An Introduction to Legal Project Management, part 2

This is the second article in a series of articles on Legal Project Management. In the first article, we looked at the what and why: Legal Project management allows to increase productivity and profitability, and is especially beneficial in law firms who use alternative fee arrangements like fixed or flat fees, cost limits, budget restraints / capped fees and contingency fees. “Such cases require management of scope, schedule, risk, and cost in a more rigorous and measured manner than firms have practiced in the past” (Wikipedia). Because Legal Project Management is not typically part of the legal curriculum (yet), we will pay attention to some of its key principles and concepts in this article.

Legal Project Management requires a different approach to the mechanics and business of providing legal services. A useful analogy is to approach a legal project the way an architect or engineer would. Together with the client or clients, you determine what the goals and deliverables are, and how success will be measured. You work with a schedule that often has milestones. Communication with the client is ongoing, as are the evaluations of the progress that has been made. LPM typically also works with a predetermined budget that parties agree on.

In the previous article, we referred to the LPM methodology used by the American Law Firm Baker Donnely. They distinguish three different phases, and each of them has its own concepts and tools.

  • In phase 1, the tools are scope, stakeholder input, statement of work (SOW), budget, communication plan;
  • In phase 2, the tools are control scope, control budget, monitor schedule, regular team meetings, monitor tasks;
  • In phase 3,the tools are client evaluation, lessons learned, update resources, team closure meeting.

Let us have a closer look at these tools and concepts. Please note that the list below is far from exhaustive and is meant as a simplified introduction only.

One of the first things that parties have to agree upon is a project definition statement. “This is the ‘what’ and ‘why’ of your project: a short statement summarizing the purpose, goals, and final deliverable(s).” (Elizabeth Harrin, quoted by Wrike).

A more extensive version of the project definition statement is often referred to as a Statement of Work (SoW). The Wikipedia defines a statement of work as “a document routinely employed in the field of project management. It defines project-specific activities, deliverables and timelines for a vendor providing services to the client. The SOW typically also includes detailed requirements and pricing, with standard regulatory and governance terms and conditions.”

Related to this, and sometimes part of it, is the Scope of the project that parties have to agree upon. The scope of a project explicitly determines what is and what is not included in the project. It typically consists of a breakdown of all the tasks to be done in order to deliver the objectives of the project, as well as a list of measurable success criteria.

Once we have an inventory of the tasks to be done, the Schedule determines when each task has to be accomlished, and who is responsible for it. Often the work is broken down in phases, and the successful completion of such a phase is a called a Milestone.

Once we know what all has to be done, we can calculate the costs involved. Planning, managing, and monitoring the Budget also is a key element of project management.

Throughout the whole process Stakeholder input is essential. If many stakeholders are involved, it can be useful to create an organizational chart that explains who is who and what their role is. In each phase of the project communication with the client, as well as ongoing evaluations of the progress made are essential. Often this is organized in a Communication plan.

Project Management typically also involves Risk Management. Parties anticipate where things could go wrong, what the possible outcomes and the possible alternatives are.

At the end of the project, parties sit down for a Client evaluation, i.e. an evaluation by the client of how the project was completed. Parties focus on what went right or wrong, and on where there is room for improvement.

Based on the client evaluation, the law firm then compiles a report of the Lessons learned and updates its resources accordingly.

As mentioned before, this is not a way of working law firms typically are used to. Using the LPM methodologies can contribute to increase efficiency, profitability and client satisfaction, but is only part of the solution. A survey in the context of the Legal Project Management Competency Framework (LPMCF) revealed that “legal project management encompassed not only project principles and practices, it extended to technology enablement, process improvement and people leadership (team dynamics). The integration of all four of these elements represents the core foundation of legal project management in practice.”

 

Sources:

An Introduction to Legal Project Management, part 1

As a result of a push towards innovation and increased efficiency and profitability, more and more law firms are turning to Legal Project Management (LPM). So, what is it? Why is it important and what are the benefits? How does one start implementing LPM? These and other questions will be addressed in this series of articles on Legal Project Management.

Let us start by looking at two definitions of Legal Project Management, which are complementary, and have a slightly different focus. The Wikipedia defines Legal Project Management as “the application of the concepts of project management to the control and management of legal cases or matters.” The International Institute of Legal Project Management, on the other hand, does not limit LPM to the work lawyers do and offers a more general definition as “the application of project management principles and practices to enhance the delivery of legal services.” This latter definition rightfully also applies to alternative legal service providers, who typically have a proven track record of using LPM.

