AI and Contracts

Artificial Intelligence (AI) is changing the way law is being practiced. One of the areas where AI, and more specifically Machine Learning (ML) has been making great strides recently is contract review. The progress is not even limited to reviewing contracts: automated contract generation, negotiation, e-signing and management are fast becoming a reality.

Using AI for contracts is the result of an ongoing evolution. Ever since lawyers started using word processors, they have tried to automate the process of creating contracts. Using advanced macros allowed them to turn word processors into act generators that used smart checklists to fill out templates and add or remove certain clauses. But now the available technology is sufficiently advanced to take it all a few steps further.

Some years ago, commercial lawyer Noory Bechor came to the realization that 80 percent of his work was spent reviewing contracts. As a lot of the work involved in reviewing contracts is fairly repetitive in nature, he figured the service could be done much cheaper, faster, and more accurately if it was done by a computer. So, in 2014, he started LawGeex, which probably was the first platform for automatized contract review. Users can upload a contract to LawGeex.com, and, within a reasonably short period of time (an hour on average), they receive a report that states which clauses do not meet common legal standards. The report also warns if any vital clauses could be missing, and where existing clauses might require further attention. All of this is done automatically, by algorithms.

By now, there are other players on the contract review market as well, and the technology is evolving further. At present, AI technology is able to scan contracts and decipher meaning behind the text, as well as identify problem areas that might require human intervention. This technology can scan millions of documents in a fraction of the time it would take humans (think ‘hours’ as opposed to ‘days’ or ‘weeks’). As a result, AI contract review has reached a point where it can already do 80% of the work a lawyer used to do. For the remaining 20%, it can, at present, not reach the level of skill and comprehension of a human attorney. AI contract review, therefore, focuses attorneys’ efforts on higher-level, nonstandard clauses and concerns, and away from more manual contract review obligations.

The progress made in Machine Learning algorithms means the usage of AI is not limited to contract review. Juro is a company that tries to automate the whole contracts workflow. It has developed an integrated workflow system that allows companies to save time on contracts through automated contract generation, negotiation, e-signing and management of contracts. For this, it relies on machine learning algorithms that try to understand the data within contracts and learn from it. This can be done, e.g., by analyzing all the contracts in a company’s ‘vault’ of historical contracts. Based on these contract analytics, Juro can also provide so-called ‘negotiation heatmaps,’ where customers can see at a glance which of their contract terms are being most hotly negotiated. Knowing what other customers have negotiated can help you (based on data) decide what the contract terms should be and what you should agree to in negotiations.

Another interesting evolution is the idea of ‘smart contracts’. Stephen Wolfram, the founder of Wolfram Alpha, believes contracts should be computable, and that a hybrid code/legalese language should be developed. One of the main advantages of such language would be that it would leave less room for ambiguity, especially when it comes to the implications of certain clauses. Computable contract language becomes more valuable to the legal sector, once we start using ‘smart contracts’ that are self-executing. There is also already some interesting work in this area, namely by Legalese.com based in Singapore. If law is going to be made computable then the world needs two things: lawyers who can code and a legal computer language that is an improvement on today’s legalese.

The next step would then be to move from ‘smart’ contracts to ‘intelligent’ contracts. Smart Contracts resemble computer code more than typical legal documents, relying on programing to create, facilitate, or execute contracts, with the contracts and conditions stored on a blockchain, or a distributed, relatively unhackable ledger. Intelligent contracts would not just be smart, but also rely on artificial intelligence (hence ‘intelligent’ contracts). In the words of Kevin Gidney, intelligent contracts would use an AI system that “is taught to continually and consistently recognize and extract key information from contracts, with active learning based on users’ responses, both positive and negative, to the extractions and predictions made”.

 

Sources:

The Law Practice of the Future – part 2

This is the second article in a two-part series that looks at the law practice of the future. It is largely based on the Law 2023 Study (www.law2023.org), which predicted seven evolutions law firms will undergo by 2023:

  • Technologies Will Enable Lawyers to Bill for Real Value
  • Firms Will Develop Offerings That Transcend Jurisdiction
  • Demand for Responsive Institutions Will Create New Markets for Accountability
  • Firms Will Tap New Talent and Enable New Pathways to Practice
  • Information Access/Transparency Will Push Firms to Seek Hyper-Specific Markets
  • Firms Will Launch R&D Departments to Create New Offerings
  • User/Anthropological Research Will Shape Client Experience of Legal Products

The first three were discussed in the first article. In this second article, we’ll focus on evolutions four to seven. Note that the original Law 2023 Study was published two years ago, and that more recent findings have been integrated into this article.

[Part 1 of this article can be found here].

Evolution 4: Firms Will Tap New Talent and Enable New Pathways to Practice

The study found that “all kinds of companies are coming to grips with how they will acquire the skills and abilities they need in a workforce of unprecedented demographic and cultural diversity. Many organizations are also faced with the challenge of rapidly developing capacities they never needed before. Law firms will need to figure out how to hire new kinds of minds and address ongoing value concerns from clients.”

