Artificial Intelligence in the Legal Industry

Much like any successful business, there is no arguing the importance of the bottom line to a law firm. Without profit, there is no legal practice. According to Clio's Legal Trends Report [PDF], the "majority of law firms see their bottom line as the most important metric for success," with 84 percent of legal professionals polled, indicating that increasing revenue is a must. The report also revealed that while lawyers are focused on their profitability, clients were concerned about cost and value.

There is a vast amount of work that goes into practising law. With only so many hours in a day, many law firms are faced with a business growth dilemma. According to Clio, 77 percent of firms would prefer to hire more staff, even though 58 percent want to reduce spending. "For the majority of firms, finding ways to streamline and automate non-billable administrative tasks will help make every member of a firm more productive," the Clio report states.

Artificial intelligence and Robo Lawyers

Sparking concerns of courtroom Terminators, Artificial intelligence (AI) has made its way into the legal profession. AI "Robo Lawyers" can quickly process analytics, crunch big data, and supply cloud computing tools to enhance profitability. Emerging productivity apps threaten to replace tasks typically done by paralegals - freeing lawyers to focus on their profession's more important and exciting aspects. How far it can take the industry remains to be seen, but there are increasingly disruptive technologies surfacing. The DoNotPay app claims to be the home of the world's first literal robot lawyer to help the average citizen fight corporations, beat bureaucracy and sue anyone at the press of a button. 

A quick overview of AI

Technology has made tremendous strides in a relatively short time. Artificial intelligence has been around since the mid-1950s and is often referred to as a human intelligence simulation. Simply put, it is a science intended to replicate human intelligence with computers.

It has become commonplace in our everyday lives through such applications as spam filters, search engines and self-driving cars. If you asked your smartphone to find the nearest coffee shop today, you interacted with artificial intelligence.

AI uses machines [computers] to mimic cognitive functions such as learning or problem-solving. It works by combining large amounts of data with algorithms and iterative intelligence, which allows the software to learn from patterns.

The Harvard Journal of Law & Technology (JOLT) breaks it down further, stating "machine learning" as an AI application where computers use algorithms embodied in software to learn from data and adapt with experience. Meanwhile, a "neural network" is a computer that classifies information then places that information into "buckets" based on their characteristics.

To further the neural network bucket analogy, Google relates "entities" to answering user questions, as noted in a patent granted in 2016. Here, Google's machine learning technology uses the concept by interfacing search queries with answers at an online advertising and search engine level.

Greatlearning Academy describes AI as:

  • An intelligent entity created by humans.
  • Capable of performing tasks intelligently without being explicitly instructed.
  • Capable of thinking and acting rationally and humanely.

Among the advantages, Greatlearning notes AI can reduce human error, is available 24/7, does repetitive work quickly while making rational decisions, and improves security and efficient communication. On the downside, artificial intelligence is highly dependent on machines, requires supervision, can lead to a dearth in talent, has the potential for misuse and may lack software development standards.

What AI can offer the legal profession

The law is rooted in legislation, precedent, statutes and codes, which are essential to lawyers' strategies and decisions. The vast amount of legal information passed down over time is the lifeblood of the profession, with more rulings and amendments coming each day.

CIORevew notes that the tremendous volume of data has led to a rise in private publications offering summaries in easier to digest formats and analysis by legal experts, which can help lawyers expedite their research.

It has been estimated that almost a quarter of the work performed by lawyers can be automated by existing technology. Once a lawyer could expect to spend hours digesting legal documents. Now, AI can do it in a fraction of the time while eliminating human error.

Software powered by AI can also be applied in other aspects of the law. For example, companies such as Lex Machina claim their tools can anticipate how courts will rule in a given case. According to Fortune magazine, the process involves asking the software to assess several factors such as venue "which in turn affects a party's choice whether to litigate or settle."

Of course, the question is whether lawyers are ready to put their client's fate in the hands of algorithms.

So, what does the future hold? According to JOLT, "a consensus has emerged that AI will significantly disrupt the legal market. AI will impact the availability of legal sector jobs, the business models of many law firms, and how in-house counsel leverage technology." Only time will tell.

In Part Two, we examine how AI is driving change in the legal industry.

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