Both definitions are a bit circular in that they only explain Legal Project Management as Project Management for legal projects, and leave the “Project Management” part of it open. So what is Project Management? This is what the Wikipedia has to say:

“Project management is the practice of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria at the specified time. A project is a temporary endeavour designed to produce a unique product, service or result with a defined beginning and end (usually time-constrained, and often constrained by funding or staffing) undertaken to meet unique goals and objectives (…). The primary challenge of project management is to achieve all of the project goals within the given constraints.”

The basic idea behind project management is simple: if you have a complex task to perform, which typically involves coordinating work to be done by several people, then you break everything down as much as possible. You create an inventory of all tasks that have to be accomplished, and then determine who has to do what, and by when. (So, if your law firm management software has contact management, task management and an agenda, you can already cover the basics).

That, in essence, is the core of project management, but, by now, there is more to it than that. There are specific concepts, principles and ‘best practices’ to streamline the process. Attention is paid to the management of scope, schedule, risk, and cost in a more rigorous and measured manner than law firms have practiced in the past. (We’ll explain those more in detail in a follow-up article). The ongoing communication with the customer or client as well as other stakeholders, too, is an essential part of it; as is the ongoing evaluation of how the project is doing.

Legal Project Management has reached a point of maturity that there are now internationally accepted standards, as well as a Legal Project Management Competency Framework (LPMCF).

Let us have a look at an example of how LPM is implemented. In the US, the American Bar Association has referred to the LPM approach of the Baker Donelson law firm as a model of how to implement LPM. “Baker Manage”, as their LPM system is called, works in three phases:

  1. Development Phase: here the objectives are to identify the client’s needs and to create a project plan. The tools to achieve these objectives include the scope, stakeholder input, the statement of work (SOW), budget, and a communication plan.
  2. Execution Phase: here the objective is to implement the client goals and to engage in ongoing communication with the client. The tools to achieve this objective include: control scope, control budget, monitor schedule, regular team meetings, monitor tasks.
  3. Closure Phase: here the objective is to offer the client the solution and evaluate the client’s satisfaction with the solution. The tools at hand are: client evaluation, lessons learned, update resources, team closure meeting.

So, what are the main reasons for law firms to start turning to Legal Project Management? For many law firms using LPM was a response to a demand by their clients. Clients prefer alternative fee arrangements where they know how much something is going to cost them. LPM allows you to break down the tasks and costs, and give a clearer view of what the client will end up paying. Predictable costs are a first benefit.

The main reasons to use LPM are increased efficiency and profits. Legal project planning offers noteworthy opportunities for profit maximization and for substantial revenue growth. Law firms, as well as Alternative Legal Service Providers often specialize in certain types of cases and/or services. The combination of repetition and LPM allows to improve efficiency and increase profits.

Because constant evaluations and feedback are part of the process, LPM also improves team cooperation and proficiency. And it also strengthens the relationship between your law firm and your clients.

All of these are good reasons to consider using LPM in your law firm, wouldn’t you agree?

In part 2 of this series, we’ll pay attention to some of the key principles and concepts of Legal Project Management

 

Sources:

Alternative Legal Service Providers

Recent years have seen a dramatic increase in the amount of Alternative Legal Service Providers (ALSPs) on the market. This is the result of a growing demand for legal services that are more efficient and affordable. Maybe surprisingly, not only businesses, but law firms and legal departments, too, are increasingly using the services of these ALSPs. Let’s have a closer look.

What are Alternative Legal Service Providers?

Alternative Legal Service Providers are service providers that offer legal services outside of the traditional model of legal professions and organizations. The Georgetown Law Center for the Study of the Legal Profession, the University of Oxford Saïd Business School, and Thomson Reuters, published a report last year on ALSPs. In it, they “considered ALSPs to encompass activities performed by non-traditional legal service providers (including independent affiliates of law firms), that are directly related to the provision of legal services. The definition excludes other nonlegal activities that might be outsourced such as accounting, IT support, HR management, etc. And it also excludes companies that provide legal-related software only rather than services.”

So, what legal services do they provide?

ASLPS tend to be niche companies that specialize in one or more specific tasks. These tasks typically require a certain amount of expertise and are in high demand. The services they provide include:

  • Discovery and eDiscovery (electronic discovery)
  • Document review (including contract review)
  • Contract management
  • Litigation support
  • Contract lawyers and staffing
  • Investigation support and legal research
  • IP (intellectual Property) management, etc.

