Hasta la vista baby – the termination of the legal profession

13 10 2011

Later this week I’m running a session for a group of leading technology lawyers which will explore the future of the profession.

Withington & Co's new M&A lawyer was a force to be reckoned with

Why I think this will be particularly interesting topic for this group is that I believe technology will be the  single biggest driver of change  for the legal sector in the long term.

Sure, globalisation, outsourcing, commoditisation, changing procurement patterns are all shaping the market now, but technology has the potential to change it to a much greater degree.

Here’s why.

There are a number of technology trends that have already influenced the profession to a greater or lesser degree:

  • The Internet has enhanced communication speed and accessibility which has fundamentally changed client service expectations and the response times in the market
  • The vast amount of electronic information available has made search and retrieval a vastly different affair to that of twenty years ago, when a trip to the law library and a long afternoon was required to get oven an overview of the latest law in an area
  • Collaboration software is allowing the process of working with internal stakeholders and external parties to become more efficient (not least by reducing the number of times documents are passed backwards and forwards)
  • The sharing of information between law firm clients has become far more widespread (intensified by social media) so that emerging client buying patterns such as the rejection of hourly billing become more adopted more quickly
  • Technology supports the standardisation of work – with more and more firms focussing on efficiency and improving process, tools like workflow software can support and enhance changes to the way lawyers work
  • The automation of low complexity work, most visible in the consumer space (think automated wills online), is also beginning to see wider adoption in the B2B space as more complex work gets disaggregated and the low complexity components get packaged up and automated (standard due diligence report anyone?)

However, to my mind, this is really only playing on the edges of what’s possible.

Where I’m really interested is the area of law where lawyers believe they add most value. The high-end, complex work. The work that NEEDS a specialist. A true expert.

Lets go right to the “business end” of the legal value chain.

Think about the legal sector and what it actually does.

Law is made (the government legislates, courts decide a case etc). This law is recorded and at a high level interpreted (often by academics and other commentators). The combination of these two steps provides a shared view of generally what the law is.

By and large, and the moment the value here is really only accessible to legal practitioners – the public  can get access to certain statutes and cases for free online, but the public’s ability to understand what they mean remains limited – although this is beginning to change.

The next step is to turn this information into a broad set of tools (largely documents – agreements, policies and other commercial instruments) and for the lawyer to use these tools and his or her understanding of the law to interpret the high level meaning and apply it to a particular set of facts, and in doing so create some further value for which the client will pay.

S0mewhat simplistic, but in very basic terms, the majority of the value that the market will pay for is in this interpretation and application of the law to increasingly complex situations. There are other factors that drive value such as the scale and risk involved, but generally speaking, more complex work means higher fees.

Looking a bit more closely at what lawyers actually do in this high value phase, in the vast majority of cases it will take  two forms – advising and creating documents. We already know that technology is starting to shape document creation (have a look at Epoq, Rocket Lawyer, legal Zoom and LexisNexis if you don’t believe me), but surely (SURELY) technology couldn’t actually start to creep into advising clients?

Could it?

This is the skill honed over years of hard-earned experience. The ability to steeple fingers, sit back in chair and let the cogs turn. To casually drop a Latin phrase into an argument. Those uniquely human abilities to find meaning and similarities between cases and facts. To both synthesise, analyse and structure highly complex information.

The skill that requires (in the UK) a three year law degree, a year of practical training, a two year stint of on-the job training, before the brightest and best graduates can call themselves qualified and enter the profession fully to “start” their career and their real learning.

Surely not.

Think about this, from a BBC article on the impact of technology in the City:

Trading floors were once the preserve of adrenalin-fuelled dealers aggressively executing the orders of brokers who relied on research, experience and gut instinct to decide where best to invest.

Long ago computers made dealers redundant, yet brokers and their ilk have remained the masters of the investment universe, free to buy and sell wherever they see fit.

But the last bastion of the old order is now under threat.

Investment decisions are no longer being made by financiers, but increasingly by PhD mathematicians and the immensely complex computer programs they devise.”

While there are many differences between this activity and the legal profession, there are also plenty of similarities.

Once you start really looking at what lawyers do, and begin to grasp what technology is already capable of, a real threat to the profession as we know it doesn’t seem so far fetched.

Entity recognition (understanding, finding and cross-referencing individuals and organisations in documents) is already well established, and software like Autonomy (“the leader in meaning based computing”) can do magical things in terms of identifying relationships between “things” and deriving meaning from raw information (think “facts”).

