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Ask the Expert: Impact of AI on law firms

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Ask the Expert: What will be the impact of AI on law firms and their clients in the next ten years?

Welcome to The Legal Technologist’s first ‘Ask the Expert’ feature.  Our readers ask us their burning Legal Tech questions, and we hunt down answers from experts in the field.

Our first question is about Artificial Intelligence (AI) and how it will affect law firms and their clients over the next decade.  I’m Becky Baker, the Junior Editor, and I’ve asked some of the key players in the AI world to give us their thoughts on this question.

Defining AI

The term can encompass a wide range of technologies, including machine learning, natural language processing, and image recognition.  They’re united by the concept that AI technology can perform ‘human’ tasks such as making decisions, recognising data patterns, and perceiving images.

In the legal world, a range of applications of AI technology have already taken root.  Many law firms are using AI capability to streamline their internal document and knowledge management systems, while technology-assisted review (TAR) is fast becoming a reality for corporate lawyers and litigators alike.

Experts from Luminance, Juro, and iManage will discuss how AI may impact:

  • The nature of legal work;
  • Junior lawyers and their training; and
  • The future of the legal market.

Our experts

Emily Foges, CEO, Luminance

Emily is CEO of Luminance, the leading artificial intelligence platform for the legal profession. She became CEO in 2016 when the company was a small team of technologists and lawyers. She took the product to market and led the growth of the business which is now used by over 150 law firms and organisations across 40 countries and six continents worldwide. Emily has more than 20 years’ experience of growing and scaling technology-led businesses. In 2018, Emily was named ‘Woman of the Year’ at the ‘Women in IT Excellence Awards’. 

Richard Mabey, CEO, Juro

Richard co-founded Juro in 2016. Previously he was a corporate and M&A lawyer at Freshfields Bruckhaus Deringer, and worked in product at US legal technology company LegalZoom. Juro’s AI-enabled contract management software helps businesses in 42 countries to manage contracts collaboratively.

Dan Marcus, Legal Practice Lead, iManage

Dan advises in-house legal teams and business units how they can best apply AI technology in their business, focusing on iManage RAVN software.  iManage RAVN uses AI, machine learning and other technologies to help businesses unlock knowledge from documents, find new efficiencies and better serve their customers.

The nature of legal work

Emily Foges, CEO of Luminance, states that ‘the biggest impact we are seeing [of AI] is a change in the nature of lawyers’ work’.  Juro CEO Richard Mabey strongly agrees. He thinks the day-to-day work of lawyers could change dramatically thanks to AI automation, bringing a range of benefits for law firms and in-house legal teams:

AI technology can reduce the burden of process work on lawyers in private practice and in-house, automating the ‘cookie-cutter’ kind of work that lawyers currently have to do. This could have a number of knock-on effects on law firms. These could include adding more value to client matters, better relationships between lawyer and client and between the legal function and the wider business in-house, and better employee engagement.

Richard Mabey, CEO, Juro

Mabey also makes a surprising prediction for the lawyers of the future:

In ten years’ time, I wonder if we’ll use Microsoft Word at all for contracts. It’s an inherently uncollaborative program, with excess capability that’s rarely used – the opposite of a frictionless program that adds value where it’s needed.

Richard Mabey, CEO, Juro

Law firms need tools that enable their lawyers to be effective and add value to client matters as efficiently as possible.  Dan Marcus, Legal Practice Lead at iManage, also predicts that the effective implementation of AI technology will result in a seamless working experience for lawyers:

AI will be embedded seamlessly in our workflow; not screaming for attention but prompting us with tips and pointers where and when we need it. You will no longer leave the program you’re working in to find out the market standard for a clause you’re drafting, what the other options are and when and why these variations were used.

Dan Marcus, Legal Practice Lead, iManage

AI can enable more effective working by removing friction points and integrating sources in workflows, in contrast to the disjointed way that lawyers are often forced to work, gathering research and precedents from an array of formal and informal sources.

Impact on junior lawyers

Arguably it’s paralegals, trainees and junior lawyers who initially stand to benefit most from AI automation because the burden of process-work falls squarely on them.  Lightening the load of document-review could have a huge impact on their career satisfaction and progression, as Foges points out:

Junior lawyers normally burdened with endless mind-numbing due diligence can instead spend their time on more analytical and creative tasks, and we see this shift having a positive impact on lawyers’ career progression.

Emily Foges, CEO, Luminance

In Mabey’s experience, some lawyers are concerned about the removal of process-work at the junior end of the profession.  They question how we can effectively train lawyers without the learning experiences they’ll gain from proof-reading and document review.  According to Mabey, however:

This is a red herring. Junior lawyers don’t need proof-reading and document review to learn attention to detail, perseverance or resilience.  Training providers should be confident that junior lawyers can still learn the skills they need, even without so much process work to fill their days.