What makes them ‘alternative’?

They are alternative in two ways. Firstly, the entity that delivers the legal service is usually not a law firm. Secondly, the services, too, are delivered via a model that departs from the traditional law firm delivery model.

From an article titled “What is an alternative legal service provider?” on the paralegaledu.org website:

“The thing that makes an ALSP alternative is that it is not, and does not pretend to be, a law firm. Instead, it is a legal services business that can provide one or more services that law firms would traditionally offer, but often at a lower cost or with other advantages, including increased expertise, flexibility, and speed. Because they do not have to fit into the structure and hierarchy of a typical law firm environment, ALSPs may be free to alter their business practices to increase efficiency using technology or other innovative practices.”

ALSPs tend to be more tech-savvy than traditional law firms, and some of the services they provide rely on cutting edge technology. Great progress was made, e.g., in areas like eDiscovery, contract and document review by using Artificial Intelligence / Machine Learning. The market share of ALSPS is expected to grow because they take advantage of increasingly sophisticated Artificial Intelligence technology.

Who is using the services of ALSPs?

As was mentioned in the introduction: ALSPs are not only used by businesses, but also by legal departments and law firms. The report mentioned above found that 51% of law firms and 60% of corporate legal departments are already using Alternative Legal Service Providers for at least one type of service. And those numbers are expected to grow.

More specifically, the findings show that law firms are more inclined to use litigation support services (e.g., e-discovery, document review, litigation and investigative support), while corporations are more likely to use services in specialized areas (e.g., regulatory risk and compliance services, specialized legal advice, legal research and IP management).

Why use ALSPs – What are the benefits?

There are several good reasons to consider working with an ASLP. Initially, people turned to ALSPs because they could offer legal services at a lower cost than law firms did. The report found that these days people also use ALSPs because they tend to be more efficient than law firms. They usually can deliver their services faster than law firms can. Lastly, and increasingly more important: because they specialize in specific tasks they can offer a level of expertise that others don’t have.

Sources:

Law Firms and Innovation

Making headlines some days ago, was a story of how the UK government is spending 1 billion GBP to modernise its court system. The aim of this innovation project is to cut annual spending by £250m and staff by 40%, while at the same time improving access to Justice, as well as the speed and quality of service delivery (e.g. by the use of online forms for petitions).

Lawyers, too, are being urged to be innovative. Last year, the British Law Society published a 116-page guide on innovation for law firms, called Capturing Technological Innovation in Legal Services. And there are good reasons to being innovative. It gives a competitive advantage, improves productivity, profitability, and, as mentioned above, the speed and quality of service delivery.

But what does it mean for a law firm to be innovative? The first thought that usually comes to mind, which is also reflected in the title of the Law Society document, is the use of new technologies. Lawyers have already successfully been automating many aspects of their law practice for over three decades. New advances in the fields of artificial intelligence and machine learning are heralding a new age, a second wave if you want, of office automation.

Some examples: law firms can already use virtual legal assistants to do legal research. They can even use virtual receptionists. Document assembly and document review can now be done more efficiently by AI than by their human counterparts. In fact, many specific tasks that have a sufficient degree of repetition can already be automated, as the advent of robot lawyers and legal chatbots has proven. Progress is also being made with smart contracts, where human intervention is often no longer required. AI is proving useful, too, in knowledge management and eDiscovery, as well as in predicting the possible outcome of cases.

These advancements in legal technology are resulting in a change in the professional demography of law firms. With new technology comes a demand for new skill sets, which in turn leads to new roles and positions that need to be filled in law firms. It is not uncommon, these days, to find law firms who employ specialized programmers, statisticians and data scientists, chief data officers, and project managers.

One of the more novel new occupations is that of Data Analytics Attorneys (often shortened to either data attorneys or analytics attorneys). In their article on legal innovation, Wendy Butler Curtis and Kate Orr explain that “the data analytics attorney understands the needs of the client, the function of the tools, and the value of the data. They know it is necessary to train and maintain the artificial intelligence and the richness and quality of the data to predict the accuracy and value of the AI output. Analytics attorneys are also adept at identifying tasks that can and should be automated.”