Look at recent developments in ediscovery and contract management software, and have a read of Jason Wilson’s great post on lawyers “I am now an app” for lawyers, and of course, whether you agree with him or not, do revisit Susskind’s work .

For me, rather than the commentary in the area, what makes me really believe big change is coming, is what I hear and see when I talk to some of the leading technology thinkers in this area.

To hear them describe the law by talking about decision trees and statistical probability (based on historic data and future trends), to hear them explaining rules engines, logic and information structures, really makes me pause for thought.

It’s a different language, but with the same objective of solving problems and creating value for clients.

This type of technology promises paradigm shift in speed, accuracy and cost reduction that goes far beyond what an LPO could offer with a human based process.

Of course it’s not that simple. Apart from the very real time, effort and money required to build the technology, aside from the judgment required to apply the law, there is of course a truly human element in providing legal service (that word is a clue). This service wrapper is likely to keep large chunks of the profession safe for a while, and of course as one work type is automated, the opportunity for the profession is to find a new, higher value area of law to explore.

My (human!) instinct is that it will be lawyers who first use these new generation of tools first, to provide faster, better services to their clients, rather than clients using them directly to replace lawyers.

The lawyers may be at traditional law firms (large or smaller niche players) or LPO or other volume providers. Either way the early adopters will become the Terminators, the firms that resist will be Sarah Connor.

Seems far fetched?

My belief is that the fundamental changes now facing the profession are only the beginning of the beginning, and that technology will shape the end game far more than any of us can probably predict.


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16 responses

13 10 2011
legalba

Excellent post and I think it’s completely beyond almost all lawyers’ comprehension that this could happen. Spooky that I posted on this exact subject (or at least one specific example) just yesterday! http://bit.ly/p2KY5w

13 10 2011
Julian Summerhayes (@Ju_Summerhayes)

Mark

A nice piece (as always).

The difficulty in trying to postulate a position is that law is so diverse, it is almost impossible to see how technology can have universal application.

I am sure there will many algorithms devised that will be able to answer, statistically or otherwise, the interpretation of the law, an analysis of the risk and likely costs, but I don’t think, in my time, you will see this process putting down deep roots. It will probably remain confined to a number of narrow areas.

The interesting point about the law, as revealed by the dissenting voices of the House of Lords and now the Supreme Court, is that certain areas of do not evince of a clean and simple answer: Human Rights, Incorporeal Rights and the duty of care, so that it will be a long time before we see a computer programme available to solve the all the problems.

In terms of the driver for change, I am not clear what that will be? Cost, efficiency or reliability? If you think law is exposed then what about medicine? Self-diagnoses which is eminently more doable with the advent of the Internet does not mean people giving up on the NHS.

Good luck with the talk but I am prepared to be called old fashioned on this one, even though I would not set my face completely against the thrust of your post.

Regards
Julian

13 10 2011
legalba

PS: my first degree was in engineering, and for my thesis I had to use neural networks (artificial intelligence) to build an artificial nose. My second degree was in computing, and my thesis was on modelling probabilistic decisions using Baysian decision trees. I couldn’t do what’s described above, but I know it’s possible!

As William Gibson said: the future is already here, it’s just unevenly distributed.

13 10 2011
Jeremy Hopkins

Thanks, Mark, for a really interesting and thought-provoking post. I agree with much of it in that I think the effects of technology will permeate the business of legal service provision some way beyond the more obvious target areas of high volume “commiditisable” law.

However, when we are talking about the high-end, complex, specialist legal work we are moving into the realms of infinitely variable factors which are likely to test technology to its limit. But more importantly, beyond this, whatever area of law we are talking about we are looking at drafting or advising ultimately with a view to how a court would interpret something (whether working in litigation or for the prevention of it).

So, as long as judges remain human (yes, room for debate there …) you are going to need humans to exercise expert judgment as to how law is going to be applied by a court. An algorithmic substitute for this is, to my mind, beyond the scope of even the wildest imagination.

13 10 2011
Nigel Henry

There is still space for humans, there are a couple of typos here

13 10 2011
Intelligent Challenge

The typos were deliberate. Just to prove I’m not a cyborg :-)

14 10 2011
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14 10 2011
Legal 2.0 (@legaltwo)

Interesting post Mark.