Richard Mabey, CEO, Juro

The future of the legal market: How can law firms stay competitive?

It’s common sense that the best law firms combine rock-solid legal advice with superior client service.  AI technology can support both these pillars of the legal services industry, and Mabey argues that the law firms of choice will be supported by a third: top-quality technology:

The ‘winning’ providers of legal services in the next ten years will be those who provide a blend of best-in-class technology and the best personal, human-centred service.

Richard Mabey, CEO, Juro

AI technology can improve business relationships by reducing ‘friction points’ throughout the engagement.  This is particularly relevant for the legal industry:

Legal  service providers can sometimes be perceived as ‘blockers’ rather than ‘enablers’; after all, part of the purpose of the legal industry is to identify potential problems and risks.  Naturally, this can create friction between lawyer and client if the client’s expectations aren’t being met. The most competitive legal services providers will remove these friction points as far as possible using a successful blend of technology and better service levels.

Richard Mabey, CEO, Juro

AI technology, whether it’s used for internal document management or in client-facing tools, can streamline the client’s experience and improve overall client care.

However, the analogy (and the industry) would collapse without considering the ‘pillar’ of legal advice itself.  Having explored the key contributions AI is already making to the delivery of legal advice, including increased accuracy and efficiency, it is clear that automation will alter client expectations as to speed of delivery and costs.  As Mabey points out, ‘clients will simply refuse to pay for process-work’ such as document review once it’s been automated. Although this might not sound like good news for law firms, it may benefit everyone in the end:

It’s a win-win situation for client and lawyer; the client gets more for their money, and the lawyer gets to focus on more innovative work.

Richard Mabey, CEO, Juro

Using AI for due diligence and document review work may also increase trust in the legal profession by reducing the capacity for human error.  This is an important point for Foges:

Clients are increasingly demanding firms adopt AI as a way to give back control to the lawyers, giving them unparalleled insight into document sets and allowing clients to enter into deals with their eyes wide open. It gives lawyers the ability to review all of the documents in a transaction, not a subset, flagging all anomalies in an instant and reducing risk further down the line in the process.

Emily Foges, CEO, Luminance

Clients will be reassured their lawyer’s legal advice is based on the full picture, not merely a snapshot, of the information available.

Reduced friction and increased trust, combined with more effective service-delivery, sounds like a powerful cocktail of ingredients for thriving client relationships.  Increased adoption of AI technology may also open up the market to smaller firms who have the foresight to invest early and the agility to adapt quickly to changing client expectations:

The adoption of AI levels the playing field for firms and clients alike, opening up the market to smaller firms with fewer people, as they will be able to bid for larger projects. So, to remain competitive in a crowded market, law firms and in-house counsel need to continue to view AI as an exciting enabler, rather than simply a box-ticking exercise. Accountancy is a case in point; today, the idea of a good accountant without Excel is unthinkable and in time, a lawyer without an AI platform will seem just as absurd. 

Emily Foges, CEO, Luminance

The good news for law firms who have already jumped on the AI bandwagon is that further investment in these AI ‘enablers’ is only going to get easier, and the benefits will not be limited to larger businesses:

AI has already crossed a tipping point where the efficiency gains pay for the upfront investment. In the next ten years the scale will continue to tip: AI will drive further efficiency gains and require less investment in both time and money.  While larger firms will have structural advantages in implementing AI, these can be overcome by smaller firms who move fast with an effective AI strategy over the next few years. We have already seen ambitious smaller firms take these steps, so I highly doubt that the spread of machine learning in the legal profession over the next decade will be limited to the large city firms.

Dan Marcus, Legal Practice Lead, iManage

As the technology develops and is more widely adopted, AI-enabled contract management and due diligence could easily become industry standard across law firms and businesses of all sizes. Mabey agrees that AI can be a worthwhile investment for smaller organisations:

We see increasing demand from small legal teams at mid-market organisations (not just large enterprises with 50+ people legal teams). For these teams, there’s obviously a cost/benefit analysis to be done but, more and more, legal tech tools offer scalable pricing models that can deliver real ROI regardless of the size of the business. This is good news for small legal teams, who are often overloaded with process work.

Richard Mabey, CEO, Juro

Our experts all agree that AI is going to be an integral part of daily life in the legal profession in ten years’ time. We’d love to know your thoughts about the opinions, ideas and predictions in this article. Do you agree with our experts?  Have you had experience of working with AI technology in the legal profession? Comment below or tweet us @LTechnologist to join the discussion!

And as always, if you have a Legal Tech question that you’d like us to find answers to, please visit our Ask the Expert page and we’ll look into it for our next edition.  For Legal Tech careers questions you can now consult Henry Venmore-Rowland, our very own Agony Uncle, on our Careers page.

Becky Baker

Junior Editor
The Legal Technologist

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