But just as innovation in law firms is not limited to the use of new technologies, so are the new roles in law firms not limited to tech related jobs. Gone are the days where lawyers were solitary consultants who would charge by the hour. Lawyers now are professionals who are running a business that delivers legal services and products. They are concerned with optimizing and automating processes and work flows, with improving service delivery, as well as customer relations and customer satisfaction. As a result, law firms started employing non-lawyers to run their company (CEO), to keep their finances in check (CFO), and to handle their accounting, marketing, and even customer relations.

As these examples show, innovation requires a different approach, which can affect each aspect of being a lawyer and running a law firm. The first part of the Law Society’s paper focuses on technological innovation in practice. It deals with working smart (which involves putting the client first, innovation hubs, Robotic Process Automation (RPA), Machine learning and Artificial Intelligence, and predictive analytics), with agile resourcing (where attention is paid to a fluid workforce), with new pricing models, as well as with innovating for Access to Justice.

 

Sources:

Legal Document Assembly

Lawyers produce documents, lots of documents. They write letters, warnings and exhortations, briefs, reports, contracts, etc. So, it shouldn’t come as a surprise that one of the first areas where law firm automation started was document assembly (also called document automation or document generation). In fact, lawyers have successfully been using document assembly for over three decades.

Document assembly is one of the four pillars of law firm management that can be automated to a large extent without the need for AI. The others are customer relation management(CRM) or contact management; the combination of billing, invoicing, and collections; as well as managing tasks and deadlines.

The principle behind document assembly is simple. You take frequently used documents, and create a template for them, that can then be used to create new documents by automatically adding the relevant data. It’s a standard feature in word processors. By using macros or elements built into the firm management software, or a combination of both, it is possible to integrate more advanced features like check lists (for which items to include), optional clauses, rules and calculations, etc.

There are many benefits to using document assembly. The most important one is that it improves productivity and efficiency. Typically, document assembly is a part of practice management software, which has access to the relevant data that have to be merged into the template. Creating a new document (or the basis for a new document) therefore takes a fraction of the time it would take to do the same thing manually. It also leads to less errors in the text than would be the case with manual input. And another way that document assembly increases productivity and efficiency is that, once the process is fine-tuned, it can easily be done by newly hired or junior staff, with minimal training.

Document assembly also helps increase revenue in other ways. By using commercially available professional templates for legal documents (or by swapping templates with other lawyers), you can widen the range of services that you offer. You could even use a client portal (like CICERO Web View) where you give your clients access to these templates. They have to fill out an online form to provide the necessary information that the system doesn’t have yet, and then they can create the new documents by themselves. You could also put some commonly used simple templates and forms online as a free service to attract new clients.

With the growing demand for Alternative Fee Arrangements (AFA), document assembly also offers a better way of controlling costs that benefits both you and your clients. With automatically assembled documents you can charge a fixed fee per document, rather than charging the client by the hour or minute. That way, both parties know exactly what they’re getting in advance.

As was illustrated above, it is possible the further improve productivity by using your standard documents in combination with online forms to capture the relevant data. If your client enters the data online, it saves you the trouble of having to do so. And don’t forget that document assembly can also be used to compose emails. By creating a set of standard templates for emails, you can further increase productivity.

Artificial Intelligence is already taking document assembly to new levels. There already is the example of an Artificial Intelligence system (Kira) that scanned documents to then extract the relevant data by itself that had to be merged into a (Hotdocs) template, generating a legal document all by itself. In other words, nobody had to look for or enter the relevant data as the Machine Learning algorithms were able to do it.

Machine Learning algorithms have also successfully discovered certain rules that are being used to combine or omit certain clauses in legal documents. And there are Artificial Intelligence solutions available that will review legal documents and point out certain problem they may have. They do it faster and generally more accurately than their human counterparts do.

Experts expect Artificial Intelligence to further disrupt how document assembly is being used. They predict that it will evolve in a way where a different approach will be needed, where more is automated, and more is tested and validated.

 

Sources:

 

Productizing Legal Services

Three evolutions have put the idea of productizing legal services firmly in the spotlight. First, there is the increased demand for Alternative Fee Arrangements (AFAs): clients don’t like billable hours because they prefer to know in advance how much something will cost. So, lawyers started using fixed fees for certain services (e.g., a non-disclosure agreement will cost you amount X), or started offering subscription billing, e.g., as an option. With subscription billing a client pays a monthly fee, which entitles him or her to x amount of work, or, e g., to so many contracts, etc.

Another area where productizing legal services pops up is in software that analyses and automates workflows in law firms. The increased usage of AI is leading to major progress in automating workflows, which in turn allows these workflows to be productized.