Couple of insights…

I do not see the drive for change coming from lawyers. Mainly because there is a bad cultural fit. Sure there are some lawyers who may be tech savvy but there are way more who are not. There is little or no appetite for change or innovation as well as a sense that lawyers ‘own the road.’ This last thing is a classic symptom of the fear:ignorance:arrogance culture that has done for so many embedded suppliers e.g. HMV, Borders etc.

If we take a look around us the driver for change is less and less the supplier and more and more the user. There is little incentive for law firms to change because there is no real pain from alternative suppliers, yet. This is why I think brands will drive the change, they will ‘squeeze’ the failings of law firms, when law firms should be using tech to ‘separate’ or unbundle process and intellect.

Look what a brand will say…

clarity on price
transparency of service
fixed pricing
plain English etc

All with zero legacy.

What this means is that brands will educate out of the system many many law firms who could have competed but didn’t bother to listen etc (ignorance:arrogance). Law firms will have to adapt to a more educated market.Its an old argument, why are brands products so cheap v why are law firms so expensive. Sure there is a measure for that, but a lot of that law firm cost is inefficient process. Hello technology.

There will be an argument that law firm clients are not brand clients. I would say, we transact about 70,000 services a year and our user demographic is ABSOLUTELY a law firm client type.

The other killer will be the belief that big law cannot be touched that technology is not available at that level. I always find it ironic that the people who say it can’t be done have never experienced the tech to see what can be done. We are developing and testing stuff that is 2-3 years away. Stuff that is live now we were developing 2-3 years ago. That’s why we are pretty excited. Collaboration is going to be a massive thing with online legal if you want some advanced insight.

Of course as you point out initially there will be snapping at the bottom of the pile, lets call it “automated wills online” but it won’t stop there and as brands and law firms snap at that level that will cause a knock on effect. Solo will chase small high st, who will chase provincial, who will chase national…and all because tech did two things. It reduced cost and increased efficiency.

You mention advice. This is all a lawyer has. What is in their head. But as long as they are burdened by medieval processing rather than tech savvy that high value intellect will always be burdened.

Jon

14 10 2011
James F. Ring

As the article suggests, readers interested in the impact of technology on the legal profession need to “think about the legal sector and what it actually does.” Most high-end legal services consist, in whole or in part, of assisting clients involved in what boils down to a bargaining process, either overt bargaining (of the kind that is, in the UK, normally facilitated by solicitors), or tacit bargaining (which is normally carried out by barristers in the UK and by litigators in the US, where all but a tiny percentage of cases ultimately settle via bargaining). Sophisticated consumers of legal services and innovative lawyers are already using disruptive technology – game theoretic bargaining mechanisms – to dispense with the forms of bargaining that have historically formed the core of legal work, radically increasing the efficiency of negotiations and wiping out years of costly litigation (see, e.g., the mechanisms that can be accessed and used at http://www.fairoutcomes.com). Recent academic studies confirm that the procedures embodied in these sorts of mechanisms substantially improve upon the various forms of overt and tacit bargaining traditionally engaged in by senior lawyers.

I agree that much of what is routinely characterized as “innovative legal tech” (such as e-discovery and document preparation software) simply automates relatively low-end tasks and has been substantially over-hyped. However, senior lawyers and commentators who believe that technology will, for the foreseeable future, simply continue to automate tasks traditionally preformed by junior lawyers are, I would respectfully suggest, either not up-to-speed or are simply whistling in the dark.

15 10 2011
James F. Ring

Studies suggest that, at least in the U.S., where the vast majority of legal disputes are resolved by tacit and overt bargaining rather than trial, technology that facilitated an objective determination of what a court might consider to be a reasonable outcome would not be nearly as useful as would a device that allowed a party to figure out what its adversary might ultimately be willing to accept under duress. See, e.g., Korobkin, Russell B. and Doherty, Joseph W., “Who Wins in Settlement Negotiations?” (July 1, 2007). 2nd Annual Conference on Empirical Legal Studies Paper. Available online at SSRN: http://ssrn.com/abstract=998095. I agree with the suggestion in the article that, in order to understand what services technology might usefully provide in the legal field, one needs to “think about the legal sector and what it actually does.” Perhaps what would be most useful – at least in terms of facilitating the resolution of legal disputes in the U.S. – would be some modern, high-tech versions of devices such as the rack, the Spanish donkey, and the intestinal crank.

