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Technology, over the past two decades, has improved vastly the level of efficiency of real estate lawyers. The impact of technology on real estate practice will deepen during the coming years, as lawyers begin to use technology not only to quicken the pace of real estate practice, but also to change fundamentally the processes that real estate lawyers use in delivering legal services to their clients. Real estate lawyers will rely on advanced software to manage their knowledge and experience, perhaps their most valued asset, and therefore streamline the legal process in exciting new ways. In 1986 (when the writer of this article started practicing law), the secretaries in law firms used IBM Selectrics, and corrected their mistakes using liquid correction ink that matched the color of the firm’s letterhead. Firms used fax machines that were clunky and slow. Only rich and powerful people carried large and expensive portable telephones. Lawyers relied on overnight delivery services to transmit documents. Junior lawyers spent hours blacklining documents by hand. The administrations of law firms did not even conceive of installing computers on lawyers’ desktops. Now, 18 years later, many lawyers rely on their desktop computers to a substantial degree to conduct their practices. They rely less on secretaries than in the past, since technology now handles many of the tasks that secretaries performed previously. Many use software to blackline documents in seconds. They use e-mail to deliver documents instantly, and rely much less significantly on delivery services. Lawyers respond to clients quickly using wireless handheld devices and cellphones. They take their practices on the road by using systems that allow them to access their firms’ computer network from anywhere. There exists little reason to expect that the pace of technological change will slow over the next 18 years, particularly after taking into account the emerging trends that will challenge the real estate industry to become more efficient and more competitive. Some commentators fear that in the coming years the market for office space in cities such as New York, San Francisco or Chicago will soften as companies establish huge facilities for white-collar workers in countries such as India, the Philippines and South Korea, where the cost of educated labor is a small fraction of the costs of hiring similar workers in the United States. Other real estate experts note that companies that seek the most technologically advanced office space in the world now look to cities such as Shanghai, China; Singapore; and New Delhi, India, rather than New York, London or Los Angeles. Still others caution that since many tenants use office space to house huge quantities of paper, the mere shift over the next decade to paperless business activity could reduce the demand for office space by as much as 10% to 15%. Real estate lawyers in major markets will use technology as a means to become more efficient and more competitive in the global marketplace and thereby meet these challenges. Upcoming years of change The technological development that will occur over the next 10 years will have a more profound impact on the practice of real estate law than the changes in legal practice wrought by technological improvements over the past two decades. The technological advances that have occurred to date have made real estate lawyers more efficient by quickening the pace of legal practice. Yet the basic process of lawyering has remained static. Commercial leasing lawyers, for example, still generally use a basic lease form as a starting point in a lease negotiation, and then modify the basic form during the course of the negotiation to reflect the evolving terms of the transaction. Technological advances in the future will change this basic mode of practice, allowing lawyers the flexibility to produce documents quickly and efficiently that reflect all of the nuances of a particular lease transaction. For example, a typical real estate lawyer in a major market who represents the landlord, in the current state of affairs, would start the leasing process by using either a basic lease form that a trade organization promulgates, or a basic lease form that the lawyer has developed over the years in conjunction with the client. The lawyer would adapt the lease to reflect the basic terms of the proposed transaction as reflected on a term sheet that the client sends to the lawyer, but would otherwise leave the remainder of the lease form intact. The lawyer, by using a lease form, serves the client’s objective of producing the first lease draft quickly, and leaves to the opposing counsel the task of sifting through the details of the lease and identifying the issues that require discussion between the parties. This strategy also allows the landlord’s lawyer to claim that the tenant’s lawyer is slowing the progress of the transaction by presenting many comments to the proposed lease (even though neither the landlord’s leasing representative, nor the landlord’s lawyer nor the landlord’s broker has spent the time to truly adapt the basic lease form to the specific terms of the particular proposed lease transaction). There is technology that the real estate lawyer can use to diminish his or her reliance on a lease form to satisfy the client’s expectation that the lawyer will produce a lease quickly. The lawyer, using document-assembly technology, can access a system that stores in a coherent manner all of the variations that the parties could reasonably expect to include in a commercial office lease. Many real estate lawyers may react viscerally to this proposal, thinking that there really is no existing way to include in one cohesive