But the best examples of legal services being productized are probably the services offered by robot lawyers and legal chatbots. These services have completely been automated and turned into products that offer a solution to a legal problem. There already are solutions, e.g., to create legal documents and forms, to review contracts, to appeal parking and other traffic tickets, to offer first advice on divorce, or that will submit damage claims for you with regard to flights, that assist you with requesting maternity leave or in case of landlord contract violations, etc. And the list is growing on an almost daily basis.

So, what does it mean to productize legal services? Simply put, productizing legal services means that you are turning your legal services into products. Services are normally delivered one at a time. (Which implies that there is a limit to the number of billable hours one can do over a given period of time). Products on the other hand can be produced and sold at scale. Producing more products is a matter of enhancing production capacity. And with software solutions, that is not hard to do. Now, obviously, not all legal services lend themselves to being productized. But the three evolutions described above show that many can. A study found that, at present, 23% of the work a lawyer does can be automated. With the continued progress that is being made in the field of legal Artificial Intelligence, that percentage will only rise.

There are several benefits to productizing legal services. The first one, already hinted at above, is scalability. Not only does a robot lawyer, e.g., take seconds to review a contract, where a lawyer takes hours, but if it reaches its capacity, it’s just a matter of increasing that capacity, typically at minimal cost. A second benefit is predictability: With a product, you know in advance how much it will cost. A third benefit is a better match between offer and demand, as the client knows in advance what he or she will be receiving for his or her money. As a result of this, you gain consumer trust, which is a fourth benefit. A fifth benefit is that when you start productizing your legal services, you are really maximizing your productivity.

As the above examples illustrated, the role played by technology is crucial in productizing legal services. Only now have we reached a point where the technology is available to start productizing legal services. These technologies allow to automate the workflow and thus maximize your operational efficiency. They also allow the scalability of the solutions offered.

The way to start productizing legal services is by analysing processes and workflows, standardizing and automating them the maximum extent. If you want to launch yourself in the robot lawyer market, find a common problem, preferable in a niche that requires some expertise; analyse how much of the workflow can be automated, and if it can, offer an easy to deliver solution. Even without considering offering robot lawyer service, analysing workflows and processes at your law firm will allow you to automate them, which will benefit your firm.

 

Sources:

OneDrive for Lawyers

You may not have noticed, but Office 365 keeps on being updated, and a lot of the subtle enhancements have to do with the ongoing integration of additional cloud services. Let’s have a closer look at Word and OneDrive.

OneDrive comes in different versions with different features. Anybody can sign up for a free account, but, as a lawyer, you are typically expected to sign up for a professional version of ‘OneDrive for Business.’ Many law firm management software providers advise to use Office 365 Business Premium. (If, for some reason, you are using a version of OneDrive that does not offer certain features, it is good to know it may well be possible to subscribe to those features separately).

In Office 365, it is possible to save documents to the cloud, which is done by saving them to OneDrive. A first advantage of having a document in OneDrive, is that it can be accessed from anywhere at any time, and on most devices. There are apps for mobile devices and tablets, and it is even possible to use Office Online, a free web version (with a limited feature set) of the most popular Office applications.

Another advantage of using OneDrive is that the copies saved by autosave are saved in the cloud, too. If your device would crash while working on a document, you can continue working from another device. Microsoft also automatically makes backups of all your OneDrive documents.

One of the biggest advantages of using OneDrive, is that you can share files and folders with other people. If you need feedback from your client, from other lawyers, or even from an external consultant, there is no need to email anybody a copy of the document, you just give them access to the document in OneDrive. And you have the option to determine for each person whether they get access to just read or to edit the texts. etc. It is also possible to insert comments into the text, where Word will keep track of who said what. What’s more, the person you want to give access to one or more documents, doesn’t even need to have Office 365 themselves. They can use the free apps, or Office online to access the documents. All you have to do is send them an email with the link.

OneDrive is specifically designed for people to cooperate on documents. It has built-in capabilities such as advanced permissions management, versioning control, eDiscovery, and records management to ensure documents are managed, controlled, archived and can be retrieved in one place with reduced overhead.

“But is it safe?” you may wonder. The short answer is that it is. Typically, professional cloud service providers have excellent security measures in place. Your data is in all likelihood more secure in the cloud than it is on your own servers. Add to that that the professional version of OneDrive allows to use two-step authentication to access documents. OneDrive also offers a more advanced permission management system, called the Advanced Security Management (ASM), which will detect abnormal usage and allow you to monitor how your documents are being accessed and used. (If your version of OneDrive doesn’t include ASM, it is possible to order it separately).