This is one of the evolutions that is already clearly visible. Traditionally, law firms consisted of lawyers, assisted by some administrative aids. Larger firms could have paralegals, accountants and an IT department. Now, it is not uncommon to also find project managers, client service managers, programmers, business analyst, industry advisors, etc. in law firms.

Another new tendency is to find lawyers who no longer are ‘just lawyers.’ On the one hand, there are e.g. scientists, engineers and mathematicians who are switching to the legal sector, and combine their fields of expertise. On the other hand, we are witnessing the emergence of what some call the “T-shaped lawyer”. Traditionally, lawyers had a deep knowledge in one discipline or ‘vertical’ market, i.e. the Law. A T-shaped employee, however, has a wide breadth of knowledge across multiple disciplines that allow them to bring new and innovative ways of thinking to their job. Some Law Schools already offer a curriculum for T-shaped lawyers.

As a result, individuals with a deeper understanding of technology and data, as well as the law, are changing the way the law is done. We can find some examples of that in the fields where AI is being integrated into the law.

Millennials are also changing the legal workplace. They grew up in an ‘always online’ paradigm, where services are available 24/7. More flexibility is required because the work can be performed at any place and at any time. So, they approach their work differently, and that affects the way law firms operate:

  • They prefer to work independently
  • The prefer assignments that can be done from home
  • They don’t care much for the traditional meaning of “work/life balance”
  • They value constructive coaching/mentorship relationships
  • Leadership and professional development opportunities are important
  • They give back

In short, in the office of the future, the employee gets more freedom, but also more responsibility. Law firms that adopt more flexible work practices and pay structures will be best prepared to compete with other industries for the capable people needed to fill these new jobs.

Evolution 5: Information Access/Transparency Will Push Firms to Seek Hyper-Specific Markets

The study found that “clients will have much more access to objective information about the effectiveness of firms and individual lawyers. Public companies in particular will face increasing pressure to rely on firms with the best track records.”

Increased competition on the legal market already pushed law firms to explore niche markets and to build greater expertise in specific fields. What we are witnessing now is that clients get access to all kinds of extra information about law firms like their success rates and effectiveness. This will force law firms to “define and dominate niche markets in which they can credibly claim to be the best. As with other industries, changes to legal markets will increasingly be driven by organizations’ collective ability to produce disruptive innovations, in addition to individual lawyers’ skills and experience.” Which leads us to the next topic.

Evolution 6: Firms Will Launch R&D Departments to Create New Offerings

The study found that “the variety of demands on law firms will lead to a new diversity in the way legal solutions are conceived, packaged, sold and applied. Some of these novel legal products will immediately find vast markets; others could take years to catch on or turn out to be false leads.”

Technology is changing the way that law is being practiced. It is to be expected that law firms will start creating their own R&D departments, either to take the lead or to keep up with the pace in a certain field. These R&D departments may focus on products, services or methodologies, which respond not only in changes in technology on the market, but also to shifts in industry needs and client preferences.

Evolution 7: User/Anthropological Research Will Shape Client Experience of Legal Products

The study found that “a deeper understanding of users’ experience is increasingly becoming the driving force behind the offerings of all kinds of companies. Companies are using data and design to predict consumers’ desires, aiming to appear in their lives before they even know what they want.”

The role of the clients’ experience when dealing with the law firm is becoming an even more important aspect of great customer services than it was before. Just like online retail shops can keep track of what you and other people buy to give you recommendations, technologies are being developed to anticipate the clients’ future needs. This may lead to greater understanding of entire industries, which in turn will allow law firms to approach their clients with new opportunities instead of simply reacting to their problems.

Sources:

The Law Practice of the Future – part 1

Law firms are going through a phase of intense transformation. The way law practices are run has changed more in the last two decades than in the entire century before. One such change is that law firms largely have become corporate entities, and consequently are being run as such. Other changes are the result of the Internet and the emergence of new technologies. This has led to virtual practices, paperless offices, Artificial Intelligence assistants and even some robot lawyers. We work with digital devices, and we need to be aware of cybersecurity. On these devices, files and information are digitized, and as a result, evidence often is digital evidence, which in turn led to eDiscovery. Lawyers and clients find each other online, and interact through social media. Because of the cloud, traditional employment relationships are also disappearing. Most young people opt for self-employment and prefer to take assignments that can be performed at home. The need for a fixed workplace and fixed working hours seem to be obsolete.

These changes raise the question of what the future will hold for law practices. Will robots take the place of lawyers? Will offices disappear as everything moves to the cloud? How will the way lawyers work change? We will be looking at the law practice of the future in a two-part series, which is largely based on the Law 2023 Study (www.law2023.org). This study projected what a law firm will look like in 2023. For these two articles that information has been updated and complemented by more recent findings.

