An Insider’s View on How AI Will Transform the Legal Sector

Matthew Whalley, Head of Legal Risk Consultancy, Berwin Leighton Paisner LLP

In May 2015, international law firm Berwin Leighton Paisner asked the UK’s first Contract Robot to review live documents for the first time. Two seconds later, it delivered its first batch of analysis. With one simple key press, technological potential became reality. We had just proved that Artificial Intelligence (“AI”) could be used to deliver legal analysis.

The potential impact of AI on the law has been discussed in many papers and conferences since IBM’s Watson made headlines in 2011. The announcement in October 2015 that IBM is setting up a 2000 strong Cognitive Business Solution group gives real credence to the commercial possibilities of AI for many industries.

AI will inevitably be widely used in the legal sector, due its foundations in analysis of unstructured data. But there are only a handful of AI based solutions available. And the quality of their output varies greatly. Early adopters are likely to have a lasting advantage, but the sector as a whole will benefit from increased focus to improve the way work is delivered, to the ultimate benefit of our clients.

AI is More Than a Clever Computer Routine

The term “AI” conjures up pictures from science fiction – a robot wheeling around reception to greet guests and giant machines able to beat the cleverest humans at quiz shows or chess. But at a practical level, when AI is applied to the law it has three attributes:

  1. it is designed for a specific purpose;
  2. it is embedded in computer code and accessed via a keyboard; and
  3. it is able to “learn on the job”, with the help of a human trainer.

The AI platform we use (provided by RAVN Systems), mimics a human being’s ability to process unstructured data. It will “read” through vast reams of documents, identify word patterns, and extract and reorganise the word patterns to form a meaningful report.

To do this, it needs to be fed a set of instructions on what to find, and another set of instructions on how to present its findings. It requires “training”, but once it delivers reliable results, it will do so forever.

This sounds a lot like a clever computer routine. But it is more than that. It re-writes its own code-routines in response to feedback from its trainer, and in doing so, learns in a way that is similar to a human being.

Expect to See a Dozen Law Firms Transformed by AI in the Next Five Years

The potential for AI to transform the legal services industry is hugely exciting. But we must accept that the technology, and our ability to use it to its potential, is in its infancy. At its best, AI will perform legal analytics in excess of ten million times faster than a human being. But those levels of performance are limited currently to specific tranches of work within a broader legal process. It will take time and commitment for firms to understand how to apply the technology to good effect.

Currently, there are few providers who can deliver reliable results. These providers will be stretched to the limit. This will cause a bottleneck that will take time to work through.

Because of these limitations, I expect that over the next five years maybe a dozen firms globally will embed AI into the DNA of their firm, and genuinely transform. The first dozen early-movers will continue to gain advantage past 2020, as new providers enter the market and other firms strive to catch-up on their early learning.

This is Good News for Legal Technology, Process Improvement Providers

The industry focus on efficiency will in the short-term be great news for traditional legal technology providers. Workflow, case management and document automation will all gain renewed momentum, as firms that can’t get to grips with AI seek to improve their productivity in other ways.

Process improvement, project management and business analytics providers will also benefit.

And as the profession streamlines, and generates more data around how legal work is delivered, for whom, and to what value, AI providers will reap the benefits. They will work with clients and technology providers to integrate their platforms into existing products, and work with clients to develop new areas where their technology can be applied.

Significant Long Term Change is Inevitable

The use of AI in the law is in its infancy, but the long-term effects are possibly easier to predict. There are three areas in particular where significant change is inevitable. These are job specialisations, education and training, and market structure.

Job specialisations. Work will polarise as robots become embedded in legal teams. Document based review will become operational in nature, and job specialisations will result that lean on legal document analysis, technical analysis, and error tracking and management. Traditional IT infrastructure and support roles will become incredibly important, as firms’ reliance on robots increases.

There will still be no substitute for legal expertise and client/market knowledge, but partners will need to think outside of specialist transactions and look at how to help business avoid some of the big legal risks that damage their business. And identify areas of work that weren’t previously cost-effective to deliver.

Education and training. Legal analysis will become encapsulated in code and contract forms will be standardised. Education will shift from principle to practical, and lawyers will exit university with broader knowledge of how the law is applied. This could reduce the length of a training seat to maybe 12 months.

Market structure. The early movers will be able to leverage AI to deliver huge volumes of work. They will use the new financial strength to buy-out less productive firms, and merge with firms that have significant expertise. This could be the moment for the Alternative Business Structure to step forward as a mainstream business model.

Our Clients and Our Employees have a Bright Future

Predictions of the future aside, we at BLP are incredibly lucky to be AI pioneers. We invested time early to learn how to apply the technology, and we’ve found that working with contract robots makes our employees happy. As our firm and others implement AI more widely, clients can look forward to ever more strategic insight, even faster commercial advice, and value that constantly exceeds their expectations.