It is important to remain aware of the terms and conditions of OneDrive, especially if, as a lawyer, you store evidence on OneDrive. Microsoft has strict policies when it comes to, e.g., nudity or graphic violence. Storing such content, even if it is evidence in a case, may be a violation of Microsoft’s terms and conditions, and may lead to your account being suspended. One possible workaround, is to sign up for ‘Customer Lockbox’ which gives you greater control over what Microsoft can scan on your OneDrive, but it offers no guarantees. If Microsoft does find anything it considers a violation of their terms and conditions, your account may be suspended.

We started this article by referring to the constant updates of Office 365 and the addition of additional cloud services. For many of these cloud services, is making progress with the integration of Artificial Intelligence. You may know that within Word, e.g., you have the option to translate text in a document to different languages. Those translations have been getting better and better. Another new feature is an intelligent dictionary for acronyms, which will tell you what a certain acronym in a certain context means. Specifically interesting for lawyers are the advancements Microsoft has been making in the field of eDiscovery on OneDrive.

Needless to say that the usage of OneDrive is integrated most modern software packages for law firm management.

PS: this article was written in reply to a request for information about OneDrive for Lawyers.

Sources:

When robot lawyers and lawyers compete

‘Man versus Machine’ contests are always popular. We have already seen such contest where Artificial Intelligence (AI) systems defeat human experts at chess, Jeopardy, and Go. And in recent months, robot lawyers have been giving human lawyers a run for their money, too. In the headlines this week is a story of an Artificial Intelligence system outperforming human lawyers in reviewing non-disclosure agreements. Some months ago, in October 2017, there was a similar story about an AI system that was better at predicting the outcome of cases about Payment Protection Insurance than human lawyers were. Let’s start with the latter.

Case Cruncher Alpha

One of the first occasions where robot lawyers beat their human counterparts happened in October 2017, in the UK. The Artificial Intelligence system taking on the human lawyers was Case Cruncher Alpha, developed by Casecrunch. Casecrunch is the current name for the company that previously had developed LawBot, Lawbot-X, and Divorcebot. It was started by a group of Cambridge University Law students. (See our article on Legal Chatbots). Case Cruncher Alpha is designed to study existing legal cases in order to predict the outcome of similar cases.

In the contest, CaseCruncher Alpha competed with 112 lawyers. All of them were commercial lawyers from London. None of them were experts in the specific matter the cases dealt with.

The purpose of the contest was to predict the outcome (success or failure) of cases dealing with Payment Protection Insurance (PPI). The topic is well known in the UK, where several banks were ordered to pay damages to customers to whom they had sold insurance products that they didn’t require. The contestants were given real cases that had been handled by the UK Financial Ombudsman Service. The lawyers were permitted to use all available resources.

The result was a staggering defeat for the lawyers: they achieved an average accuracy score of 62%, while Case Cruncher Alpha scored 86.6 %. (No data were provided on how individual lawyers did, or on whether there were any that had scored better than the AI system).

Richard Tromans from artificiallawyer.com rightfully points out that evaluating the results of this contest is tricky. They do not mean that machines are generally better at predicting outcomes than lawyers. What they do show is that if the question is defined precisely enough, machines can compete with, and sometimes outperform human lawyers. At the same time, this experiment also suggests that there may be factors other than legal factors that contributed to the outcome of the cases. But what the contest undoubtedly made clear was that legal prediction systems can solve legal bottlenecks.

Ian Dodd was one of the judges. He believes AI may replace some of the grunt work done by junior lawyers and paralegals, but that no machine can talk to a client or argue in front of a High Court judge. In his view, “The knowledge jobs will go, the wisdom jobs will stay.”

LawGeex

Another occasion where robot lawyers got the upper hand was in a contest in February 2018, in the US. In this case, the Artificial Intelligence system was developed by LawGeex, the company that was started in 2014 by commercial lawyer Noory Bechor (cf. our previous article on AI and contracts). Noory Bechor had come to the realization that 80% of his work consisted of reviewing contracts and was highly repetitive. He believed it could be done faster, cheaper and more effectively by a computer, and that’s why he started LawGeex.