17 10 2011
Our Pleasure to Serve You: More Lawyers Look to Social Networking Sites to Notify Defendants – Magazine – ABA Journal — Dallas Process Server

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17 10 2011
Legal 2.0 (@legaltwo)

I agree that understanding ‘the legal process’ is key. I don’t think any technologist is remotely suggesting that software can replace dispute, discussion, negotiation, bargaining or whatever we choose to call that part of the ‘bundle’ – the intellect. Automation will happen in high processing areas, i.e. document creation.

My suggest was that the other part of ‘the bundle,’ the processing of routine data, that clients are more than capable of doing (they do it already for banking, insurance etc etc) or fee earners can input better. If you look at the duplication of data capture (pen and paper for example), then dictated, then typed…it is very inefficient. I accept this may not be the same for all firms but this process, where it exists is high cost.

A good example; we are seeing increased usage of our biz documents such as shareholder agreements because tech start ups expect law firms to transact that way. They do not expect an advisor to be writing on pads and doing long inefficient meetings = expensive.

I am not sure automation has been ‘over hyped’ and I do think there is an inevitability to it (it is part of the future, be that delivered via Epoq, Lexis, RL, Zoom or whoever) as clients will not expect to pay to type their personal details into a document. Amazon, eBay etc have all educated the market into a better way to engage. Law firms are still stuck in Web 1.0.

The value a fee warmer offers is to review and amend, not to input or be a data capturer. The sooner fee earners focus on that value and spend less time on inefficient process the more secure they will be.

regards

Jon

17 10 2011
Legal 2.0 (@legaltwo)

Ha those fee earners may be ‘warmer’ but are they cuddly?

Jon

18 10 2011
James F. Ring

Many technologists pitching software to lawyers might not want to give offense to their potential clients by “remotely suggesting that software can replace dispute, discussion, negotiation, bargaining or whatever we choose to call that part of the ‘bundle.’ – the intellect.” But prominent academics aren’t under similar constraints.

See, for example, the recent empirical study conducted with respect to the fair division process known as the Adjusted Winner system, which concluded that the system “substantially” and “eminently” improves upon traditional approaches to negotiation, Bloch, Katrin and Wagner, Ralf, ”Countering Negotiation Power Asymmetries with the Adjusted Winner Algorithm?” (March 7, 2011), available online via the Social Science Research Network: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1805025.) The authors of that study went on to suggest that “new negotiations training concepts—grasping mathematical structuring and modeling of negotiation situations and, thus, going beyond the widely accepted Harvard method—need to be developed and evaluated.”

See also, for example, Babcock and Landeo’s study suggesting that two parties on opposite sides of a claim for money would both be better off if, without having to secure the other party’s cooperation or consent, either party could access and use a mechanism that (1) would enable each party to commit to a confidential settlement proposal, and (2) would impose a settlement in the event that each party made a confidential proposal and those proposals matched or overlapped. Test subjects who were able to use such a mechanism achieved settlements 69% of the time (as opposed to a 49% rate for test subjects that were limited to using their “intellect” in traditional negotiations), settling at an earlier stage more than twice as often, and with litigation costs that were 37% lower. Babcock, Linda C., and Claudia M. Landeo (2004). “Settlement Escrows: A Study of a Bilateral Bargaining Game.” Journal of Economic Behavior and Organization, Vol. 53, No. 3, pp. 401-417. Moreover, studies suggest that, when such a mechanism is properly designed, it does more than simply increase and accelerate settlements and substantially reduce costs. It “generally leads to… payoffs that are more in line with the underlying merits of the case….” Gertner, Roger H., and Geoffrey P. Miller (1995). “Settlement Escrows.” Journal of Legal Studies, Vol. 24, Issue 1, pp. 87-122.

To the extent that some technologists are not calling lawyers’ attention to systems that embody procedures as described in the above-referenced studies, it may be because those systems serve to at least “remotely suggest” a very different view of the legal field’s future than the one envisioned and promoted by many lawyers and technologists.

21 10 2011
Jordan Furlong

Mark, I hate linking to anything I wrote in a comment, but this is an article for an online legal periodical and it’s bang on topic:

http://www.cba.org/cba/practicelink/leadership_technology/systems.aspx

It’s called “Here come the robo-lawyers,” and to summarize briefly, you’re exactly right, except that this technology isn’t on the way; it’s here.

5 12 2011
The end of the beginning « The Intelligent Challenge

[...] reality, there was no shortage of material to write about – outsourcing, new business models, technology,  the need for innovation and differentiation, and the even more pressing drive for [...]

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