Technology has a place in every industry, and today, ‘every company is a technology company’. In the first of this three part series on AI in legal industry, we looked at what the stage of AI adoption in law, and how it is – if at all – creating a more strategic role for associates in law firms.

The article established – with the help of Geoffrey Vance, the chair of Perkins Coie’s E-Discovery Services and Strategy Practice, and Alvin Lindsay, partner at Hogan Lovells – that AI adoption was at a fairly early stage, although its use is not a new phenomenon. It also became clear that, as suggested by a report from ALM Intelligence, that AI will be crucial in helping law firms overcome challenges and survive moving forward.

The second part of this series will look at AI’s broader role within the legal industry, with specific case studies from Perkins Coie and Hogan Lovells.

But before we delve into it, it’s important to understand the reality of integrating AI into a law practice – the presence of a CTO is a crucial.

>Read more on Artificial intelligence in the legal industry: The future – Part 3

The CTO’s role

As mentioned, law firms – like other businesses – are beginning to implement technology, in order to solve business challenges and pain points. The integration of new and emerging technologies will be needed to address a continually growing list of functional challenges, while improving efficiency and remaining competitive.

Scott J. Jackson, Esq. writes that such challenges include: ‘How do I automate data entry to lower overhead? How can I access my case data wherever I am? How can I handle client status inquiries in a less labor-intensive way? How do I stake my claim in the ongoing “land rush” of internet marketing, to ensure my firm remains relevant and visible in search and social channels going forward?’

>Read more on the 4 different types of chief technology officer

How can law firms respond to these? Well, first they need to hire a CTO – but a specific type of CTO. According to Jackson, law firms face technology demands in ‘two completely different arenas: practice management and the web’.

https://www.youtube.com/watch?v=ArrG0uORJwE

So, any successful CTO in the legal industry, will need to have a methodic, planning persona (as opposed to a focus on maintenance, for example). This type of CTO will focus on using tech – like AI – to drive business growth and the related financials.

‘Law firms using a legal CTO,’ writes Jackson, ‘end up having their technology spend pointed in the “same direction”, resulting in significantly better business outcomes than the patchwork vendor approach’.

Of all the technologies available, AI is predicted to have the biggest impact on the future of the legal industry.

AI in the legal industry

Over the past ten years, ‘AI in the legal industry’ has been used by litigators in order to maximise efficiency in the discovery process or research. Now, “AI is starting to be used by attorneys in non-litigation groups in areas such as real estate and corporate transactions,” explains Vance.

“Indeed, many of the same tools that have made the discovery process cheaper and less risky can have the same effect on any other projects that require the review and analysis of client data, most of which is kept in electronic form.”

>Read more on AI taking over the legal profession

“The next step, in my mind, is for law firms to harness the value of AI for their own business purposes. Law firms are businesses, often ones with revenue in the hundreds of millions of dollars and massive amounts of data kept for decades. All of that data, when mined and evaluated with the help of AI, can teach law firms endless numbers of lessons, including how to (1) improve customer service, (2) attract and keep more clients, (3) reduce risk, and (4) make the law firm business more nimble and profitable.”

This idea of harnessing the power of data is echoed by Alvin Lindsay, and is, indeed, one of the fundamental benefits of adopting AI in the legal industry from a business perspective.

AI is capable of using large repositories of data (“big data”) to find connections and correlations, and to make predictions. This, explains Lindsay, “is in many ways what lawyers have been doing for time immemorial”.

“The state and federal decisional case law that make up the so-called “common law,” for example, is a big-data repository that lawyers have been “mining” for years in order to advise clients and courts what the right answer should be.”

>Read more on big data in the legal community

“Transactional lawyers have, even before the computer age, relied upon their personal databases of “form” contracts and clauses that they analyse and adapt for the “next” deal. So as AI is able to handle more and more of that type of work autonomously, lawyers of the future are going to have to become more innovative in finding new ways to use all that data to provide clients better insights in an efficient way.”

https://www.youtube.com/watch?v=nTtARqS67Pw&t=6s

‘Debunking the AI myth’

As with adopting any technology into operations, the business case has to be made that the use of said technology – in this case, AI – will help reduce cost, while improving efficiency and quality.

Historically, explains Vance, there has been a myth surrounding the cost of AI and the idea that it could not be trusted to replace the attorney and make decisions.

>Read more on the misconceptions of artificial intelligence

“Over time [at Perkins Coie], we’ve been able to debunk these myths and demonstrate that the costs of AI are overwhelmed by the benefits to our case teams and clients,” says Vance. “Lawyers make better decisions when assisted by AI. It’s that simple. And now that we can prove it rather than just say it, we have the luxury of being able to use AI in almost every case on which our internal e-discovery group works. It’s baked into our workflow so that we and our users, including partners, associates and most importantly our law firm clients, can realise the AI benefits in nearly everything we do.”

This experience of success is mirrored at Hogan Lovells, and Lindsay explains how he was able to demonstrate to one client that the use of the law firm’s computer-assisted review saved it over $1,000,000 in one particular cross-border project.

Similarly, Hogan Lovell’s construction practice has an early case-evaluation product that provides deep insights to clients about the costs and likelihoods of success for new matters given their particulars. And the firm’s transactional lawyers use contract assembly programs that are becoming more and more driven by AI algorithms. The technology’s adoption is growing in legal industry, as more successful use cases emerge.

The threat to jobs

“We are actively focused on disruptive market forces like AI and are trying to take advantage in order to provide the best and most cost-effective client service possible, while not seeding our profession to robots,” says Lindsay.

>Read more on the world Bank chief’s warning over automation and job loss

The threats posed (or not posed) by AI to potential job loss have been well documented, and Lindsay believes that this will be no different in the legal industry. “I think the challenges we face as a profession is that the work traditionally done by young lawyers will be largely supplanted by machines, thus providing fewer opportunities for lawyers to grow to the point where they can provide the judgment and wisdom of experienced lawyers. That is an area I hope will take a long, long time for computers to replicate.”

Part 3 of Information Age’s Artificial Intelligence in the Legal Industry series will focus on how law firms can best adopt AI, and the importance of doing so in the face of disruption