The Law 2023 Study predicts that law practices will evolve in seven ways:

  1. Technologies Will Enable Lawyers to Bill for Real Value
  2. Firms Will Develop Offerings That Transcend Jurisdiction
  3. Demand for Responsive Institutions Will Create New Markets for Accountability
  4. Firms Will Tap New Talent and Enable New Pathways to Practice
  5. Information Access/Transparency Will Push Firms to Seek Hyper-Specific Markets
  6. Firms Will Launch R&D Departments to Create New Offerings
  7. User/Anthropological Research Will Shape Client Experience of Legal Products

 

We will focus on the first three evolutions in the first part of this article, and the other four in the second part.

Evolution 1: Technologies Will Enable Lawyers to Bill for Real Value

The study found that “many lawyers are already experimenting with digital tools to enhance their practices. But the most powerful new technologies will likely be developed by innovators outside the traditional legal industry who are incentivized to offer basic legal services for radically lower costs.”

We are, in fact, already witnessing this with, e.g., the arrival of legal chat bots that offer legal assistance (often for free) with regard to parking tickets, damage to luggage claims, applying for refugee status, and even on divorce. A recent study found that approximately 23 % of the work lawyers do at present can be automated. Eager to seize that opportunity, there are dozens of startups that want to offer AI-driven services that offer very specific legal solutions.

It is perfectly possible that law firms will start integrating these new technologies in their offer. They would be wise to do so, as it will reduce their costs. And they may even start developing their own such tools (cf. evolution #6). But the main effect of these new technologies is that lawyers will have to start focusing on what brings real value to their clients. Often this will mean specializing in specific fields of expertise. Another effect of these new technologies is that they will lead to entirely new forms of practice, like computer-assisted law, that can only be pursued in this technological environment.

Evolution 2: Firms Will Develop Offerings That Transcend Jurisdiction

The study found that “as the pace of globalization quickens, the nature of jurisdiction will change. It’s not just that corporations and other institutions will need to navigate dozens or hundreds of sets of rules and regulations — they’ll also have a significantly greater need to choose among them. These clients will expect their counsel to keep up.”

Globalization creates a demand for global legal services, which creates new challenges and new opportunities. Proactive firms will develop methodologies and employ technologies to compare and assess how legal issues related to products or services are solved in different jurisdictions.

Evolution 3: Demand for Responsive Institutions Will Create New Markets for Accountability

The study found that “enabled by technology, citizens are demanding greater transparency and responsiveness from corporations, government and other institutions — which very frequently seem caught off-guard. In a world where a WikiLeaks is around every corner, institutions will need more than just good PR; they’ll need new tools to fortify their credibility and maintain public trust.”

Law firms who to tap into this new market must adhere to a ‘triple bottom line,’ evaluating their success using metrics beyond profits:

  1. Is your law firm the preferred place for the most profitable clients to do business?
  2. Is your law firm the preferred place for the most talented people to work?
  3. Is your law firm the preferred place where the most inspired leaders want to serve their communities and the larger world at hand?

Smart firms already understand how important the element of trust is to their long-term viability. This in turn creates a new market for lawyers who can help other institutions achieve transparency, accountability and responsiveness, by crafting the necessary policies and practices.

The demand for greater transparency and responsiveness will not only come from clients but also from the people who will work for the law firm: millennials prefer to work in companies that inspire, and that display a commitment to philanthropy and social responsibility. This ties in with evolution #4, which describes how law firms will tap in to new sources of talent. That will be one of the items discussed in part 2 of the article: The Law Practice of the Future – part 2.

Sources:

 

Lawyers and Tech Competency

Lawyers and technology often have a strenuous relationship, with many lawyers displaying a distinct reluctance to familiarizing themselves with new technologies. Still, tech competency not only provides a competitive edge, but, by now, for most lawyers it also has become an ethical requirement.

In the US, e.g., the American Bar Association’s House of Delegates formally approved a change to the Model Rules of Professional Conduct in August 2012. The new text makes it clear that lawyers have a duty to be competent not only in the law and its practice, but also in technology. Following this change, a lack in tech competency could lead to disciplinary action for misconduct.

The new text of Comment 8 to Model Rule 1.1, which pertains to competence, now states (emphasis added):

To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.

The rule requires lawyers to keep up with the wide range of technology that can be used in the delivery of their services. This means they must stay abreast of the potential risks and benefits associated with any technology they use. It applies, e.g., to Word processing software, email services, security, including safeguarding confidential information, and practice management tools. In some cases, it may even apply to e-discovery or metadata analysis. Casey Flaherty gives the example that a lawyer should probably know how to convert document to PDF, or at least know how to create a document that is completely ready to be converted. In another example, he mentions that a lawyer who is working on a contract with numbered clauses and delegates it to another lawyer should know how to use automatic numbering and cross-referencing.

The competence clause adopted by the American Bar Association is a model rule, which means it must be adopted in a state for it to apply there.  By now, 26 States have done so, and impose an ethical duty of legal tech competence.

