Many people are still asking whether Legal Tech will completely replace the flesh and bones lawyer.  We don’t think so, and neither do most of the legal tech commentators we’ve come across in the last month.  Technology will sit alongside humans to provide better outcomes for clients, not replace humans.  As we note in our comments about Synergist below, we believe that over-reliance on technology may compromise effective outcomes when people still need to build relationships and work together.

What are the academics saying?

This article by Legal Futures provides an excellent round up of some recent activity in the legal tech space.  With a similar sentiment to our “shit just got real” blog, the article warns the reader that:  “If there are any lawyers out there who are starting to relax, believing that predictions of the demise of law as we have known it in the face of technological change have been exaggerated, they should think again as 2017 begins.” 

Looking beyond 2017, (but also providing a helpful summary of 2016), this article by Rebecca Lim predicts that the available share of total legal spend going to traditional law firm partnerships is expected to contract 40 per cent by 2021, due to the persisting growth of multidisciplinary practices of Big Four accounting firms, disruptive technologies and NewLaw models.  Demand for legal services is not going down, but if lawyers don’t step up, others will.

The Georgetown University / Thomson Reuter 2017 Report on the State of the Legal Market has provided some more ammunition for those predicting the death of the billable hour.  In commentating on this report, American Lawyer, The Global Legal Post and Legal Futures each highlight that those law firms who can respond to client demands for different pricing models will have a competitive advantage.  The Legal Futures article picked up on the report’s comments that many corporate clients will no longer pay for first or second year associates working on their matters, on the rationale that they are not sufficiently experienced or competent to make a meaningful contribution.  Knowing how most larger New Zealand law firms currently operate, if this becomes a common occurrence, this would really cause some serious headaches (or complete paralysis). 

What are the lawyers saying and doing?

On a more positive note for law firms, Magic Circle firm Freshfields is using technology to “create additional value for [their] clients, [their] partners, lawyers and the firm as a whole”.  The global head of innovation suggests that the innovation agenda of a firm’s clients will drive the innovation of the firm, which is consistent with our views in our legal sausage factory blog and ebook.  While it’s true that innovation may often end up being client-led, imagine how impressed a client would be if the law firm lead the charge? As this article notes, you need to fix the client’s problem, not your business problem.  The firms that do this well will be very successful and will win a greater share of work at the expense of those that try to preserve their existing business model as long as possible.   

The benefits of legal tech are not limited to the big firms.  This small US firm (six lawyers, two paralegals) is using legal AI research system ROSS Intelligence.  Some interesting takeaways include: (i) the fact that the productivity benefits of AI are as useful to a small firm as a large one, if not even more useful given their relative lack of staff; (ii) AI is not that expensive and is cheaper than a junior associate but is also a lot faster; (iii) AI fits into the new world of fixed fees, with clients expecting predictability and not to pay for process work.

What are the legal tech companies saying and doing?

Speaking of process work, Seyfarth Shaw and Blue Prism have partnered up to provide robotic process automation software, or “software robots” to the market.  These software robots are trained by humans to move information between computer programs or apps, such as Microsoft Excel or SAP.  The software robots will also be able to extract client data and analyse contracts and contract flows.  Tellingly, both partners to the joint venture stress that the goal is to automate repetitive tasks (like data entry) to allow employees to spend more time on higher value work. 

In the document automation space, LISA (Legal Intelligence Support Assistant) (for preparing non-disclosure agreements) and Farewell (for preparing wills) have been making headlines.  Farewell comes hot on the heels of LegalZoom’s recent launch of Legacy at the end of last year.  To see how LawHawk’s automated will and confidentiality agreement stack up against these international heavy hitters, visit our website and give them a try.

Ravel Law is using technology to take a deeper dive into analysing case law, judges’ behaviour and variation between courts.  Together, this increases the likelihood of certain legal arguments being successful in certain courts and before certain judges, relative to the type of case.  However, the CEO and co-founder stops short of thinking that it will be able to outright predict the results of a case before it has even started.  He notes that “law is not all about art, or all about science, it’s both”.  It’s “perhaps about law catching up with science and technology, rather than law being replaced with technology”.

