Report: artificial intelligence will cause “structural collapse” of law firms by 2030

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1 December 2014


AI: computers that ‘think’ spell doom for many lawyers

Robots and artificial intelligence (AI) will dominate legal practice within 15 years, perhaps leading to the “structural collapse” of law firms, a report predicting the shape of the legal market has envisaged.

Civilisation 2030: The near future for law firms, by Jomati Consultants, foresees a world in which population growth is actually slowing, with “peak humanity” occurring as early as 2055, and ageing populations bringing a growth in demand for legal work on issues affecting older people.

This could mean more advice needed by healthcare and specialist construction companies on the building and financing of hospitals, and on pension investment businesses, as well as financial and regulatory work around the demographic changes to come; more age-related litigation, IP battles between pharmaceutical companies, and around so-called “geriatric-tech” related IP.

The report’s focus on the future of work contained the most disturbing findings for lawyers. Its main proposition is that AI is already close in 2014. “It is no longer unrealistic to consider that workplace robots and their AI processing systems could reach the point of general production by 2030… after long incubation and experimentation, technology can suddenly race ahead at astonishing speed.”

By this time, ‘bots’ could be doing “low-level knowledge economy work” and soon much more. “Eventually each bot would be able to do the work of a dozen low-level associates. They would not get tired. They would not seek advancement. They would not ask for pay rises. Process legal work would rapidly descend in cost.”

The human part of lawyering would shrink. “To sustain margins a law firm would have to show added value elsewhere, such as in high-level advisory work, effectively using the AI as a production tool that enabled them to retain the loyalty and major work of clients…

“Clients would instead greatly value the human input of the firm’s top partners, especially those that could empathise with the client’s needs and show real understanding and human insight into their problems.”

Jomati pointed out that the managing partners of 2030 are in their 30s today and will embrace the advantages of AI. Alternative business structures (ABSs) in particular will be receptive, it predicted, “as it will greatly suit the type of matters they handle”.

It continued: “With their external investors able to provide significant capital, they will invest in the latest AI when it becomes available and use it to rapidly increase the volume of matters. This increased efficiency will not harm their model, but rather make the shareholders in their narrow equity model extremely wealthy.”

For associate lawyers, the rise of AI will be a disaster: “The number of associates that firms need to hire will be greatly reduced, at least if the intention is to use junior lawyers for billable work rather than primarily to educate and train them ready to become business winners.

“Firms will struggle to overcome this gap in the usual career paths of their lawyers, i.e. firms need to hire young lawyers to become the next client winners, but they will be far less profitable at the start of their careers when knowledge bots take over most work up to [three years’] PQE.”

On the impact of AI on law firms, Jomati concluded: “The economic model of law firms is heading for a structural revolution, some might say a structural collapse. We may have heard a lot about ‘New Law’ and [ABS], but the impact of AI will make such developments pale in comparison.”

Small, specialist advisory firms and those focused on process matters might not be affected by AI, the report predicted, adding: “The firms that will be most affected would be the very large, high-value commercial firms whose associates expect to be given interesting work and many of whom aspire to the status and wealth that equity partnership affords. These fee-earners are also incredibly profitable as they clock up the hours on matters the partners have brought in.”

The report forecast a big rise in the number of cities of over 10m people. Jomati’s top five cities in 2030 for their legal markets were New York, London, Paris, Frankfurt, and Singapore. It anticipated: “Far greater global balance in the largest law firms as they seek to follow clients into developing markets and key megacities and global cities around the world. While some global firms already have more than 50% of their revenues and staff based outside the ‘home nation’, by 2030 this will become standard for nearly all major commercial firms.”

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15 Responses to “Report: artificial intelligence will cause “structural collapse” of law firms by 2030”

  1. Anyone can offer a legal option, even if they know nothing about the law. In this case, this “report” offers engineering estimates from people who clearly know nothing about computer science:
    “Its main proposition is that AI is already close in 2014.”

    Don’t hold your breath.

  2. Nelson Bridwell on December 1st, 2014 at 1:10 am
  3. 2030 is a very conservative estimate, given that some AI is already out there, e.g. roadtrafficrepresentation.com.

  4. Martin Langan on December 1st, 2014 at 7:47 am
  5. Now that AI and robotics has hit the mainstream press in the past year or two, particularly with reference to the driverless car, google glass and avatars which will all become ‘mainstream’ in the legal world 2015-2020, and the evolution of IBM Watson moving from cognitive computing to iterative, I actually predict that by 2030 it won’t just be the associates at risk, but the partners too.

    The differentiator will be ‘humanness’ at every level; this requires high EI and relationship / BD / rainmaking skills at every level.

    Smart lawyers will begin transiting toward hybrid tech & human lawyer NOW, because in all likelihood it won’t be 2030 when this ‘disaster’ occurs, more likely 2020-2025, IMHO (based on discussions with IBM and Google and interviewing scientists, technologists, AI experts and futurists).

    This is a welcome report as it documents the content from speeches that I and other futurists have been sharing these past four years with public and private audiences.

