Baker McKenzie to introduce AI-based due diligence technology as part of innovation drive

Marty: legal industry is not immune from impact of digitisation

Baker McKenzie, the world’s second biggest law firm, has announced plans to introduce due diligence software based on machine learning, a form of artificial intelligence (AI), as part of an innovation drive that looks to import ‘design thinking’ into how it delivers legal services.

Jason Marty, the firm’s global director of operations, told Legal Futures that the new technology was “adept at information location” and could improve lawyer output on due diligence by anything from 20% to 40%.

Mr Marty said although the software could carry out tasks such as finding and collecting clauses for review, it was “an efficiency thing” at this stage and human analysis and judgment were still required.

The move follows on from the deployment of Relativity as the firm’s global e-discovery platform.

Yesterday, Baker McKenzie unveiled a “global innovation program”, run by a newly formed innovation committee with members all over the world.

It said the work would extend well beyond introducing new technology or other solutions “and will start from and hinge around client challenges”.

Mr Marty, a member of the committee, said it was an “open question” whether Baker McKenzie would make external investments in tech companies as part of its innovation strategy. Dentons, another global law firm, has invested in legal tech start-ups through its subsidiary NextLaw Labs, while Mishcon de Reya recently announced an incubator too.

The announcement said a “task force” has already met with venture capitalists, start-ups, and industry players “and will be driving an investment strategy in emerging technology”.

Mr Marty said: “Digitisation is affecting most business sectors and the legal industry is not immune from this. There are new players, shifting dynamics and some of the marks of an industry facing disruption.

“Successful firms will be the ones that are proactive and adapt, rather than retrench and practice old models.”

Baker McKenzie is also putting ‘design thinking’ into action, using methods derived from product design “to re-shape all aspects of the firm’s client services and the business models necessary to support them”. The law firm is working with US consultants Peer Insight on this.

Mr Marty said the idea was to “work really closely with clients to ensure their challenges are met”, rather than asking which of the law firm’s existing services they might be interested in.

He said issues involving compliance, supply chain or fintech often did not fit into the standard areas of legal practice.

Mr Marty said he believed client expectations were “not that different” to what they always had been, in terms of wanting law firms to use the “best tools to provide the best service”, and although cost was a “significant consideration”, the drive to find ways of delivering services came as much from the need to provide value.

Erik Scheer, member of Baker McKenzie’s executive and innovation committees, said the law firm had been a pioneer at “disrupting traditional legal markets” and the legal sector was “ripe for change”.

He went on: “Being a good lawyer is no longer enough. These are uncertain times for our clients, in an increasingly complex world, in an industry facing disruption. We need to redesign how we deliver legal advice in a way that makes sense for our clients.”

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