AI Trends Driving the Legal Industry
It may be some time before we see cities in the sky, experience space tourism, and commute to work in flying cars (a la George Jetson). However, a concept once thought to be far outside the realm of possibility is now on the verge of transforming the modern workplace: artificial intelligence (AI). As technology continues to evolve, the use of AI will continue to proliferate in the coming years.
From chatbots that advise about whether you have to pay your parking ticket, to an algorithm that predicts US Supreme Court decisions, applications using artificial intelligence in tandem with legal service are mushrooming. Here are three trends driving AI adoption in the legal industry.
AI Fueled Automation Already Disrupts the Delivery of Legal Services
Technology is the driver of a “better, faster, cheaper” delivery of certain legal services. Several corporate legal departments and law firms utilize AI for the review and standardization of documents, and the list of potential tasks is increasing. AI’s impact on the legal market is in its nascent stage, but its impact on efficiency, risk mitigation, and dramatic reductions in the time and cost of human review is significant.
Although not specifically dependent on AI technology, globalization and technological advances cultivated the “legal process outsourcing” (LPO) model. LPO relies on labor arbitrage and technology to dramatically reduce the cost of high-volume/low-value “legal” functions (e.g., e-discovery, contract review, knowledge management, compliance, and other routine practices). LPOs have successfully redirected certain repetitive tasks from high-priced law firms, demonstrating that automation technology and process management-together with legal expertise-are all essential components in legal delivery.
Big Data Analytics
There are multiple forms of analysis leveraging Big Data. They include descriptive, predictive, and prescriptive analytics, all of which have a significant impact on the future of law practice. In legal analytics, the power lies in the insights derived from data. Descriptive analytics uses advanced technologies such as natural language processing and machine learning to mine large volumes of legal data and turn it into actionable knowledge and insight. The focus of descriptive analytics is on historical data, which it extracts and organizes to help identify legal trends over time and analyze behaviors of participants in litigation. Lawyers can use the information to determine the likely outcomes of cases better, develop winning legal strategies, estimate the value of a case, forecast litigation costs, and make crucial decisions, including whether to settle or proceed to trial.
Many retail organizations use predictive analytics to create a 360-degree customer profile and predict customer behavior. Using a wide variety of data sources, they try to understand their customers so they can send them the right message at the right moment, via the right channel. Law firms can use the same type of predictive analytics to gain a deeper understanding of judges and juries. By examining previous behavior in court or the profiles of individual judges, it becomes possible to predict how they will behave in a particular case. The legal tech startup, Judge Analytics, created a platform that offers detailed insights on any judge in the US. This information enables lawyers to understand better the judges involved in their cases and to develop the best strategy for their clients.
While predictive analytics provides insights into potential futures based on data, prescriptive analytics offers actual advice, and continually refines its recommendations by tracking outcomes of actual decisions and incorporating that information in future recommendations. As analytics, machine learning, natural language processing technologies advance, it is only a matter of time before this technology becomes an accepted, trusted partner to lawyers and legal teams.
General Counsel and Lawyers Increasingly Serving as CEOs and Corporate Board Members
Today’s General Counsel are involved in all business functions and manage many business teams. Attorneys are becoming true business partners, leading initiatives and providing strategic legal and business advice. It’s not uncommon for lawyers to manage parts of or the entire human resources, cybersecurity, and business development departments. Instead of preventing disasters, fighting fires, and assessing risk, GC’s are making critical business decisions, stirring progress, and leading innovation. In the corporate world, that innovation depends heavily on technology adoption.
Legal education will need to resemble business school education, with case studies, leadership training, and active networking. The future law school, law firm, and overall lawyer training approach and curriculum will have to change. Some leading law schools have already started to include technology into their curriculum. Law students would be smart to look beyond their legal education and become tech literate, as their ability to analyze data and operate legal software may be just as important as their knowledge of cases.
AI can improve efficiency and accuracy by automating tedious, repetitive work such as research, document review, or litigation support. It will not replace lawyers or the strategic value they provide, but it will profoundly alter the way legal services are delivered. It will redefine the tasks and functions lawyers perform as well as the business models delivering them. The real concern is for the leaders of legal departments and law firms who will find their positions replaced by competitors who are maximizing data to find and leverage new opportunities.