This article by Sound Business Systems looks at the “resurgence of interest” in speech recognition tools.  Recent experience has shown me that this is not limited to digital natives or big firms.  I was at a four year old’s birthday party a few weeks ago and the boy’s grandfather (previously a partner at a leading New Zealand law firm for 20 years, now a commercial barrister on his own) spoke to me about how speech recognition software allows him to do what he used to be able to do, but without human secretarial support. 

Of all the technological innovations we’ve come across in the last month, perhaps the one that poses the most questions for us is Synergist.  This is a super clever program designed to speed up the process of contract negotiation, by having a pre-defined set of rules and optional clauses for both parties to choose from (and negotiate in relation to), with everything else in the contract appearing to be non-negotiable.  To some this might seem like the holy grail of contract negotiation as it takes some of the uncertainty (and potential aggravation) out of the process.  I certainly like what I saw of the Synergist’s analytics tool.  However, in my view (and after having run through a demo negotiation using the tool), I have reservations, particularly for negotiations where an ongoing relationship is important.  For example, from a practical perspective, who gets to choose which clauses are negotiable and which aren’t?  Who gets to set the options for each negotiable clause?  If it’s both parties, then wouldn’t that require time to negotiate?  If it’s one party, then isn’t that taking away the mutuality and fairness of the process (as that party might present four options for one clause, each of them not being acceptable to the other party)?  At a human level, if you provide someone with four options, would they always choose the option that is most favourable to them, at least to start with, and would this then prolong a negotiation beyond what it otherwise would have been?  And what of the relationship the parties should be building?  The contract is just words.  What matters is how the parties will work together and deal with the uncertainties the real business world presents.  In our view, people should think of negotiations as part of learning to work together and building the relationship they need for successful outcomes, not something that should be left to lawyers, or now a computer.  While it’s fair to say we’re excited to see to innovation in all forms, we do question those tools that might appear to either take too much of the human element out of the process (where the human element is critical) or aren’t consistent with the realities of human nature and human relationships.

What are the law societies saying and doing?

As usual, there is a lot coming from the UK. The Law Society of England and Wales has issued a report titled “Capturing Technological Innovation in Legal Services”.  It’s interesting to see which parts of the report has been picked up in articles. 

The Brief (true to its name) briefly discusses the report, highlighting the sentiment that lawyers are being swamped with technical innovations that purport to improve their practices, yet the market remains “highly fragmented” and difficult to understand.  The short article ends with the comment that interviewees were adamant that legal services should not lose the human touch. 

Legal Futures also picked up on the widespread support for technology as an enabler not an alternative to human lawyers.  We completely agree with approach that, as a starting point, firms should focus on clients rather than cutting-edge IT.  “[T]he better approach often comes from a close tracking of client needs and expectations, followed by identification of how technology can help a firm better serve these needs.”

Artificial Lawyer outlines the Law Society’s intention to play an active part in the legal tech sector.  The report outlines seven areas where it thinks it may be able to help its members with legal tech adoption.  They range from diagnostics (to help firms understand their own innovation capacity, their technology needs and an industry-wide innovation benchmarking to enable firms to position themselves against wider innovation activity) to collaboration (working with tech companies and start-ups to bring new ideas to fruition that carry an accurate understanding of lawyer needs, the legal context and bring immediately practicable applications). 

What else has happened?

The massive New York Legaltech event this year took place between January 31 and February 2.  You can see Andrew King’s brief summary here.  It was interesting to see that one of the key takeaways from Bloomberg Law’s Big Law Business was that Big Law is falling behind.  In-house legal departments are increasingly looking to technology to help them inexpensively take care of legal work they once had to outsource for higher fees.  An article from Law.com covering day three of the event rather ominously ends with a quote from Natalie Pierce, co-chair of Littler Mendelson’s robotics, AI and automation industry group:  “To not use technology available, that’s how lawyers and all other occupations are going to be left behind”. 

Let’s not be the skull looking back at the robot!

If you would like any help discussing your organisation’s innovation plan or strategy for 2017, please get in touch.  There’s so much opportunity out there for technology to enhance your organisation!