system all of the variables that the parties could include in a commercial office lease. There is no doubt that the task of categorizing and integrating all of the potential variables in a commercial lease is a daunting task. Yet most real estate lawyers would agree, for example, that while the number of ways to draft an assignment and subletting section of a lease may be substantial, the number is nevertheless finite. A thoughtful and diligent lawyer with lots of free time could code a complex computer program that would take into account every variation in the assignment and subletting section (and then further update the computer program from time to time as lawyers develop new variations to the assignment and subletting section). Computers have enough processing speed and storage capacity to manage effectively the collective experience of real estate lawyers in a single, integrated system. Imagine it Lawyers could envision such a system that manages collective legal knowledge and experience. A user would access the system, which then leads the user through an interactive questioning process regarding a proposed lease transaction (which corresponds to the questions that the lawyer would ask the client if the lawyer were interviewing the client personally). The system uses the information that the user provides in the early part of the interview to generate more questions as the interview progresses. For example, the system may request the user to identify the basis on which the tenant will pay for electricity. If the user specifies that the tenant will pay for electricity on a submetering basis, then the system may request the user to identify whether the landlord will charge the tenant an additional amount to read and administer the submeters. The user, after answering the questions that the system presents, will then use the software to generate in seconds a well-written, cohesive lease document that reflects all of the particular terms of the proposed lease transaction. The lease document would contain updated cross-references, a complete list of exhibits, an alphabetized list of defined terms, an updated table of contents and no typographical errors. The lease document would not contain any of the shortcuts that lawyers who work under time pressure insert (such as paragraphs that start with the phrase “notwithstanding the foregoing”). Most importantly, the lease document truly reflects all of the nuances of the proposed lease transaction. Various profound implications of this concept exist. A real estate lawyer who practices as part of a group of real estate lawyers will now have access to the collective knowledge of his or her colleagues, thereby allowing the real estate lawyer to practice much more efficiently. Most real estate lawyers, under the current system, do not spend the necessary time to update basic lease forms continually, so a real estate lawyer may spend time thinking about, and drafting lease provisions for, a particular lease concept that his or her colleague may have already addressed only days earlier. The real estate lawyer struggling with the new concept would work much more efficiently for the client if he or she could access a colleague’s knowledge and experience in a simple manner. Real estate practice groups using such a system will become more efficient because more junior lawyers will have access to the knowledge and experience of the more senior lawyers to produce high-quality lease documents. Supervising lawyers will need to review only the particular answers that junior lawyers provide in the interview process, rather than the lease document itself (since the generation of the lease document is an entirely mechanical step in the process that derives from the answers that the user provides in the interview process). Clients will benefit because junior lawyers will have access to a tool that enables them to produce first-quality documents that duplicate the documents that a senior lawyer would have prepared (if the senior lawyer had prepared the document manually). The ultimate flexibility that the new system delivers does not slow the leasing process. On the contrary, the system decreases substantially the time that a lawyer requires to produce the first draft of a lease. The interview process, which remains somewhat complex and may take one to two hours to complete, defines the time that the lawyer requires to prepare the lease draft. Once the lawyer completes the interview process, the lease draft generates in seconds. The lawyer does not wait for the word processing department to find a typist, finish proofreading or generate the table of contents. The lawyer does not need to cut and paste provisions from other leases (which may have to first be converted from the format of a different word processing program). The system deals with all of the technical aspects of preparing the lease, leaving to the lawyer only the responsibility of using his or her judgment to decide which concepts that the system should include in the lease document. Such a system also has profound implications for the industry in general. The real estate industry will begin to regard the answers to the set of questions (which are stored digitally in a computer’s memory) as the true embodiment of the lease, rather than the actual lease document that the system generates. The answer set, after all, contains the thousands of bits of information that the lease ultimately depicts as words on a page. Since the answer set exists in a digital form, the real estate industry can use the answer set for purposes other than the generation of lease documents. For example, a real estate broker could use the answer set to generate a term sheet that summarizes the lease concepts. A property manager could use the