Law of Innovation, Innovation of Law

Sometimes turbulent, often creative and always necessary, the constant dialogue between the law and technology is transforming both sectors. Jérôme Frizzera-Mogli, Director of Innovation at the EDHEC Augmented Law Institute, and Arnaud Billion, Associate Professor at EDHEC and researcher within the EDHEC Augmented Law Institute, are closely observing these new hybrids.

The law defines the scope of what can be done on technological innovation; it tries to write rules and set boundaries. Technological progress changes the role of legal work in how companies operate. The EDHEC Augmented Law Institute facilitates movement between these two poles by bridging research, companies and technology players.

The Law as a Shared Language for Shaping Innovation

Technological innovations often make it hard to name and describe what is new. AI is changing our understanding of what a tool is, according to Arnaud Billion, by breaking free from “linear monocausality”. The researcher points to a fundamental gap between traditional tools and AI agents. The latter not only prompt their users but also collect information and synchronise with other Tools to steer what the user does. “There is feedback, there are black boxes, and there is an integrated dimension involving software and networks,” he explains.

The law can play a central role in giving innovation the “equipment” it needs by defining more specific criteria or ensuring a degree of control over how it operates. “It can be a filter for generating more desirable innovation. It should allow us to select what changes will benefit a company, its employees, its partners and society more broadly. It can facilitate dialogue between IT specialists, lawyers and business departments, all of whom should recognise what is valuable about technologies while noting their limits,” says Arnaud Billion.

To illustrate this, he highlights the example of the Dark Pattern Assessment, a tool developed within the EDHEC Augmented Law Institute. Its purpose is to identify manipulation techniques encoded in certain digital tools, mechanisms like the well-known practice of turn-taking. Very common in large language models, turn-taking consists of constantly proposing a new interaction after a response.

How Technology Is Reshaping the Legal Operating Model

Other technologies are going in the opposite direction. Whether linked to AI, platformisation or data processing, they are redefining where the practice of law sits within company and it helps create value. Jérôme Frizzera-Mogli says the legal profession’s ability to adapt is being tested by many rapid upheavals. “Digitalising low-value-added tasks, technological trade-offs and integrating very rapid changes in areas like the widespread adoption of electronic signatures are essential tools for creating value.”

Some tools, like specialised generative AI systems and CLM (Contract Lifecycle Management) platforms, are changing how we work and what skills are transferable. “People need to develop cascading skills. Using AI is key, but this goes along with working on oral communication, for example, which is linked to a growing need to explain things,” says Jérôme Frizzera-Mogli. Even more fundamentally, the entire economic balance of the corporate legal profession is being called into question. “Generative AI saves so much time that it directly challenges the use of time as a unit of work and transaction,” the researcher says. Having been a determining factor, time spent can no longer be used to estimate quality of service, which is prompting legal departments and lawyers to rethink how they create value.

The EDHEC Augmented Law Institute is at the Forefront

Harnessing emerging technologies is redefining the balance of the legal ecosystem and opening up new growth opportunities. The EDHEC Augmented Law Institute sits at the intersection of a wide range of legal stakeholders and plays a facilitating role. “We prefer a relatively classic approach to agile innovation. We can both capture pain points and address them,” says Jérôme Frizzera-Mogli. The institute draws on a wide range of tools to deliver on its mission, generally working with its startup studio, Augmented Law Ventures.

This studio capitalises on EDHEC’s unique ability to harness research teams, develop technological tools and think through how to monetise them by working directly with the market. “We are a multidisciplinary team at the cutting edge both of legal research and using and evaluating AI,” says Jérôme Frizzera-Mogli. The studio uses a threefold model via smart equity and targeted shareholdings, developing prototypes from scratch, and providing services for partners.

Some tools developed within the studio have already found their model. These include the legal performance index and the Legal Performers transformation radars. “Companies can evaluate themselves on a maturity diagram somewhat like Gartner’s Magic Quadrant, which helps show their technology blind spots,” says Arnaud Billion. Another solution called Benchmark AI gives companies and particularly their legal departments a clearer way to navigate the vast range of legal AI solutions. The tool assesses how various market players perform and how much they are trusted.

Legal departments are navigating a highly dynamic sector shaped by tectonic changes, unexplored weak signals and catastrophic narratives. They need reliable partners more than ever. This is what EDHEC Augmented Law Institute aims to do. “We take a techno-realist perspective and look at things for what they are. We are developing a methodological approach that consists of setting aside stories that are a little too good to be true, or options that would require unlimited resources, and focusing on what is desirable and affordable,” says Arnaud Billion.