    Chrissie Lightfoot
    Author of best-seller ‘The Naked Lawyer’ and ‘Tomorrow’s Naked Lawyer: This Is Your Robotoic Life 2015-2045’

  6. Chrissie Lightfoot on December 1st, 2014 at 10:16 pm
  7. Back in the 60s some people in the AI field thought that human level intelligence and capabilities was only about a decade away. What we have no is not even at the cockroach level of intelligence. No one has been able to construct an AI that has a coherent understanding of the world at the level of a dog, let alone an educated person. Ask an AI the right questions and it soon becomes clear that there is nothing between the ears…
    Could legal services become more automated? Possibly. Would that be significant. Yes. But we are nowhere near an AI with human-level understanding of the world because we do not understand how we understand.

  8. Nelson Bridwell on December 4th, 2014 at 5:00 am
  9. There is a crucial factor missing here. There is no discussion about where the partners come from. If clients want high level partners, they have to realise they aren’t born at 20yrs PQE with litigation experience and human experience. That is developed and earned through years in Courts, Tribunals and having to deal with the ‘low level’ work.

  10. anon on December 5th, 2014 at 2:47 pm
  11. Organisations such as RAVN systems are working with some of the top law firms to use our AI technology. This technology can read, interpret and extract desired data from unstructured content. In our experience of working with these firms it has meant that low level data entry roles are now carried out by the robot and staff who used to do this can now focus on less arduous and more productive tasks. The firms also found staff had low morale when taking on data entry roles so the change in their day-to-day roles have been extremely positive. For more information on this technology see BBCs tech tent broadcast: http://www.ravn.co.uk/artificial-intelligence-in-the-law/

  12. Rebecca on August 13th, 2015 at 2:41 pm
  13. Software is helping with legal organization, research, electronic discovery, and finding strategic idiosyncrasies in various jurisdictions, but it will never completely replace attorneys. Legal problems are not just technical or logic problems. They involve a balance of very human emotions and conditions, and that cannot be easily programmed.

  14. Justin Waters on December 19th, 2015 at 12:38 am
  15. In the U.S. discovery model, AI is already critical in coping with the volume of unstructured electronically stored information. AI will permit analysis tied to external data of what has worked and where problems have arisen in similar matters. Efficiency has already increased 20 fold by digital tools, but the expectation of essentially flawless research has increased as well. Legal practice will evolve at a breathtaking pace.

  16. Richard Resetaritz on December 19th, 2015 at 3:41 pm
  17. It is just a fiction.

  18. Harpreet on December 21st, 2015 at 1:41 pm
  19. AI has been right around the corner for about 50 years now.

  20. Donald on December 21st, 2015 at 8:03 pm
  21. It will work until engineers program in ethics and morals…then everyone will know they’re fake.

  22. willis on December 21st, 2015 at 9:56 pm
  23. It will and must come faster than 2030. The archaic legal system is a disgracefully inefficient closed shop, full of restrictive medieval practices that denies justice and destroys families and small businesses. Most of it can be done with basic programming rules & email etc; only the complex cases need AI.

  24. David Thorp on December 21st, 2015 at 10:20 pm
  25. Most legal process work can be done out of Bangalore: that’s already happening and it’s a foretaste of automation.

    Those readers who asked where the partners of the future will come from would be well advised to consider that the associates of the present are the survivors of a long ‘dry’ period of low earnings, or none: there is so little added value in the work a junior can do – not that their work is worthless, but they’re competing against labour priced below the cost of sleeping in a squat and eating out of food banks – so that entry to the upper echelons of the professions is becoming the preserve of ‘trustafarians’ who can live through years of unpaid internships.

    This will, of course, raise a hollow laugh from English barristers.

    And the rise of the machines?

    Automation is already replacing the human touch in drafting certain types of legal document associated with isduing and trading structured financial instruments; yes, that is a very special case, but every year will show us a more complex type of contract, or another class of pro-forma legal filing being automated.

    Law will, at some level, always be a complicated task of codifying and resolving conflicts between human beings; it is a process of applying logic and rules to fundamentally irrational beings in an infinitely complicated universe. So the interface will always need a human being…

    …But the rule set is finite, even in its combinations and permutations, and the language is already formal: a well-defined vocabulary, rationally structured, and well-suited to machine analysis.

  26. Nile on December 21st, 2015 at 11:46 pm
  27. Ofcourse, there will be nothing to ” law” as the automation will remove so many jobs, that no one will be able to afford anything. lol Obviously, a profit based system, a usurious system, cannot work because it is by design a pyramid scheme. How can someone be a good lawyer if this was not understood? It is like Steve Jobs said upon his imminent death, that all the owning of things, and power, in the end they had no value, as the real value was to interact with others to enjoy what it meant to be a living, physical being. Hence, the solution is to do what is best for all, and the means within the present structures, is to create Living Income Guarantee to create a world where forgiving one’s self to the value being life, and realizing every action that is supportive and does no harm is the solution. Stop the mind consciousness as ego, and bring your within back down to earth. It will be so much fun!

  28. Rebecca Dalmas on December 22nd, 2015 at 11:31 pm
  29. Recently we witnessed a landmark in AI where AlphaGo (Google’s AI program) beat a world champion in Go. With significantly more permutations than Chess, Go cannot be won by using brute computing force, but rather the program has to develop an its own ‘intuition’ in order to narrow down the number of computational options regarding a next step.
    Although still at an early phase, this has significant ramifications for professional services where some mundane thinking tasks can be outsourced to an AI program.

  30. Tal Potishman on April 19th, 2016 at 10:40 pm

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