One way of viewing the current legal services market is that the legal profession is locked in a race to the death with non-qualified providers, tempted by the lucrative chunk of legal work that is not reserved to qualified lawyers and which forms a big part of their income.
Legal technology (legal tech or ‘lawtech’) is playing a huge part in this battle. It is the enabler of the new providers to compete on equal or more favourable terms than the law firms which have been doing the work since the year dot. It is also helping lawyers provide reserved activities and black letter law better, more efficiently and cheaper, to service clients’ insatiable appetite for ‘more for less’.
Legal tech has certainly excited the imagination of lawyers and non-lawyers alike as to its possibilities, with a “tipping point” being forecast as on the horizon for the legal sector. The prospect of doing the same things cheaper is attractive both to the would-be competitors of lawyers and government ministers looking for areas to save public money.
The Legal Tech Debate
‘Old school’ lawyers point out – with some justification – that legal problems affecting vulnerable and poorer clients are just as pressing as they always were. Face-to-face consultations with an expert used to navigating bureaucracy are still the most effective way of levelling the playing field in a world in which the odds are heavily stacked against the disempowered, they argue.
A section of the profession – just how big is open to debate – is alive to the challenge. Far-sighted law firms have sought to steer, invest in or advise lawtech start-ups that they think will succeed in the new environment.
Even the Law Society, no doubt keenly aware that the regulatory direction of travel is to foster competition and do away with uncompetitive practices, has partnered with an incubator to make it easier for law firms to support these legal tech disruptive providers and hopefully benefit as they achieve traction in the market.
Apprehension about a coming wave of technology-led transformation in legal services has led to calls for The Law Society to provide an electronic platform for legal services to help smaller firms, along the lines of the French Bar’s Jamais sans mon avocat (Never without my lawyer). The failure to deliver successful society-driven profession-wide tech solutions in the past makes this eventuality improbable.
But it seems likely that at least some of the existing market – within it traditional law firm partnerships – will not share if the technological future comes to pass; firms that currently do well and have good relationships with local businesses often do not see a pressing need to engage in the tech-led future.
Some partners clearly hope they can bow out of legal services before having to come to grips with a technological future and younger partners or associates may not have the clout now to follow their instincts.
What’s on the Horizon for Legal Tech?
Young lawyers are likely to be tech-savvy when they arrive in the law by virtue of their familiarity with consumer technology. It also seems probable that increasingly the training of lawyers will have a lawtech component, and law firms will insist on general legal tech competence.
At least one collaboration between law firms and a university has as an aim to “produce future graduates with the skills to utilise the legal technology and platforms within the sector”.
Already there are signs of what the future holds – and in some areas of law particularly susceptible to automation, legal tech is already the only way to compete on price and quality.
So embedded has technology become that calls are being made for the adoption of ‘cyber ethics’ to monitor the very different impacts that the growing use of technology is having on the practice of law. Issues raised include the individual responsibility of a user who depends on an algorithm that incorporates a false statement, made automatically on their behalf.
The big promise is that artificial intelligence (AI) will assist lawyers to practice, if only they can remain its master and not find themselves summarily replaced. For now, legal technology such as machine learning and predictive coding have taken root, particularly in digesting huge amounts of information, such as contract review for electronic disclosure.
Most major City law firms have adopted AI software to a greater or lesser degree and many with a big impact on their daily practices. Equally, without exception large commercial firms have set up teams to exploit the opportunities that technology law presents. For example, Clifford Chance’s Tech Group has over 400 lawyers globally. Allen & Overy’s Fuse ‘tech innovation space’ services global tech companies.
As well as document review, a likely candidate for technological innovation is conveyancing, where clients can relatively easily be given enhanced access to the process, in particular real-time information about the progress of their transaction.
Legal Technology in the Courts
Even senior judges are anticipating that eventually they will have to depend on the help of legal AI technologies to crunch data to support their decisions, or otherwise lose credibility with the parties they are judging.
Also in the courts, video is set to be used much more frequently to save money on physical hearings and avoid parties and witnesses travelling to a diminishing number of court centres. But concerns have also been raised about the problems of this technology, including the biases that it apparently entrenches in the minds of juries and sentencers, compared to live testimony.
The use of technology to help predict which way judges will rule on a case is being developed but the consensus seems to be that lawyers will still play a significant role in litigation, perhaps supported by this predictive technology, for some time to come. Whether this is unreasonably hopeful remains to be seen.
Equally, the role of humans in making delicate judgements, such as judicial rulings – also known as ‘non-automated dispute resolution’ – has been talked up as essential to keep humanity in the process. This also may be overly hopeful in the long term, given the high cost of human judges, especially in low-value cases.
Blockchain in the Legal Sector
The other big technological unknown is how far the security inherent in blockchain technology will eat into lawyers’ traditional sources of income. At the moment consortia of big law firms are exploring common standards for blockchain-backed smart contracts which ‘self-activate’ when verifiable milestones are reached.
But if blockchain and similar distributed ledger technologies – in which identical copies of the ledger are maintained on multiple computer systems – are really as versatile and secure as we are led to believe, they could be used to ‘cut out the middle man’ – in this case the lawyer in a variety of legal scenarios.
Academic futurologists have mused that blockchain could even be the basis for law firms to operate as “distributed entities” in which the current centralised command structure of law firms would be made redundant .
Already legal technology is being used to simplify conveyancing. HM Land Registry is trialling the use of blockchain and has already made slow but steady progress with digitising the local land charges register.
Another example of the security blockchain provides is the way it is being used to safeguard digital trial bundles and prevent them being altered after entering the system.
