Internet, but also concerning everyday situations such as shopping at supermarkets.
Digital natives are the generation of people who grew up in the digital world and as a result, havebeen exposed to digital applications since birth. The representatives of this generation are also called generation Y or millennials. The term ‘digital immigrants’ is used as an antonym for digital natives and refers to people who only became familiar with the digital world as adults.
Document analysis generally refers to a data collection technique in which documents are evaluated. This is often performed at the start of an investigation in order to become familiar with a topic. In the past, document analysis primarily took place in libraries; today, digital applications can be used. For example, there are various legal technology solutions offered in this area that make document analysis easier and less time-intensive for lawyers.
Document analysis refers to a data collection technique in which documents are evaluated. This is often performed at the start of an investigation in order to become familiar with a topic. In the past, document analysis primarily took place in libraries; today, digital applications can be used. For example, there are various legal technology solutions offered in this area that make document analysis easier and less time-intensive for lawyers.
eBilling stands for electronic billing and is also referred to as e-invoicing. This is the business practice of sending invoices electronically instead of via conventional mail. eBilling is becoming increasingly important as it is associated with lower costs for postage, paper and handling, and is much faster. Data protection and accounting fraud are problematic, however. It is therefore advisable to use eBilling software instead of sending invoices by email.
eDiscovery stands for electronic discovery and refers to procedures in which data is localized, secured and examined in order to use it as evidence in civil or criminal proceedings. The procedure can be performed on individual computers and in networks. Under US civil procedural law, eDiscovery is mandatory. In Germany, companies use it particularly during internal investigations, for example in the event of compliance violations.
Extracting is the use of artificial intelligence and computer linguistics to process unstructured information. The aim is to gain knowledge about a previously defined domain. Extracting can be viewed from two different perspectives: Either as the recognition of certain information, or as the removal of information that is not being searched for.
Internet of Things
The Internet of Things is the networking of various objects with the help of the Internet. The aim is for these objects to communicate with each other independently via the Internet and thus carry out
various tasks for the owner. Applications range from the general supply of information, automated
ordering, warning and emergency functions to networked machines in factories.
The term artificial intelligence (AI) basically refers to methods that enable a computer-based system to solve tasks that require intelligence when performed by humans. Ultimately, the aim is to reproduce realistic human-like decision-making structures, i.e. to program a computer in such a way that it can independently process problems from start to finish. The goal is to automate certain processes.
Cryptocurrencies are digital currencies with a decentralized, distributed and cryptographically secured payment system based on blockchain technology (e.g. Bitcoin). Companies have also discovered cryptocurrencies as a financing instrument: initial coin offerings (ICOs) are used to collect capital for specific projects. The coins acquired by investors can then be used as a means of payment for the relevant project.
Legal process outsourcing (LPO)
The term legal process outsourcing – LPO for short – refers to the outsourcing of legal-administrative tasks, which are often routine activities, by law firms and legal departments to external service providers. This has been in practice for several years in the US and many Asian countries. Legal process outsourcing is increasingly gaining in importance on the German market as well.
Legal technology comprises software and online services that support or automate legal work processes, and includes Legal Tech 1.0, 2.0 and 3.0. Applications in Legal Tech 1.0 support lawyers with office organization; Legal Tech 2.0 applications carry out individual legal work steps independently without human assistance; and in Legal Tech 3.0, artificial intelligence comes into play, making legal work completely autonomous.
Machine Learning is an important area of computer science and a component of artificial intelligence. Computer programs based on machine learning can independently find solutions to new and unknown problems with the help of special algorithms. This type of algorithmic calculation of probabilities always requires human-involvement because the software must first be supplied with the relevant data and rules before it can act.
Matter management is the computer-assisted organization of legal matters in legal departments; in law firms, the term ‘case management’ is used in this context. Matter management software simplifies office organization and covers a wide range of tasks, from coordinating appointments and creating digital files to time recording and billing functions.
Smart contracts are intelligent contracts that automatically monitor defined rules and independently execute specific actions, such as issuing payments when certain circumstances occur. This is made possible by the use of a database comprising different contract terms and conditions. The decentralized storage and verification of contracts using blockchain technology have greatly increased the potential of smart contracts.
Social media serves the mostly profile-based networking of Internet users, providing them with theopportunity for communication and cooperation. Social media enables both private and business-
related exchanges of information; participants communicate, work and make arrangements together, and in doing so make particular use of text, images and sound. Companies use social mediafor networking with customers, as a marketing instrument, and for market research and customer support.
Spend management is the internationally used term for the process of controlling purchases andprocurement. It makes the procurement volume, as well as prices and quantities, transparent across departmental boundaries, thus enabling the structured analysis of supplier expenditures. In the recent past, various software solutions have come onto the market that fulfill this task and serve to identify potential for cost reduction and optimization.
Text mining is the term used to describe algorithm-based analysis methods for the identifying meaning structures in text data. Text mining software uses statistical and linguistic means to develop structures based on texts that enable the user to immediately recognize the relevant key information. With targeted application, text mining programs are even capable of generating hypotheses, checking them and refining them step by step.
The term networking originates from the biological context, where it describes the connection and interaction of neurons in the brain. Such networking can also be found in organizations: Internal company networks are becoming increasingly important, and the actions of employees create various cause-and-effect relationships. On a larger scale, networking today takes place on social networks such as Facebook or Xing, where it enables worldwide exchange.
Workflow management refers to the IT support and partial automation of business processes. The relevant process is analyzed, controlled and logged with the help of workflow management sof ware. The aim is to coordinate the usually relatively large number of spatially-distributed parties working to find solutions for subtasks of the same process, as well as to control the course of the process and processing status.