As a model rule, each state can implement the rule as it sees fit. In Florida, e.g., this implies, as of 1 January 2017, that all lawyers as a part of their Continuing Legal Education, are required to spend a minimum of three hours over three years in an approved technology program. California, on the other hand, requires lawyers to have knowledge of e-discovery. Indeed, in an age when any court case can involve electronic evidence, every Californian attorney who steps foot in a courtroom has a basic duty of competence with regard to e-discovery.

The rule does not require lawyers to become a technology experts, as they can use the assistance of advisors who have the necessary knowledge. Florida’s competence rule, e.g., states that “… competent representation may involve a lawyer’s association with, or retention of, a non-lawyer advisor with established technological competence in the relevant field.”

Coming back to the example with regard to California and e-discovery, it means that a lawyer in California could face disciplinary action for not properly handling the e-discovery aspects of a case. Robert Ambrogi, in Above the Law, puts it as follows:

That is the key: You need to know enough about e-discovery to assess your own capability to handle the issues that may arise and, if you lack sufficient capability, you can effectively “contract out” your competence to someone else. That someone else could be another attorney in your firm, an outside attorney, a vendor or even your client, the opinion says, provided the person has the necessary expertise. (You cannot, however, contract out your duty to supervise the case and protect your client’s confidentiality.)

By now, two courts have already confirmed that tech competency is required for lawyers. One judge stated that “Professed technological incompetence is not an excuse for discovery misconduct.”

Because of the growing demand for tech-savvy lawyers, several Law School Deans are pushing to add tech to the curriculum. They generally agree that “law schools are a bit remiss in not offering more technology-based training to law students and that they should include legal technology training in the current law school curriculum. The roundtable concluded with the collective position that all law schools in the U.S. owe it to their student bodies to introduce technology-oriented topics into the curriculum in some form or fashion.”

 

Sources:

Tips for a successful law firm website

In a previous article on the new legal consumers, we learned that approximately one in three people in need of legal assistance finds their lawyer by researching them online. A good website plays a crucial role in that. So, what makes a website of a law firm successful? Here are some recommendations by the experts.

User experience

Website visitors are picky and demand a positive user experience, or they’ll just turn away. The following five items contribute to a positive user experience.

Quick load time: your pages should load fast. Research shows that most people are only willing to wait some seconds before they turn away, because they haven’t seen anything yet. Typically, mobile users are less patient than desktop users.

Mobile-friendly: with more mobile users than desktop users on the Internet, having a mobile-friendly website is a must.

Relevant imagery: visitors tend to prefer visually pleasing websites. It is, however, not enough to just have attractive imagery, it must be relevant.

Modern design: lawyers often make the mistake of going for a more conservative design. They forget that the website should appeal to their visitors, and the majority of them prefer modern designs.

Easy navigation: the website users want to find the information they are looking for fast. Easy navigation is therefore a must, too.

Four imperatives to convert prospects

One of the purposes of a website is to convert visitors into clients. In a previous article (on why social media matter), we pointed out that this typically works better if you turn your website visitors into content consumers first, and that social media can play a significant role in that. To convert visitors into content consumers and clients, the texts on your site must be client-focused. They must convey clarity, trust, relatability, and differentiation.

Clarity: lawyers tend to use sentences that are too long, and verbose. Your sentences should be short, clear and to the point.

Trust: what you tell about yourself must convince a potential client that they can trust you.

Relatability: people look to establish relationships with other people they can relate to. If your texts are distant or aloof, a prospective client will look somewhere else.

Differentiation: you have to stand out and explain what makes you different from other lawyers offering similar services.

Pages to include

Your website should include the following pages:

Services: describe the services you offer. Be precise.

Testimonials: prospective clients want to know who the other clients are that you helped, and what they think of you.

A personalized about us page offers an opportunity to profile yourself as relatable, trustworthy and as different from other firms.

A contact form with Captcha: you want people to be able to reach you, but at the same time, you want to keep spammers out.

A FAQ page often is a good idea. The most frequently asked questions usually have to do with how much it will cost. Provide information on how and how much you charge, and for what.

Because they are required by search engines, don’t forget to include a Privacy Policy, and a Disclaimer.

More and more online consumers give preference to websites that offer an online payment facility.

Finally, your website should have site maps for your visitors, as well as for the web crawlers that search engines use.

Recommended page elements

Usability experts recommend including the following elements in the pages:

The header of the pages should include the domain name, your logo, and your tagline (if you have one). Typically, the header will also include the top navigation, as well as the breadcrumb navigation (i.e. the ‘you are here: home > …’ section).

On your page, under the header, you typically want to present a slide show or image. On your home page, you then continue with crucial business information, some testimonials and reviews. Below that, you can list the main features. On other pages than your home page, you present the information that the page is for, and make sure you provide quality content.

At the bottom of the page, you put internal links to other pages on your site.

The footer of your page typically must contain your contact information with special emphasis on your location (people tend to look for a lawyer that lives nearby), and on a phone number. (Some experts recommend putting your phone number in the header). Your footer should also include your business hours, as well as your Social Media buttons.

