Technological change is revolutionising the legal landscape, helping legal leaders to better identify, measure and mitigate the risks facing their business.
As the pandemic has escalated the pace of technological innovation and adoption in so many areas of life over the past two years, so businesses in the MENA region have identified innovation as a core driver of strategic growth.
We have seen digital transformation impacting the way we work, shop, invest, access healthcare and communicate with others, and today four out of 10 (39%) legal decision-makers in the region say that innovation is at the core of their business. A further 53% intend to embrace incremental innovation in their businesses as a means to achieve efficiencies.
Captain Abdulla Al Hayyas, Acting Director of Marine Transportation Affairs at the Ministry of Energy and Infrastructure, United Arab Emirates, says that digitalisation is central to the shipping industry, with innovation in areas such as autonomous ships driving change within the industry. “Autonomous ships are a hot topic. The Covid pandemic highlighted the difficulties ship owners were facing during the crew change crisis, pushing ship owners to support the autonomous ships project. As most accidents are due to human error, the aim is that this innovation will reduce the risk of accident, casualties and insurance costs.”
More than two-thirds (69%) of legal decision-makers see business model innovation as important, while nearly half (48%) increased their investment in digital capabilities in 2021 compared to the previous year. (see Fig 9)
Autonomous ships are a hot topic. The Covid pandemic highlighted the difficulties ship owners were facing during the crew change crisis, pushing ship owners to support the autonomous ships project. As most accidents are due to human error, the aim is that this innovation will reduce the risk of accident, casualties and insurance costs.”
At a sector level, more than half (52%) of legal decision-makers working in financial services consider innovation to be at the core of their business and central to growth, with the defence and security, transport and logistics and healthcare and life sciences industries particularly clear of the importance of innovation to their organisational performance. (see Fig 10)
In financial services, Nasreen Bulos, Regional General Counsel for MENAT at HSBC, says digital banking is a strategic priority for the business and so there is a focus on aligning the legal team around that.
Such innovation requires an upskilling of legal teams, often demanding a multidisciplinary approach from in-house lawyers addressing many areas of law. “You have to understand the product you are trying to deliver in a digital way and apply a variety of traditional legal principles to novel applications,” says Bulos. “To be effective, we have to be able to work in a multidisciplinary fashion. That is the biggest challenge: figuring out a way to bring together legal expertise of our various teams without slowing things down.”
There is also a need for regulatory frameworks to evolve in order to keep pace with technological change. While 38% of the legal decision-makers we surveyed say that the legal framework within the region is supportive of technological advancements, a third still feel that it still needs to improve.
Urvaksh Doctor, Senior Legal Counsel MEA at fintech business FIS in Dubai, argues that while regional regulators may not be first-movers on digital banking regulation, they are able to learn from other jurisdictions: “The region may not be at the forefront of developing fintech regulation, but the advantage the regulators have here is that they are biding their time and then taking the best from other jurisdictions. They have the right expertise, are well staffed and will be able to come up with the right finished product, based on seeing what works elsewhere.”
Goktug Seckiner, Managing Director and Board Member at hospitality business Dogus Group, says: “We see a big role for technology in the restaurants space. The restaurants that have blended technology with visual arts and artificial intelligence are seeing a leap in what they are charging customers per head. When we talk about these disruptions, next comes regulation, as the legal side has a huge responsibility to implement an efficient market.”
He adds: “The UAE is one of the countries that is leading these developments. They are always ahead with using technology, implementation of the technology and then regulating the technology.”
We see a big role for technology in the restaurants space. The restaurants that have blended technology with visual arts and artificial intelligence are seeing a leap in what they are charging customers per head.”
According to Captain Abdulla Al Hayyas, Acting Director of Marine Transportation Affairs at the Ministry of Energy and Infrastructure, United Arab Emirates, current legislation has not been able to keep pace with the growth of autonomous ships. “The industry is moving faster than the legislation when it comes to autonomous ship building,” he says. “Due to the lack of legislation, approval is given on a case-by-case basis.” (see Fig 11)
Our survey finds that technological change is now helping legal leaders to better identify, measure and mitigate the risks facing their business, as companies in the region begin to embrace the use of technology within the legal function.
Nearly half (46%) say that they are currently investing in legal technology, with the majority focusing investment on data security tools, cloud-based databases and e-signing tools.(see Fig 12)
Mona Madi, Legal Director – Head of Legal & Compliance IMEA at consumer products business Henkel Jebel Ali FZCO, says there is a need to apply technology on a market-by-market basis. She says: “Electronic signatures, for example, can work in some jurisdictions, while in others we would not want to rely on those because in the event of a dispute the admissibility of those documents may be problematic. We do have tech-related initiatives globally when it comes to contract management and databases, and that’s definitely something we continue to look at. But we also have to assess the applicability to each market.”
At sports and events business Flash Entertainment, General Counsel Fraser MacKinven says his team had introduced several tech solutions before the pandemic that proved invaluable. “We had just implemented DocuSign, or electronic signing, before the pandemic, and also contract automation software that allows our commercial teams to develop their own basic contracts for the legal team’s review. We were able to do a lot of things electronically that might previously have required a lot of physical interaction.”
He adds: “There is an obvious upside to that for the legal team, because as well as saving time and being able to get those urgent contracts in place properly and quickly, it also frees up our time to work on more complex projects where we can add more value.” He concludes by noting “the best result was that, when our contracts started to get stress-tested due to Covid (with cancellations and force majeure claims etc), they held up.”
Urvaksh Doctor points out that the US-based Chief Legal Officer for FIS, Caroline Tsai, is a huge supporter of automation. “She believes global law departments should embrace technology and automation enabling the team to strategically focus on higher risk and complex issues. By using contract automation processes, we reduce the time burden on the legal team to manually review contracts and that’s certainly something we expect to do more of in the coming years,” he says. (see Fig 13)
