Technology: Playing the end game

Mobile phones are coming with baked-in artificial intelligence (AI), wrote Samuel Gibbs in Guardian. How long will it be before legal IT, or even legal services, follow suit? It has often been said that once AI becomes commonplace in legal services, it will become an expectation rather than an extra.

Baked-in AI means that AI is part of the smartphone’s processor. It is not something in the cloud that the smartphone connects with, but an integrated technology – like audio. At the moment, because of the volume of data and the processing power required, most legal AI relies on cloud/online access, but chances are it will move offline as processing becomes faster and more sophisticated. What will that mean for legal services and legal AI vendors, who may or may not then benefit from legal services providers working with their products, as they do at the moment? What can we expect, post-disruption?

Writing a few predictions for the Society for Computers and Law (SCL), it struck me that the legal profession has been in a state of disruption and transformation for a decade. Perhaps it is time for firms and other legal service and legal technology providers to start thinking about the end game and the post-disruption law firm.

Apart from a few sci-fi-style visions of futuristic law firms staffed (stuffed?) almost entirely with robots, cyborgs and holograms (which may end up coming true), we do not hear much about legal services post-disruption. This brings to mind the nuclear apocalypse films of the 1980s. We need to move on from the post-apocalyptic legal wasteland where automation has ‘taken’ everyone’s jobs, and think about the sparkling new legal services landscape that rises from the ashes of disruption. There has been much talk about ‘law 2020’, but now it is less than two years away.

It has been suggested that law firms will shift to industry-agnostic technology solutions, making the law firm CIO – and potentially lawtech and all its products and consultants – redundant. This is unlikely. Of course, legal services do not operate in a vacuum. Consumer and commercial technology will continue to change the direction of legal IT, and cross-industry products, processes and working practices will change how lawyers work. But law, like other professional services, is subject to specific compliance obligations, and professional standards and responsibilities, particularly around client confidentiality. Legal technology will still be needed to support legal services, and the role of lawyers as trusted advisers to businesses and individuals.

These requirements, and their limitations, challenge another common prediction: that lawyers’ engagement with technology will mean that the CIO will no longer decide what tools and applications a firm uses. Although connected technology has seen firms experience some loss of control over their data, and additional risk due to lawyers using file-sharing apps and social media (for example), law firms need the technology that supports their business to be reliable, secure and compliant with legal requirements and professional standards and responsibilities. Although the technology used to deliver legal services will no doubt continue to evolve, and may well help to reshape the law firm model, the underlying principles remain constant. Firms need an integrated IT strategy where different tools and technology work together to deliver a streamlined service and facilitate collaboration between lawyers, colleagues and clients.

Millennials are masters of work-life integration, going beyond work-life balance to ‘bring their whole selves –and their networks – to work’

– Kevin Doolan, Møller Professional Service Firms Group

AI has been the exciting tech topic for a few years now. In legal as elsewhere, the market is maturing and early adopters and investors are starting to reap the reward. Firms are combining AI applications involving machine-learning, which requires significant resources in terms of both initial cost and training, into specialist branded client-facing products and services that leverage firm and client data in unique ways, which will eventually offset the initial investment. Smaller firms, too, are using open-source software to create intelligent client-facing tools that add scalability and support business development and marketing efforts.

On the investment side, while successful lawtech start-ups are attracting significant funding once they are established, for magic circle and global law firms, innovation hubs and start-up incubators represent a relatively low-cost, and therefore low-risk investment. At best, they will have backed the next big thing in lawtech; at worst, they will have invested in innovation credibility.

For magic circle and international firms, the numbers already show the profits derived from AI and automation. Allen & Overy and Clifford Chance are among those reporting significant revenue gains from subscription-based applications and services, and subsidiary/breakaway brands. Leveraging add-on services is not a new strategy for the magic circle, but their investment in start-ups and innovation is a relatively recent development and a significant driver behind the crowded legal tech start-up market. For example, Slaughter and May was an early investor in standalone AI-powered document analytics tool Luminance.

However, notwithstanding this and other successful innovation initiatives and investments, and many firms introducing senior roles dedicated to innovation and change, there is still no clear picture of what the next iteration of the law firm will look like.

Towards the end of last year I had the opportunity to attend some debates about the impact of emerging technology on the profession.

At a recent panel discussion, representatives of large international firms outlined the benefits of introducing AI into backoffice operations and client services. For example, Clifford Chance is offering automated branded contracts, via its bespoke use of Kira Systems to analyse and build contracts. Baker McKenzie, meanwhile, has a clear strategy for driving innovation from within the firm and deciding which ideas to invest in.

I asked panellists how they envisaged the post-transformation law firm structure. But responses concentrated on specific initiatives focusing on developing streamlined and integrated tools and services – automatically leveraging real-time and historical client and case data to support decision-making and optimise service delivery.

The big firms’ dynamic transformation is impressive, but nobody offered an overarching vision of what they wanted their firm to look like. Perhaps this is because disruption itself is the new norm. Or perhaps this strategic uncertainty is based on circumstances reflecting the Peter Drucker quote: ‘Culture eats strategy for breakfast.’ We do not know what the next-generation law firm will look like because it is likely to be shaped by millennials, who are already shifting attitudes and processes as lawtech entrepreneurs and innovation leaders within firms.

In December, I attended a Managing Partners Forum presentation on cross-generational working by Kevin Doolan, managing partner of the Møller Professional Service Firms Group at Churchill College, University of Cambridge. This was based on his research at Kellogg University and Harvard Law School which found that professional services organisations, like other businesses, need to adopt new strategies for recruiting and retaining the best millennials as future leaders.

Millennials work differently from previous workplace generations. For example, they are ambitious, yet they change jobs every 18 months. This is a challenge in professional services, because, as Doolan said, they leave just as they are becoming useful to the firm. It is also a benefit, because they bring fresh ideas from different organisations. Millennials are masters of work-life integration, going beyond work-life balance to ‘bring their whole selves – and their networks – to work’. This explains their commitment to corporate social responsibility, and the fact that they thrive on recognition and feedback. As architects of the peer-to-peer market, they have opinions on how things are done and need to be heard.

Still thinking about future lawyers, there are mixed feelings about whether legal technology should be included in generalist legal education, in the same way as pre-internet journalism courses used to include shorthand and typing. Perhaps encouraged by the burgeoning lawtech start-up sector, more law schools are introducing courses that include technology and innovation. There are so many in the US that in 2017, Daniel W. Linna Jr., director of the Center for Legal Services Innovation at Michigan State University College of Law started ranking them in his Law School Innovation Index (tinyurl.com/ydyan3yk). Here in the UK, the number is growing, partly fuelled by lawtech startups hitting the headlines and raising awareness and interest among law students. New career opportunities incorporate law and tech – notably legal engineering, a term which was the topic of some discussion at the end of 2017.

New technology, new startups and new roles point to a bright future (at least in the short-term) for legal technology. But what about future lawyers who do not intend to focus on tech? How much tech should be included in generalist law courses or legal practice certificates?

As baby boomer leaders and senior managers in law firms and lawtech make way for Gen X and Gen Y, more NextGen, millennial law firms will rise from the ashes of disruption. It is only a matter of time before they challenge the establishment that is currently supporting them – the firms and institutions that are investing in innovation and start-ups. NextGen leaders are likely to do away with some long-held management practices, and focus on client experience rather than automation; but it is pretty certain that technology will be baked into the experience.