Robot Lawyers and Legal Chatbots
Where once it was enough for law firms to have an attractive website to compete for online interest, a new generation of tech-savvy customers – an ever-growing army of ‘digital-born natives’ – want a lot more. They increasingly expect to interact with their lawyer 24/7, be serviced immediately, and – used to switching utilities to avoid ending up on ‘legacy’ pricing schemes – are not averse to moving to a provider who can satisfy them if their needs are not met.
Existing technologies can help lawyers keep ahead of this newly-demanding client. Chatbots can help deliver quick answers to their enquiries, and hopefully stall them long enough to set up a face-to-face meeting where personal relationships can be established and loyalty built.
The potential for chatbots to bridge the gap between online consumers wary of lawyers and law firms may be much greater than just the offer of ‘human’ help you often see at the bottom of webpages. Joshua Browder, the young founder of the ground-breaking DoNotPay chatbot – created to help people challenge parking tickets – told the Legal Futures Innovation Conference in 2017 that up to 70% of the law could be carried out by robots and all legal documents will be automated within a decade.
In October 2018 he helped advance this view as a reality by launching – initially in the US – his chatbot as an app with 15 different services, including bringing a small claim and even, in the words of its creator, generating “an entire strategy for when the defendant tries to challenge you”.
Legal Tech for Operational Efficiency
Software developers focused on the smooth running of law firms have been busy in recent years. There is a bewildering range of applications aimed at improving case management, marketing and similar law firm internal operations and services.
With the right software, the data that law firms collect and process about their clients and their legal matters can be ‘mined’, subject to complying with data protection laws. Other data about the firm’s functioning can be used too. There are signs that law firms are already exploiting this information to better serve their clients and stay ahead of the competition.
Will Writing and Legal Technology
One area considered to be ‘low-hanging fruit’ for law firm competitors keen to use technology to take a slice of the pie traditionally enjoyed by solicitors and other law professionals is will writing – a field so temptingly susceptible to automation that a pioneering technologist lawyer tried to come up with an appropriate algorithm all of 20 years ago.
Some businesses see wills as the ideal loss leader for law firms to offer as an inducement to potential paying clients.
Alternatively, wills are an obvious fit for a business specialising in probate and funeral services.
One business that sees digital wills as a huge untapped market and offers online wills that are examined for accuracy by a solicitor-led team, is Farewill. The company claims it has established itself as a runaway market leader, with the help of external capital investment.
Legal Tech Early Adopters
Backing lawtech start-ups with money, expertise or other support is a key way law firms have sought to position themselves in relation to technological innovation. Behind the thinking is a realisation that today’s start-up is potentially tomorrow’s global mega-business and joining it at the ground floor makes good commercial sense.
London-based firm Mishcon de Reya was quick off the mark and its MDR LAB technology incubator has completed the second year, with 11 start-ups in total having successfully passed through a beauty parade process.
Companies qualifying for Mishcon’s advice and mentorship include:
Thirdfort is a UK-based web-hosted software platform facilitating exchange of money in property transactions.
DealWIP isa US legal workspace platform for transactional lawyers, LitGate is an Israeli AI-backed ‘arguments analysis solution for dispute resolution’, which seeks, in MDR LAB’s words “to revolutionise the conduct of litigation by delivering contentious legal services faster, at less cost and with improved accuracy”.
Last year’s MDR LAB cohort included Ping, a US company founded in 2016, which automates timekeeping for lawyers and provides data analysis for law firms. Mishcon also mentored German start-up synergist.io, which aims to “provide a secure cloud service to automate the negotiation of contract terms, allowing customers to draft, negotiate and sign contracts without redlines or email”.
Other innovative start-ups supported by the firm include Orbital Witness, which uses satellite imagery to give conveyancers historical images of a site. Also, former US litigators founded Everchron, which produces collaborative litigation management software. Indian company Surukam uses AI to automate contract management, while Belfast-based SaltDNA aims to provide absolute privacy in mobile communications.
Law firm DLA Piper, also with a keen eye on emerging tech disruptors, has created what it calls the NEST, to provide fast-growing companies with access to legal services, while its Accelerate online platform seeks to give entrepreneurs business materials. Since 2008 the firm has sponsored a global technology summit – a two-day event focusing on emerging technology trends.
Encouraging tech innovation within large firms has spawned a modern twist on an older industry technique for rewarding bright ideas – which Japanese auto manufacturers were building into dialogue between management and employees decades ago. Global law firm Eversheds Sutherland, which has 66 offices in 32 countries, has rolled out IdeaDrop, a crowdsourcing web and mobile app to capture good ideas among its staff.
Legal Technology – Just the Beginning?
The explosion of tech-based innovation within the legal sector, internally and in services to clients, is only likely to accelerate as non-lawyers snap at law firms’ heels. So varied are the developments already taking place that only a glimpse of what is happening at any one time is possible.
Perhaps the last word should go to Noah Waisberg, chief executive and co-founder of Kira Systems, an AI-driven contract analytics company and market leader in machine learning contract search. Mr Waisberg, a former corporate lawyer at US firm Weil, Gotshal & Manges, said:
“Lawyers and alternative legal service providers, as well as corporates working directly, do the work they were already doing, but better.
“I believe the future will be about harnessing technology – as well as appropriate people and process – to solve new legal problems, problems which look now essentially unsolvable.
“I’m unsure who the winners will be here, but I think this work won’t be possible without aggressively embracing efficiency.”
Read the latest news stories on legal tech, AI, and block chain here: https://www.legalfutures.co.uk/practice-points/technology