 

Sources:

 

Some considerations when moving your law firm to the cloud

Statistics show that 38% of law firms in the US use cloud-based services. 53% does not, while the rest isn’t sure which of the services they use are cloud-based. The cloud services that are being used not only include cloud-based law firm management software, but also other services, like using the cloud for backups, or to share information with customers, etc.

In this article, we will focus on the pros and cons of cloud based law firm management software.

Advantages of using public cloud services

These are the main advantages of moving your law firm to the cloud.

Maximize Internet Security: when you host your own servers, and provide Internet access to them, security is a constant concern. It’s not obvious to always have the latest patches, a perfectly configured firewall, etc. Because it’s part of their core business, external cloud service providers are experts in secure provision. More likely than not, your data will be safer in the cloud.

Reliable Physical Security: Cloud service providers use data centres where a lot of attention is paid to physical security of the infrastructure. Typically, advanced security measures, like using biometrics, are in place to enter the premises.  The chances of losing data because your servers are (physically) stolen are virtually non-existent in the cloud.

Immediate Disaster Recovery: Cloud service providers have Disaster Recovery plans (and the necessary infrastructure) that can be implemented instantly, or on very short notice.

Predictable IT budgeting: when you use cloud-based services, your IT cost is far more predictable, as you typically pay a fixed subscription fee. Add to that, that in most cases, using cloud-based services is cheaper, because you need to invest far less in your hardware infrastructure!

Eliminating IT Distraction and Hassle: keeping your own IT infrastructure up and running can be time consuming. If you use cloud based services, that hassle largely becomes the concern of the service provider.

Inherent Remote Access: the cloud offers constant access, from anywhere, at any time.

Experienced Law Firm Cloud Services: most providers of cloud-based services for lawyers have been on the market for a long time, and have plenty of experience.

Innovation comes as standard with the public cloud: one of the challenges when managing your own IT infrastructure is knowing when to upgrade and when to implement new technologies. When using cloud-based services, you’re staying ahead of the curve, without having to worry whether the technology will cause any problems. Your provider will have tested them out in advance.

Flexibility provides a business advantage: the cloud can provide a law firm with extra flexibility which can be a business advantage.

A survey revealed the following reasons why law firms chose to move their business to the cloud:

  • Easy browser access from anywhere, 68%.
  • 24 x 7 availability, 67%.
  • Low cost of entry and predictable monthly expense, 59%.
  • Quick to get up and running, 49%.
  • Robust data back-up and recovery, 47%.
  • Eliminates IT & software management requirements, 40%.
  • Better security than I can provide in-office, 32%.

Caveats

But there are also some caveats that should be taken into account. When you are using cloud services, not only your IT infrastructure, but also all your data are in the hands of a third party. And you necessarily rely on Internet access to have access to your data. Law firm management software typically is mission critical for a law firm. If your access is interrupted, or if the critical systems that are in the cloud fail, this could cause serious problems, even put a law firm out of business. There also are concerns of privacy and lawyer-client confidentiality: does the staff of the service provider have access to your clients’ data? Security typically is better in the cloud, but a breach typically also has bigger consequences, and service providers for lawyers are preferred targets for hackers. Continuity also is a concern: what happens to your data if the service provider goes out of business, e.g.?

In his article on cloud computing for lawyers, David Canton listed the following issues to consider:

  • how mission critical the system is
  • what the consequences are of a short term and long term outage
  • how confidential or personal the information is in the system
  • can the information be encrypted in transit and at rest
  • how robust the vendor’s continuity plan is
  • the need for the business to have its own continuity plan – such as a local copy of the data
  • how robust the vendor’s security is
  • does the vendor have third party security validation to accepted standards
  • does the vendor’s agreement have provisions that back these issues up with contractual terms and service levels with meaningful remedies

Because of these consideration, there are law firms who explicitly choose to not use the cloud. When questioned, these were the reasons they gave to stay away from cloud services:

  • Confidentiality/security concerns, 63%.
  • Concerns of having less control of your data because it’s hosted by the provider, not on your own server/computer, 54%.
  • Unfamiliarity with the technology, 50%.
  • Concerns of losing access to and ownership of your data, 39%.
  • Cost/effort of switching from your current solution, 31%.
  • Cost of services, 28%.
  • Preference for owning software rather than paying a monthly subscription, 25%.
  • Non-web-based software programs you use are sufficient for current needs, 24%.
  • Lack of professional responsibility/ethics guidance, 24%.
  • Uncertainty over longevity of vendor, 20%.

