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The Best LegalTech Stack is No LegalTech Stack - part I

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I'm fortunate that next week I'll be attending the Alternative Events In-House Technology Summit in the UK. I'm looking forward to seeing some old friends and making some new ones (assuming the coffee will be strong and plentiful enough to counteract the red eye from Toronto).

One of the scheduled sessions is a forward-looking vision for the corporate legal teams' tech stack. I'm interested to hear the panel's views on this. My view is perhaps a little counterintuitive; the best tech stack is no tech stack. No, it's not really feasible I don't think, but even by using the word stack, it implies that "more is better" (see pancakes, cash, pillows, books).

While that may be true in some circumstances, it doesn't always ring true when you consider the second and subsequent-order effects of technology buying decisions. What does that mean?

Let's use an example we're probably all familiar with; buying a new (larger) house. With a growing family, we've decided it's time to upgrade our home to something larger so our fictitious children (2 boys and 2 girls!), can each have their own room rather than sharing.

The first order effects of the buying decisions are pretty straightforward. To buy a bigger house, you're probably going to pay more (for this illustration we are going to pay more), you'll get a bigger house, with a bigger yard, and you'll need to go to the suburbs to get it within your price range.

Some of the first order effects of the buying decision could be considered positive (bigger house, yard) and some could be negative (bigger price, move to suburbs) or even neutral (maybe you want to move the suburbs or don't have a preference).

The second order effects are also pretty straightforward, but often overlooked as they aren't readily apparent, and the time gap between when you buy the house and when these effects reveal themselves is often months, so you discount their impact or don't want to make the explicit connection between the new house purchase and these new effects (ie. confirmation bias).

These second order effects can include more debt (-), higher mortgage payments (-), more room for family gatherings (you decide if + or -), more yard maintenance (-), higher insurance payments (-), longer commutes (-), less family conflict now that everyone has their own room (+).

Most people don't get past the first order effects, let alone considering the second order effects. Why? It's hard and it can be painful to engage System 2 thinking (RIP Daniel Kahneman).

Failing to consider second- and third-order consequences is the cause of a lot of painfully bad decisions, and it is especially deadly when the first inferior option confirms your own biases. Never seize on the first available option, no matter how good it seems, before you’ve asked questions and explored.

Ray Dalio

But wait, there's more! Even the effects have effects, so third and subsequent-order effects should also be considered. With higher mortgage rates, there can be more stress put on the income earners to stay in jobs they don't like (-), there is less leisure time due to more yard work and commuting (-), you need to buy a new riding lawnmower to cut the bigger yard (-/+), higher car costs from more gas, more insurance, or even the need for another car (-). And we haven't factored in the neighbours!

How do you know it was a good decision to buy the new place? If you add up all the positive and subtract all the negative values, you'll get a better sense of whether it was a net positive or net negative value.

A simple rule for the decision-maker is that intervention needs to prove its benefits and those benefits need to be orders of magnitude higher than the natural (that is, non-interventionist) path. We intuitively know this already. We won’t switch apps or brands for a marginal increase over the status quo. Only when the benefits become orders of magnitude higher do we switch?

Shane Parrish

Ok, but we were talking about LegalTech, right? Yes, let's explore the value of a LegalTech Stack next in Part II by using the same kind of analysis.

The Best LegalTech Stack is No LegalTech Stack- part II

Now with the preamble out of the way from Part I, let's drill down into the LegalTech Stack issue.

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