How Artificial Intelligence is Going to Transform the Legal Sector

How Artificial Intelligence is Going to Transform the Legal Sector

In summary: AI’s impact on law.

Pressure to innovate
: Legal startups and even accounting firms are starting to offer legal services that were once the exclusive preserve of traditional law firms.
Rising costs: Legal costs rise due to vast data, but affordability concerns start to arise with clients resistant to these billable hours.
AI lends a hand: Cognitive computing platforms have expanded the possibilities, developing new legal technologies to understand law principles.

Although the legal sector is notoriously reluctant to absorb new technologies, artificial intelligence (AI) will likely cause severe disruption to the industry soon.

Innovations in AI are introducing new possibilities that make technology increasingly valuable for the legal profession and have the potential to reduce the costs of seeking legal advice.

AI, specifically created for the legal industry, now has the potential to fulfill tasks that previously could only have been performed by human intelligence. It introduces the potential for radical change in the industry, including changing the lawyer’s role.

The legal profession is known for its aversion to risk and innovation. Add to that reluctance to embrace any technology that threatens jobs, requires new skills, and intense pressures to resist AI from within the industry.

Legal costs represent a large chunk of many businesses’ outgoings, so any innovation that reduces these costs will likely be welcomed by clients and give any supplier offering it a competitive edge. But there are many external pressures to innovate. For a start, clients are starting to demand change.

There’s also an increasing threat of legal services being met by non-traditional sources.

‘Lawtech’ startups and even accounting firms are starting to offer legal services that were once the exclusive preserve of traditional law firms. Faced with these pressures, even the most Luddite law firm faces increasing pressure to innovate.

Rising costs of legal services

No wonder legal costs are so high. An increasing amount of legal information means that the body of data that lawyers have to sift through is astronomical – and all this research needs to be paid for by someone.

With clients increasingly reluctant to pay for these billable hours, the legal industry needs to answer questions about its service’s affordability.

By making legal services affordable to a greater number of clients, law firms would have a wider client base.

At the same time, any change in the industry that reduces the number of billable hours will inevitably find internal resistance.

Technology that reduces the number of people power required to resolve a case will almost inevitably lead to job losses. It’s also likely to benefit lawyers with broader skills or willingness to engage with the technology.

It will introduce new job roles, such as project managers and IT managers, that previously weren’t so vital to the practice of law. Introducing technology will change the hierarchy of many firms, benefitting individuals with particular skills and aptitudes.

E-discovery is widely used in the legal industry, helping lawyers sort through vast volumes of documentation.

Existing legal tech is mainly based on keyword search: sorting through volumes of data to find keywords that are identified as relevant to a case.

New developments in AI by teams such as those using the Watson cognitive computing platform have expanded the possibilities, developing new legal technologies such as ROSS based on cognitive computing. Essentially, programmers have taught computers to understand the principles of law.

This new technology is accessed using natural language, making it easier for lawyers to use without unbillable hours of specialist training.

In contrast to other e-discovery technology used in the legal profession, ROSS doesn’t depend quite so much on the right keywords being inputted. Still, it will be able to answer legal queries using natural language instead.

This way, it works like a human lawyer being asked a technical question and giving advice and legal insight using their knowledge and experience.

Thanks to advances in artificial intelligence, the system is also self-improving. It will take feedback and use it to improve its performance.

Human intelligence remains important

Despite recent advances, human intelligence is still irreplaceable. Much of the technology in use by the legal industry can only replace the burdensome research element of legal practice.

Human lawyers still need to construct an argument, correspond and negotiate with all parties, and draft policy.

But there’s also change to these areas of legal work. Software to help draft contracts, or to manage the workflow of doing so, is now well established in the industry.

New technology such as MarginMatrix also reduces the time it takes to draft documents such as legal contracts and meet compliance obligations by checking the requirements in different jurisdictions.

Lawyers must adapt their working practices to accommodate these tools to remain competitive against outsourced services.

It’s thought that blockchain technology, a public ledger that records all transactions between two parties, will likely impact the legal industry in the long term.

The profession needs to understand this technology because it impacts on many existing practices, such as in contract creation, land registry, and intellectual property rights.

With some jurisdictions already starting to use blockchain to manage these legal matters, the legal profession needs to be prepared for this to avoid becoming obsolete.

Very junior lawyers previously handled the legal heavy lifting that’s now being partially replaced by technology, and these relatively inexperienced professionals are likely to be most affected by technology adoption.

With new associates spending around a third of their time conducting legal research, this presumably means a third fewer legal graduates need to be employed by law firms.

This will impact employment in the profession, particularly for new graduates. It will also mean fewer lawyers working their way up the ladder to more senior and experienced roles.

A study by Deloitte estimated over 100,000 legal sector jobs would be lost in the UK over the next two decades because of technology.

That’s bad news for law graduates, but arguably the changes are good news for businesses and individuals seeking affordable legal advice.

It’s likely that some of the new technology could help reduce costs, a saving which will hopefully be passed on to clients.

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