 

Sources:

Artificial Intelligence and Law

Legal Artificial Intelligence has made the news’ headlines often, recently. There are chat bots, e.g., that help you appeal against a parking ticket (www.donotpay.co.uk), or give you a first advice if you are considering a divorce (divorce bot). There is software that predicts the likely outcome of court cases. IBM offers legal AI services for eDiscovery and legal research with its Watson supercomputer: Ross, as the service is called, uses Natural Language Processing, and can also be used for cognitive computing, e.g., to review contracts (www.rossintelligence.com). Then there is RPA (Robotics Process Automation) who are creating software robots for law firms. The idea is that any repetitive task that lawyers and paralegals do at a computer can be performed by a software robot. These are two examples of AI doing the work that is often done by paralegals and lawyers.

So, what is the current state of affairs? What is being used and developed within law firms, and what do service providers have to offer when it comes to artificial intelligence for lawyers? Basically, there are three main pillars, where AI is currently being used:

  • Research and Data Analysis: Legal Research, eDiscovery, triage services for those two, predictive systems, other analytics (statistics, correlations, etc.),
  • Cognitive systems: expert systems, contract review
  • Task automation: bots (advice, automate repetitive tasks)

Let us explore these a bit further.

Legal Research: Looking for legal information that is relevant to a case you’re handling? Legal databases are increasingly using AI to present you with the relevant laws, statutes, case law, etc.

eDiscovery: While legal research deals with legal information, eDiscovery focuses on finding evidence that is stored in a digital format. More and more evidence is stored electronically, on computers, smart phones, but also in the cloud (think, e.g., of social media). The task of finding evidence that is pertinent to a case more and more becomes like looking for a needle in a haystack. No wonder that AI is increasingly being used to assist in eDiscovery.

Triage services: So, you have used programs for legal research and eDiscovery. Often that is just the first round, i.e. finding relevant information. If you’re confronted with thousands of results, you need a second round, which is the triage: determining what is most relevant and sorting the results accordingly. Triage services are often built into the software you are using, but are also being offered by independent third party service providers.

Predictive systems: A previous article was dedicated to a software system that could accurately predict the outcome of court cases dealing with Human Rights. It was right in 79% of the cases. Several service providers have announced similar products for other areas of law. But predictive systems are not limited to case outcome predictions. US data scientists have, e.g., developed a new algorithmic analysis they believe could help judges reduce crime by up to 25% in certain situations. The software performs a risk assessment and advises a judge whether a defendant awaiting their court date for an alleged crime should or should not be released to go home before the trial starts.

Other analytics: Machine learning and data mining is also used to provide us with (other) statistics, relevant correlations, etc.

Expert systems: The first cognitive systems already were developed in the 90s. Expert systems are intelligent checklists that have the built-in ability to reason, i.e., perform logical operations and functions.

Contract review: One area where cognitive systems are shining at present is contract review. Important, e.g., is the ability to point out clauses that are lacking in a contract.

Task automation: Bots are intelligent software robots that are created to automate specific tasks. In the introduction of this article, we gave the examples of chat bots that can give advice, and other bots that are being designed to perform any task a lawyer or paralegal does repetitively on a computer.

What does this all mean for lawyers? Richard Tromans, at www.artificiallawyer.com, sums it up perfectly:  ” … the arrival of AI marks a Renaissance for the legal industry because it permits lawyers to be real lawyers again and not tired process units counting down the hours of their day. After all, isn’t the definition of a lawyer a person who is doing something special in society, i.e. taking on a client’s problems and making it their duty to help them? Isn’t that why membership of the profession is so jealously guarded and so heavily regulated? If this is just any other office job, then why all the fuss to become a lawyer? But of course, it’s not just any other office job. In which case, maybe AI is the best thing that has happened to lawyers in many decades.”

Sources

Social Media for Lawyers: an Introduction

In a previous article, we explained why social media matter for lawyers. Lawyers have been slow adopters when it comes to social media, but by now, a clear majority of them have caught on. In the US, 76% of lawyers use social media for professional purposes, and 74% of US law firms are present on Social Media.

What are they using social media for? According to a recently published report, lawyers use social media for several reasons, including career development and networking (73%), client development (51%), but also for education and current awareness (35%), and for case research and investigation (21%).

When it comes to who uses what, the available statistics are not consistent when it comes to the actual numbers, so we’ll use approximations below. The published statistics, however, do all agree on the ranking.

  1. LinkedIn is the most popular network, with approximately two out of three of law firms reporting a presence on LinkedIn. It is the medium of preference for large law firms.
  2. Facebook comes in second place, with, depending on the published data, one third to about half of the law firms saying they have a professional Facebook page. (Up to 90% of lawyers are on Facebook in a private capacity).
  3. Twitter is third in the rankings, with approximately one quarter of firms using it. Of the four main social media, it is the one that is most used for research and current awareness.
  4. Google Plus comes in last, with 10% of firms reporting a Google Plus presence.

LinkedIn

LinkedIn is the oldest network, and was launched in 2003. It is intended for professional networking. It was the first, and still is the largest “business social network”, meaning that is meant for professionals.