In this challenge, the AI system competed with 20 lawyers in reviewing Non-Disclosure Agreements. All 20 lawyers were experts in the field. The LawGeex report explains: “The study asked each lawyer to annotative five NDAs according to a set of Clause Definitions. Each lawyer was given four hours to find the relevant issues in all five NDAs.” In that time, they had to identify 30 legal issues, including arbitration, confidentiality of relationship, and indemnifications. They were given scores reflecting how accurately they identified each issue.

Once again, the AI system did better than the human lawyers. It achieved an accuracy rate of 94%, whereas the lawyers achieved an average of 85%. There were, however, considerable differences between how well the lawyers did. The lowest performing lawyer, e.g., only scored 67%, while the two best performing lawyers beat the AI system and achieved, depending on the source, either 94 or 95% accuracy. For one specific NDA, one lawyer only identified 55% of the relevant issues, while for another one the AI system reached a score of 100%, where the best human lawyers reached 97% for that one.

The human lawyers were no competition for the AI system when it came to speed. The AI system cleared the job in 26 seconds, while the lawyers took 92 minutes on average. The longest time one lawyer took, was 151 minutes, while the shortest time was 51 minutes.

Gillian K. Hadfield is a Professor of Law and Economics at the University of Southern California who advised on the test. She says, “This research shows technology can help solve two problems: both making contracts faster and more reliable, and freeing up resources so legal departments can focus on building the quality of their human legal teams.” In other words, the use of AI can actually help lawyers expedite their work, and free them up to focus on tasks that still require human skills.

 

Sources:

The General Data Protection Regulation, Part 2

In part 1 of this article, we warned about the looming deadline of 25 May 2018, the date by which the GDPR becomes enforceable. Part 1 of the article dealt with the scope of the GDPR. It also discussed how the GDPR introduces one single set of rules that applies in the whole of the EU, what the lawful bases of processing private data are, and about parties’ responsibility and accountability.

In part 2 of this article, we will first have a closer look at the most important ‘Digital Rights’ the GDPR introduces: The Right of Access (art. 15), the Right of Correction / Rectification (art. 16), and the Right to Erasure (art. 17), and the Right of Data Portability (art. 20).

Right of access by the data subject (Article 15): As the name says, the Right of Access is a data subject right. It gives EU inhabitants the right to get access to their personal data and to information about how these personal data are being processed. Upon request by the data subject, a Data Controller must provide an overview of the categories of data that are being processed (Article 15 (1) (b)), as well as a copy of the actual data (Article 15 (3)). The Data Controller must also inform the data subject on the details about the processing such as: what the purposes are of the processing (Article 15 (1) (a)), with whom the data is shared (Article 15 (1) (c)), and how it acquired the data (Article 15 (1) (g)).

Right to rectification (Article 16) and the Right to Erasure (Article 17): As was the case under the old Data Protection Directive, the data subjects also have the right to obtain from the Data Controller the correction of inaccurate data, and the completion of incomplete data, without undue delay (Article 16). In a famous case, the EU Court of Justice had ruled in 2014 that EU inhabitants also had a right to be forgotten. In the GDPR, this right to be forgotten was replaced by a more limited right to erasure. Article 17 provides that the data subject has the right to request erasure of personal data related to them on any one of a number of grounds including non-compliance with article 6.1 (lawfulness) that includes a case (f) where the legitimate interests of the controller is overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data.

Right of Data Portability (Article 20): The British Information Commissioner’s Office (ICO) summarizes the right to data portability as follows: [it] “allows individuals to obtain and reuse their personal data for their own purposes across different services. It allows them to move, copy or transfer personal data easily from one IT environment to another in a safe and secure way, without hindrance to usability. It enables consumers to take advantage of applications and services which can use this data to find them a better deal, or help them understand their spending habits.” The right applies both to data that has been ‘provided’ by the data subject, as well as data that has been ‘observed,’ such as information about their behaviour. The Data Controller must comply with the data subject’s request, and must provide the data in a structured and commonly used Open standard electronic format.

The GDPR contains far more regulations, e.g., on data breaches (art 33-34), on the Data Protection Officer (art. 37-39), on sanctions and pseudonymisation, but those are beyond the scope of this article.

