AI and technology in law firms

As disruptive technologies change the legal profession, from the way law firms operate to the tasks that trainee solicitors are expected to perform, we look at what it all means for junior lawyers.

Artificial intelligence (AI) is revolutionising the way many of us work. Many tasks that were previously reserved for humans will be performed more quickly and cheaply by automation. Even in the traditionally old-fashioned legal profession, disruptive technologies have transformed the day-to-day roles of trainee solicitors compared to a decade ago.

Leading legal thinker and IT adviser to the lord chief justice, Richard Susskind, has updated his influential book Tomorrow’s Lawyers and The Future of the Professions to mark the end of the “age of denial”, during which law firms and UK legal institutions ignored the rise of AI and the possibilities it offers. Susskind argues that we are now in a period of “resourcing”, where firms and so-called ‘Tesco law’ entrants to the market are finding people to do to the work they need for less money through outsourcing, as was the case in the manufacturing industry during its own technological revolution over 20 years ago.

The trend sees many firms outsourcing their HR functions, application processes and even tasks such as reviewing documents and legal research – and helps to explain the widespread practice of employing paralegals on fixed-term contracts.

Susskind predicts that this resourcing period will continue to around 2020, after which a decade of disruption will ensue, where a key task for lawyers will be to work on new ways of delivering legal services. While Terminator-style robots probably won’t be coming to usurp the lawyer’s privileged position of trusted adviser, it is likely that clients in pursuit of cheaper, faster services could sacrifice the human touch altogether for many basic legal functions.

The changing training contract

One of the most significant studies on the subject conducted by academics at the University of Oxford in 2013 suggests that there is a 94% chance that paralegal roles will be replaced by algorithms within the next 20 years. The news is much better for trainee solicitors, who have only a 3.5% chance of being replaced by AI during that time according to the study.

The role of trainee is therefore being adapted to embrace technology. “In recent years, the growth of disruptive technologies including artificial intelligence and predictive coding has meant that less-bespoke work, such as drafting simple contracts and reviewing documents, that was traditionally undertaken by junior solicitors and trainees is increasingly automated,” explains Samantha Brown, partner at Herbert Smith Freehills (HSF). “Technological changes have also informed changes in the way in which trainees work and the type of work they are expected to undertake. For example, 10 years ago a trainee in dispute resolution would have likely spent a significant proportion of their time undertaking document review. Now, a trainee is more likely to manage the process of referring the initial document review to an office or third-party provider where the work can be undertaken at a lower cost. The trainee will then likely undertake secondary review of relevant documents flagged by the primary reviewers. This means that management skills and an understanding of technology – and how to resolve issues that arise with technology – are increasingly important skills for trainees.”

The embrace of automation is not simply a way of keeping costs down – it is also necessary to enable lawyers to cope with the sheer speed and volume with which information is now relayed. “This has presented challenges and opportunities for law firms,” explains James Leadill, associate at HSF. “For example, the increased use of email as a method of communication has led to a vast increase in the scale of document review exercises carried out in the event of litigation or regulatory investigations.

“Similarly, the increased use of electronic documents has led to a significant increase in the scale of due diligence exercises undertaken in the context of mergers and acquisitions and initial public offerings. Technology has developed to address the challenges created by an increase in the quantity of information which law firms need to process. Automating the process of document review and using predictive coding to identify the most relevant documents has helped make this process more manageable and cost effective.

“Solicitors increasingly need to understand how these technologies work and how to resolve technological issues when they arise, while traditional skills associated with lawyers, including an understanding of how clients operate, an ability to apply the law to a particular fact pattern and an ability to work well within a team remain important.”

Benefits for law firms

Some law firms are nurturing disruptive technologies through initiatives such as ‘insourcing’, where tech start-ups are provided with office space and resources within a firm – good examples are Herbert Smith Freehills’ notable programmes in Belfast and Melbourne.

Meanwhile, many firms have moved to establish support offices in new cities, which manage tasks such as legal research and develop innovations in the way tasks are performed utilising technology. Samantha explains the trend: “There are two main benefits to law firms in embracing disruptive technologies. First, by developing and utilising new technologies and methods of operating, law firms are able to develop closer relationships with clients and provide a more seamless service. For example, by setting up offices in lower-cost jurisdictions and embracing relatively new technologies like predictive coding, law firms are able to undertake repetitive tasks like document review more efficiently and at a lower cost for both the law firm and the client.

“This trend is demonstrated by the rapid growth of our Belfast office from a handful of employees in 2011 to over 240 by 2016. Second, working with a technology start-up at an early stage in its development gives a law firm a more in-depth understanding of how its business operates. This gives a law firm a greater understanding of what legal services the business requires, and how these services should be delivered. Engaging with a start-up at an early stage also enables a law firm to develop a strong personal relationship with the relevant individuals at the business.”  

Human skills remain vital

Considering the outlook for the profession that many readers will soon be joining, James believes that “technology presents both a threat and an opportunity for law firms, lawyers and their clients. The law firms that are most successful in the future are likely to be those which are able to service their clients' needs as effectively and efficiently as possible.”

In addition to embracing the efficiencies enabled by technology within their firms, as ever lawyers need to ensure that they have an in-depth understanding of how their client's business operates, and honing this understanding (which cannot yet be replicated by software) is key to a junior lawyer’s development. “This includes any likely future changes to a given client’s business or the sector in which it operates, in particular changes caused by developments in technology,” explains Samantha. “For example, lawyers and law firms working in the automobile sector need to ensure that they are prepared for likely changes caused by the development and increased use of autonomous vehicles. This includes potential changes to how automobiles are regulated, insured and kept secure. Ultimately, law firms and lawyers that understand and embrace technological change are likely to be best placed to succeed in an age of artificial intelligence.” 

Josh Richman is the senior editor of LawCareers.Net.