Because LinkedIn’s main goal is professional networking, most lawyers feel comfortable using it. One report states that, in the US, 91% of firms of 100 or more attorneys have a presence in LinkedIn. They are followed by 85% of solo practitioners, 76% of mid-sized firms with 10 to 49 lawyers, and 63% of smaller firms with 2 to 9 lawyers.

On LinkedIn, you can create a profile, which reads like a professional résumé. You can add contacts to build a network of connections. There are sections for skills & endorsements. You can create pages (like a mini website). You can publish a blog and/or articles. You can set up groups where you can have discussions.

LinkedIn comes in a free and a Pro version.

Facebook

Facebook was founded in 2004, and has been open to public at large since 2006. It is the largest social media network: in the fourth quarter of 2016, it had 1.8 billion active monthly users.

On Facebook, as an individual you can create a personal profile, which is not the case for legal entities. Most law firms therefore create ‘Pages’, which are like a mini website on Facebook. Pages can be ‘liked’, and you can invite people to do so. It is also possible to create ‘Groups’ on Facebook, to which you can add people to interact with. Both pages and groups can have posts; you also can add videos, and photos or images, etc.

Interestingly, the most active lawyers on Facebook for professional purposes are solos at 48%, followed by 41% of lawyers from small firms (2-9 attorneys). Mid-sized firms with 10-49 lawyers were next at 22%, with lawyers at firms with 100 or more lawyers coming in last, at only 16%.

Membership of Facebook is free.

Twitter

Twitter was launched in 2006, and is one of the ten most used sites in the world. It is often called the SMS of the Internet. It is an online news and social networking service where users post and interact with messages, which are called “tweets.” Tweets are restricted to 140 characters, and, as a rule, can be read by everyone (unless you make them private).

When you sign up to Twitter, you can choose to ‘follow’ other people, which means their tweets will appear in your (news) feed. The idea is to create your own followers who then get your tweets on their feed.

The strength of Twitter, however, lies in the use of so-called hashtags which allow to perform fast searches. A hashtag is a keyword or expression (without spaces!) which are preceded by a #-sign. Using the correct hashtags will make it easy for people who are not followers to find your tweets. If, e.g., you wrote an article on divorce, you could use #divorce and #lawyer as keywords when announcing your article on Twitter.

The largest pool of lawyers using Twitter can be found in mid-sized firms, with 26% maintaining a Twitter account, followed by 25% of solos, 25% of large firm lawyers, and 24% of small firm lawyers.

Membership of Twitter is free.

Google+

Google Plus is an interest-based social network that is owned and operated by Google. It was launched in 2011, as Google’s response to Facebook. Its functionality is fairly similar to that of Facebook: you can have pages and groups, where you can make posts, upload videos (YouTube) and photos, etc.

Membership of Google+ is free.

Other Social Media

Apart from the social media mentioned above, lawyers also use Instagram, YouTube and Pinterest, mainly to share images and videos.

Instagram is an online mobile photo-sharing site that allows its users to share pictures and videos either publicly or privately on the app, as well as through a variety of other social networking platforms. It was launched in 2010, and acquired by Facebook I 2013. Membership is free.

YouTube is a video-sharing site. It was started in 2005, and bought by Google in 2006. It comes in a free and paid version.

Pinterest is a photo-sharing website where you can organize them in virtual pinboards. Its CEO Ben Silbermann summarized the company as a “catalog of ideas,” rather than as a social network. It was launched in 2010.

 

Sources

The Death of the Billable Hour

In recent weeks, several articles have been published that proclaimed the death of the billable hour. One author declared that he could confidently state that the “traditional” hourly billing is dead. Another even wrote a eulogy. Most of these articles refer to the 2017 Report on the State of the Legal Market, released on 12 January 2017 by Georgetown Law’s Center for the Study of the Legal Profession and Thomson Reuters Legal Executive Institute.

The publication of the report was accompanied by a press release that stated: “The billable hour model of decades past where law firms experienced little pushback on rates or number of hours spent is effectively dead, and the traditional law firm franchise is increasingly at risk after a decade of stagnant demand for law firm services.

In a comment on the report, the American Bar Association (ABA) Journal observed that “largely because of budgets and caps imposed by clients, 80 to 90 percent of law firm work is done outside of the traditional billable hour model, according to the 2017 Report on the State of the Legal Market.

The report itself explicitly says: “One of the most potentially significant, though rarely acknowledged, changes of the past decade has been the effective death of the traditional billable hour pricing model in most law firms, (…) Plainly, the imposition of budget discipline on law firm matters forces firms to a very different pricing model than the traditional approach of simply recording time and passing the associated ‘costs’ through to the client on a billable-hour basis.

The report found that the death of the traditional billable hour is due to the rise in so called “Alternative Fee Arrangements” (AFAs). The most common alternative fee arrangement, good for 65-70% of revenue in law firms, are capped fees, which means that cases are allocated a specific budget. Other alternative fee arrangements are being used, too, but amount to only 15-20% of revenues. Combined, this means that the alternative fee arrangements may well account for 80-90% of all revenues.