Sources:

The General Data Protection Regulation, Part 1

Are you aware of the important deadline of 25 May 2018 that is looming? “What deadline is that?”, you may ask. It is the deadline to comply with the EU General Data Protection Regulation (GDPR). (The official name is the ‘REGULATION (EU) 2016/679 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC ‘). It came into effect on 25 May 2016 and provided a two-year transition period to comply with its requirements. It therefore becomes enforceable on 25 May 2018. And that is important because non-compliance with the GDPR can lead to severe penalties of up to 4% of worldwide turnover, or of 20 million EUR, whichever is biggest! In this two-part article, we’ll have a closer look at the GDPR.

So, what is the GDPR? As the name says, it is a EU regulation, which means it becomes directly enforceable and does not require any legislation on a national level. Its primary purpose is to protect the personal data of private citizens and residents, and to give them more control over those personal data. It also wants to simplify and unify the regulatory environment for national and international businesses, by creating one set of rules that applies throughout the EU. (To that end, each member state of the EU must create an independent Supervisor Authority to hear and investigate complaints, sanction administrative offences, etc.; and these Supervising authorities can organize joint operations). The GDPR replaces the 1995 Data Protection Directive, which was conceived before the Internet era, and was hopelessly outdated and not suited to deal with the changes the Internet has brought.

The GDPR has far-reaching effects and is already having an impact on the legal market. To comply with the new regulations, a lot of the existing software that companies are using has to be modified. This is obviously the case for CRM software but also affects, e.g., eDiscovery software, document management software, etc. The GDPR has also led to entire new ranges of services and products, which, given the scope and scale of the GDPR, makes sense. There are apps to test one’s knowledge and compliance or readiness with regard to the GDPR. There are intelligent checklists and other AI solutions that can review the data you are keeping. There already are AI solutions that can review your contracts.  There are online reviews and tests, including quite detailed online interviews, as well, to check whether you are complying with the GDPR.

The GDPR also provides new opportunities for lawyers. Some law firms already are assisting their clients by checking whether they are GDPR compliant and by making recommendations if they are not.

So, with the deadline only months away, how well prepared are we for the GDPR? Not very well, it seems. Research by the UK Government revealed that in January 2018, only four months before the GDPR becomes enforceable, less than half of businesses in the UK were aware of the upcoming data protection laws, or of what the new legislation means for how information security is handled. In other words, the majority of UK businesses is not yet in order. The situation is worst for the construction and manufacturing sectors, where only one in four businesses is aware of the GDPR. The finance and insurance sectors are said to have the highest awareness of the legislation.

And what about law firms? Research published three months ago revealed that at the time, three quarters of law firms were still unprepared for the GDPR, potentially opening them up to large penalties.

Let us now have a closer look at the GDPR itself and start with the scope. Question 1: what does it deal with? The regulation applies to ‘personal data’. The European Commission defined ‘personal data’ as ‘any information relating to an individual, whether it relates to his or her private, professional or public life. It can be anything from a name, a home address, a photo, an email address, bank details, posts on social networking websites, medical information, or a computer’s IP address.’
Question 2: Who does it apply to? The regulation applies if any of the following conditions are met: if the data controller (an organization that collects data from EU residents) or the data processor (an organization that processes data on behalf of data controller e.g. cloud service providers) or the data subject (person) is based in the EU. In other words, the regulation also explicitly applies to organizations based outside the European Union if they collect or process personal data of EU residents. There are exceptions for personal data that are processed within the EU for national security and law enforcement purposes.

Data can only be processed if there is at least one lawful basis to do so. The lawful bases for processing data are:

  • the data subject has given consent to the processing of his or her personal data for one or more specific purposes. This consent must be explicit for data collected and the purposes data is used for.
  • processing is necessary for the performance of a contract to which the data subject is party or in order to take steps at the request of the data subject prior to entering into a contract.
  • processing is necessary for compliance with a legal obligation to which the controller is subject.
  • processing is necessary in order to protect the vital interests of the data subject or of another natural person.
  • processing is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the controller.
  • processing is necessary for the purposes of the legitimate interests pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data, in particular where the data subject is a child.

Anybody processing personal data must keep records of the processing activities. These records must include the purpose of the processing, the categories involved, as well as the envisaged time limits, and must be made available to the Supervising Authority upon request.

The regulation also requires a ‘data protection by design and by default.’ This means that the development of the business processes for products and services must be explicitly designed to take the protection of one’s data into account, and that the default settings must be such to promote optimal protection of personal data. (There are other requirements, like pseudonymisation, etc., which are beyond the scope of this article).

To be continued: in part two of the article, we’ll have a closer look at the digital rights EU residents are granted under the GDPR.

 

Sources: