AI Revolution Transforming The Legal Industry
Will the Artificial Intelligence (AI) revolution transform the legal industry in the coming decade? Do you think, AI is changing the legal profession? – These questions are doing the rounds for almost all law firms these days. Probably six years ago when century-old law firm Dewey &LeBoeuf filed for bankruptcy, many wouldn’t have linked it with the changing current.
But, today, things are clear – many legal houses have changed their business model from the high hourly-billing engagement to a value-based consulting model backed by artificial intelligence and machine learning. And to your surprise, Altman Weil’s survey has revealed that a whopping 55% of the US-based firms with more than 1000 lawyers have already started using legal AI. This is not just passing news but an indication of the changing face of the legal industry.
AI In The Legal Industry – How Strong Is The Correlation?
The legal services sector is going through an era of transformation. For years, research through law books, case documentation, drafting motions or contracts, etc. has been the bread and butter earner for lawyers. But, with shrinking trans-national boundaries, growing consumer trends, and the emergence of cloud and advanced hardware capabilities, many of these tedious tasks are now taken over by AI.
In 2014, professor Daniel Martin Katz had created an algorithm to provide outcomes of the legal cases in the US Supreme Court. He and his colleagues at the Michigan State University law school had predicted 70% accurate results for 7,700 cases. The age-old paperwork and data management practices of lawyers such as checking through thousands of lease documents at the land registry and many such repetitive legal tasks have been taken over by AI-based software solutions.
As the legal industry is driven by knowledge and information requiring standardization, segmentation, and summarization, it’s an ideal ground for AI and machine learning. Moreover, the vast amount of unstructured data produced by the legal firms needs an automated process for regular storing and referencing, which would be seamless through AI-driven systems.
Change In The Traditional Business Model Of The Legal Industry
When we discuss the engagement model of a law firm, the core offerings come in the form of handling a client’s legal requirements end-to-end. The critical service points include experienced attorneys, a dedicated team of lawyers, and access to various legal channels that are often unreachable for a business owner. All this at the cost of dollars or pounds per hour and sometimes even by six-minutes units especially by BigLaw firms.
The AI Effect – Shift From Time-Based To Value-Based Model
There are many areas such as taxation, contract drafting, the creation of policy disclaimers, documentation of legal clauses, etc. where the presence of a lawyer is not necessary. Instead, these tasks require extensive legal research and advice that should be rich in information and procedure. With AI/ML system implementation, these tasks not only take fewer lawyer hours but would complement the legal cells in better focusing on the actual judgmental part of cases.
Some Of The Tasks That Can Soon Be Driven By AI
AI Revolution Driving Value-Based Business Model
Automation and the AI revolution has started with the most commoditized tasks of the legal profession. Claims settlement and legal advice on fighting parking tickets are to name a few. The work of the DoNotPlay chatbot, popularly known as the world’s first robot lawyer is not new anymore. DoNotPay has provided legal advice in more than 160,000 parking tickets cases in New York and London, helping people in fighting the cases all by themselves.
The AI revolution has come up with the idea of a value-based model for the legal industry. Because, in a legal case, the value that clients pay for is the strategy to win the trial and not for hours spent in the process. Also, apart from the cost factor, from the accuracy, and time standpoint, clients have started asking for an engagement model that is more transparent as well as measurable.
Will AI Replace Lawyers In The Coming Years?
It is true that in the coming future, legal professionals won’t be doing the same thing if at all the same, not in the same way. Though AI is all set to disrupt the current system of the legal profession, still there will be areas where the human element will be definitely needed.
So, till the time, skill and empathy both would be necessary to become a trusted legal advisor, lawyers will be an integral part of the system. The way, AI-driven systems have evolved, the legal process will also take its next leap, and both AI and the human element would only complement each other in the coming days.
The AI Summit – London
The coming AI summit of the year is going to be held in London from June 12-14. The event will start on 12th June at the Kensington Palace followed by London Tech Week at ExCel Exhibition Center. With 400+ speakers and 10,000+ attendees, the event will put light on many AI initiatives and solutions that the legal industry could be benefitted from including Microsoft AI and IBM Watson.
Next-Gen Legal Profession – An Adaption Of Legal AI
Early 2018 has seen dozens of law firms calling it quits either through acquisitions or complete dissolutions. San Francisco-based 85-year old law firm Sedgwick, 22-Attorney in New York, and King & Wood Mallesons in the UK are to name a few. The millennial law firms have to be forward-thinking to sustain the ML/AI effect on the legal industry. The changes will be diverse and significant for sure, but the new business models will add more value to the legal profession as well as to the clients seeking the services.
In this context, Roger Meltzer has rightly said, – “In order to succeed, the legal industry needs to get off the dime and embrace diversity.”