So, what are the alternative fee arrangements that are being used?

  1. Capped Fees: under a capped fee agreement, the client pays on an hourly basis, but the law firm agrees that the total bill will not exceed the capped amount. A cap is often accompanied by a minimum fee, which together are sometimes referred to as a “collared fee” agreement.
  2. Flat Fees / Fixed Price: the firm agrees to represent the client in exchange for a specified fee, i.e. at a fixed price, regardless of the number of billable hours. Because it can sometimes be hard to predict how a case will go, sometimes variations on the flat fee are used where parties agree, e.g., to a flat fee per stage, etc. Sometimes flat fees are combined with performance bonuses, where the law firm can charge an extra amount if the case is won, e.g.
  3. Contingency / “no cure, no pay”: in a contingency agreement, the law firm only gets paid if it wins the case. (Contingency agreements are illegal in some countries, like, e.g., Belgium).
  4. Holdback: traditionally, a holdback is a sum of money that remains unpaid until certain conditions are met. As an alternative fee arrangement, the law firm and its client agree on percentages of billable hours, where what is actually paid is determined by different criteria the parties set. (E.g., if the case is lost, only 75% of the fees will be paid).
  5. Blended Fees: with blended fees, the client pays the law firm a specified hourly rate, regardless of the individual lawyers’ hourly rates. This incentivizes the firm to appropriately delegate to less expensive attorneys rather than have its more expensive attorneys working at substantially reduced rates.
  6. Cost-plus model: the cost-plus model means that the client reimburses the costs the law firm makes, in addition to a reasonable profit.
  7. Subscription model: in a subscription model, the client pays the law firm a recurring fee to take care of all its legal business.

 

Sources:

 

Legal Technology Trends for 2017

It is common, at the beginning of the year, to ponder upon what the year ahead will bring. Several experts have published their predictions for trends we can expect in legal technology, in 2017. So, what are they saying? Generally speaking, they expect lawyers to become more mobile, more collaborative (using the cloud do to do), and more responsive (using social media to engage with clients and potential clients). 2017 is also expected to see a rise in the usage of AI (Artificial Intelligence), and to be the year that E-Discovery goes mainstream. Cybercrime & Cyberwarfare, too, will remain in the news.

Let’s have a closer look at these items.

More Mobile

In 2016, for the first time worldwide, we saw more mobile devices being used online than desktops. This trend is expected to continue. More lawyers will start using mobile apps. They also will start accommodating their mobile clients – and potential clients – more. (We recently published two articles on the subject, where you can find more information).

Cloud

2017 will see a further increase in cloud usage. The could will play an increasingly important role in collaboration between lawyers. Bigger law firms are expected to start using big data analytics. The cloud will also play a significant role in the further development of AI and E-Discovery (see below).

Cybersecurity

Cybercrime will continue to rise, and will continue to become more and more sophisticated. AI will increasingly be used in cyber-protection, as well as in attacks. Experts also expect an increase in cyberwarfare.

Social Media – Business Social

More lawyers will start embracing social media, and as a result they will become more responsive, i.e. engage more with clients and potential clients. More specifically, for lawyers, an increase is expected in the usage of professional or business social media. Some experts foresee an important role for new players (service providers) on this market.

AI

In 2017, AI will continue its rise, and become more omnipresent. The main focus of artificial intelligence in legal tech will remain on Machine Learning. More specifically, AI will continue to push legal technology in the fields of Legal Research (with, e.g., virtual Legal Research assistants), Contract Review, Security, and E-Discovery (see further). One expert also expects AI to be introduced in legal practice management, as well as legal project management, which, in turn could lead to significant advances being made in those fields.

E-Discovery

Last, but not least, 2017 is the year E-discovery is expected to go mainstream. E-Discovery, also spelled eDiscovery, stands for electronic discovery. It refers to the discovery of relevant information in legal proceedings – such as litigation, government investigations, or Freedom of Information Act requests – where the information that is being analyzed is stored in an electronic format. Think, e.g., about the recent example of the FBI analyzing tens of thousands of emails that were leaked by WikiLeaks, in just four days. As more and more information is being stored electronically, E-Discovery is becoming more and more important. In 2017, it is expected to go mainstream.

Experts predict the following trends for E-Discovery in 2017:

  • The increase in social media usage implies that E-Discovery will have to be able to incorporate the analysis of social media information as well.
  • The Internet of Things will also have a serious impact on E-Discovery, as it will have to learn to process the data that are produced by billions of devices. In the US, e.g., there is a murder case where Amazon is asked to give access to the data one of its digital Echo devices (virtual assistants) may have recorded as evidence.
  • Because of these two developments (social media & Internet of Things), data privacy is becoming more important than ever.
  • Machine Learning is expected to become the most important technology for E-Discovery.
  • Cross-border compliance will continue shaping E-Discovery: multinationals, e.g., must comply with laws in several countries. This has implications on what can be stored where, which in turn has its effects on E-Discovery.

 

Sources