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The Changing Lawyer - Brave New World

Posted by Litera Microsystems


The Changing Lawyer - Brave New World

by Litera Microsystems

With technologies such as AI and blockchain accelerating at a rapid rate, law firms must ensure they're not left behind.

The recent news that the EU is considering whether to grant robots legal personhood is the latest to stoke up the debate about AI and what it might mean for the world in five to ten years’ time.

As far as the legal profession is concerned, the context is one of rapid growth in the volume and sources of data requiring legal review, increased regulatory scrutiny and unprecedented fines and legal settlements. Leading law firms are already adopting new methods to stay relevant and competitive, and lawyers are seeing technology such as AI and blockchain take off in other areas, notably financial services.

Neota Logic’s Richard Seabrook suggests the profession is now entering the first of three phases that will transform the way it works.

Phase one: task automation

“The place we’re in today we call automated legal practice. That involves technologies being introduced to the legal services market that are automating the work.” Specifically, he points to contract analytics tools such as Kira and RAVN, collaboration tools like HighQ, document technology solutions such as Microsystems and legal research tools like ROSS.

“It’s not fundamentally changing the way in which the market operates, it’s changing the work that is done and it’s automating for efficiency. It’s making the workers work smarter and faster, and it means they’re costing clients less. That’s where we see the market today.”

Phase two: expertise automation

To explain what may happen next, we should perhaps look no further than one of the most well-known business disruptors of them all, cab company Uber.

In this case, technology connects people who need to go somewhere with people who are willing to drive them there at affordable prices. The same concept may soon apply in the legal space, where technology can connect the experts—the lawyers—through algorithms to the companies and individuals that need those services. This vision is of a much more all-round digital environment and a place where technology starts to take over the role of governing the interaction between client and expert.

The vanguard of this particular future is already with us. ComplianceHR, for example, designs applications for legal professionals that provide answers to complex compliance questions. Companies and individuals can, effectively, access the expertise, advice and legal services of a firm without actually having to talk to a human.

Phase three: algorithm is king

The third phase may be in the future, but there are one or two examples that demonstrate what it may look like. Among them is New York-based Droit Financial Technologies, which last year received $16 million from Goldman Sachs and other investors to fund development of products that provide point-of-execution compliance for sales and trading systems in financial institutions.

Others are also building algorithms that companies such as banks can implement into their systems to provide real-time preventative monitoring and compliance risk management. The idea is to take all the expertise of professionals such as lawyers and create algorithms that sit inside the companies and run at a permanent state. In theory, the issues can then seamlessly adapt to changes in the regulations as they come about—with financial regulatory markets leading the take-up of such innovations.

Professional services firms are also looking at the potential of blockchain technology as a way of simplifying their processes and delivering their expertise. Originally developed as the backdrop for cryptocurrencies such as Bitcoin, the blockchain allows a standardized set of tools to exchange information between people, organizations and their assets. It has been compared to a public ledger, keeping a realtime, accessible record of all the transactions that have occurred in a network.

Financial giants such as Citigroup, Credit Suisse, and JPMorgan Chase are already investing in the technology, hoping that it will ultimately reduce their costs while simultaneously reducing risk.

For lawyers, blockchain is still in its infancy. But its ability to share secure information among interested parties could have huge potential in areas such as smart (ie self-executing) contracts, intellectual property, and land registry.

“We’re faced with some really interesting questions about the part lawyers will have in the future,” says Seabrook. “The whole concept where your expertise is modeled into software allows you, the expert, to leverage it far more than you would ever be capable of yourself.

“We have a client in the US (Foley & Lardner) that built a set of algorithms that in theory will protect companies from breaches of the Foreign Corrupt Practices Act. If they could implement those in every organization that was subject to those regulations there would be no need for any other lawyers in the world to practice law in that area.”

Extrapolate that concept and we’re in a world where law firms have gone from competing for human talent to competing for algorithms.

85% of law firm leaders recognize that using technology to replace some human resources is a permanent trend.  Source: Altman Weil (2016)
700 legal tech start-ups have been formed over the past five years.
Source: Tracxn (2016) 

The end of lawyers?

Does this mean, then, the end of lawyers, as predicted by author and tech visionary Richard Susskind? Perhaps at one level, although Susskind also points out that people will be needed in hitherto unexpected—but equally legally focused— jobs “in droves.”

“There’s a lot of discussion now about the role AI should play in law firms and how it can be used to create a more streamlined service,” says Avaneesh Marwaha, CEO of Litera Microsystems. “The legal marketplace needs to focus on the tactical uses of AI and what it can deliver.

“By making use of AI, lawyers can still be lawyers. They can still focus on the legal matter at hand, on communication, on writing briefs and negotiating. AI should be used to assist in those processes: with the lawyer at the center of everyday business, but assisted by machines.”

We may also see additional skills to those in the market today—for example, people with legal product management expertise. Firms will have to think strategically about what sort of services they want to offer, how they package them up, what technologies are required to make them come to life, how they price them, what partnerships they enter into and how they distribute them.

Doing nothing, however, is not on the list of options.


“Firms ignore AI at their peril,” suggests legal profession analyst Richard Tromans. “If the technology is already being adopted by the leading transactional law firms, in five to ten years we’ll be a lot further down that road.”

Tromans, who advises firms on the implementation of AI, is adamant that they need to see it as more than just a tech issue. “Management teams need to understand that they can’t simply hand over the AI project to the IT group and then forget it, because the IT team may not be best placed to see how to use it.

“They’ll understand the underlying technology, but they may not grasp the strategic implications of how this will change your relationship with your clients, your leverage model, your billing and remuneration model, how it will alter the way you market the firm and how it can be used not just in one practice area but across the entire firm – if used imaginatively.”

While the input of the IT specialists in a firm will be important, the implementation of AI needs to be dealt with at a senior management level. “In that respect it is like a merger,” Tromans suggests. “You wouldn’t hand a merger transaction just to the accounting department because it is something that will increase revenue. It’s a strategic decision and the same is true of AI.”

As more firms look at integrating AI technology into the day-to-day workflow of their practice groups, it seems an impact on certain roles will be guaranteed—for example, those focused on low-level document-review tasks.

“I think we’ll see more paralegals being pushed upwards and doing higher-value work,” says Tromans. “I’d also expect to see some paralegals and perhaps junior associates working with the AI systems. Having said that, I expect a lot of AI won’t need special skills and knowledge—it’ll just be an icon on your desktop.”

Use of Technology In-ouse is Increasing

The crucial factor, he believes, is to not be left behind. “Fundamentally, what AI does is make a law firm more productive and allows it to take on more work. That will generate more activity for its lawyers. AI could therefore directly result in the growth of law firms, because there will be more work flowing into the firm. What we might see is that the law firms that don’t have AI systems will be the ones that will shrink, because they won’t be able to compete with the productivity that firms with AI have.

“After all if you’re paying for a service and one supplier says, ‘that will take two weeks and we’ll charge you by the hour,’ and another says, ‘that will take us two days and we’ll charge a fixed fee’—which would you choose?”




Originally published by Litera Microsystems 2017.  To read the full publication click here. The Changing Lawyer document was created by Litera Microsystems and distributed in the Red Carpet Club - United Airlines over the 2017 Holidays. While it has no copyrights or publication information, all credit goes to Litera Microsystems . 

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