answer set to generate a report that describes the lease provisions that govern the landlord’s charges for overtime air-conditioning. The finance department could use the answer set to load the financial information directly into the company’s property management software, thereby completely avoiding the slow and imprecise process of lease abstracting that real estate companies currently endure once the landlord and the tenant sign a lease. Perhaps lawyers will not even participate in the lease-documentation process personally. Technology will allow users to conduct the interview process remotely, over the Internet, thereby providing the means for a landlord’s leasing agent, for example, to access the totality of the knowledge and experience of his or her lawyer (without the leasing agent’s having actually to speak with the lawyer). The system mirrors the process that the lawyer would have otherwise conducted personally with the leasing agent. The system interviews the agent about the terms of the proposed lease transaction, and then draws on its vast store of knowledge and experience to draft, in seconds, a first-quality lease document, that reflects all of the nuances of the proposed transaction. Give the future a chance Many lawyers will reject the system described here either because they conclude that technology will never truly advance to the necessary extent, or because they fear that the system will put them out of business. The answer to the first contention is that the future has arrived. The type of technology discussed here is already embodied in the author’s firm, and is being used every day to generate complex leases, term sheets and brokerage agreements for clients in a fraction of the time than was required previously. Indeed, some clients use the system remotely to generate lease documents on their own. The technology exists and will continue to improve in the coming years. There are several answers to the second contention (that the system will put real estate lawyers out of business). First, perhaps contrary to popular belief, lawyers do not come to work each morning with the intention of being inefficient for their clients. Most real estate lawyers will welcome the opportunity to use a system that makes them more efficient for their clients (and thereby strengthens the good will that is essentially the only bond between the lawyer and his or her client). Second, while the system streamlines the lease-documentation process substantially, the system highlights that there exists no substitute for a lawyer’s judgment and experience. The computer program does not define the answer set. Only a knowledgeable human being, with the requisite judgment and experience, can do so. The system frees the lawyer to focus on counseling the client, rather than the more mundane task of drafting the lease document. Finally, the system could even provide a means for the lawyer to free himself or herself from the limitations of billing on an hourly basis, and focus instead on the value the lawyer provides for the client by counseling and advising on the formulation of the answer set. Junior lawyers who first hear about the system question whether the system will impede their development (because the system prepares the lease, rather than the lawyer). While junior lawyers who use the new system will not gain experience in the more mundane aspects of practicing law (such as the understanding of all of the nuances of their word-processing software or the digging of old forms out of files), they will have more time to focus on the substantive issues that arise in lease negotiations and on the understanding of the implications of each of the different lease alternatives. Perhaps the advent of handheld calculators in the early 1970s provides an apt analogy. Cynics at the time proclaimed that people’s brains would turn to mush because people would no longer perform long division manually. While it is probably true that today, 30 years later, most educated people could not perform long division manually, it is also true that most people’s brains have not turned to mush. People use calculators so that they can devote more time to other substantive tasks. The new system provides similar benefits. Perhaps the most important benefit of the new system is the enhancement of the image of lawyers in the lease-documentation process. The new system will enable a lawyer to prepare a lease document for his or her client (on whatever terms the client desires) an hour or two after the client specifies the terms of the new deal. Since the new system could function essentially as a clearinghouse for all lease alternatives, opposing lawyers can focus on the answer set (which embodies the true agreement of the parties) rather than on the more mundane task of drafting the words for the lease document. Clients and brokers would see lawyers as contributing to the process of completing a complex lease transaction quickly, rather than as a necessary evil that must be overcome in the completion of the lease transaction. Real estate lawyers should welcome the prospect of technology’s further enhancement of their practices over the next 10 years. While it makes sense to consider each new technological development with a healthy dose of skepticism, lawyers should recognize that technological advances will continue to shape legal practice. Lawyers with an open mind will find that the new systems provide an exciting and dynamic basis on which to practice. Ronald D. Sernau is a partner in the real estate department of New York’s Proskauer Rose, where he is an avid user of the Proskauer Commercial Leasing System, a software system developed by Proskauer Rose for its real estate practice.

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