Like all sectors, the legal industry has transformed beyond recognition over the past 20 years. With applications such as Lexis Nexis and Rocket Law meaning legal researchers no longer have to walk through libraries and sift through files. We’ll look back at how far the industry has come and where it’s going.
Overview of the legal profession
Law covers lots of areas such as property, immigration, family, employment and so much more. Lawyers themselves are split into solicitors and barristers. Solicitors work in traditional law firms with the traditional hierarchical structure; juniors at the bottom, seniors in the middle and partners at the top. Barristers work in chambers and are mostly self employed. They have additional staff working at the chambers who support the barristers in their daily role.
Lawyers are expensive and often charge hourly rates. In the past they could claim to be the only ones capable of offering legal services. This stopped poorer people from being able to access certain legal help that’s not covered by legal aid. The legal services act helped balance the playing field with the introduction of alternative business structures (ABS). This meant that even non lawyers could start legal firms to offer legal services. This led to larger business such as the Co-op offering legal services and increasing competition.
How technology has changed the legal industry already
The number of transistors and resistors in a chip has doubled every year. This has caused technology to grow rapidly, affecting how we interact with business with services like uber, amazon, deliveroo, revolut and more. Companies need to look in detail at the customer journey from first searching for an answer to their query on a search engine, through to finding the website and the user experience moving through it.
Philosopher and mathematician Gottfried Leibniz, inserted logic into law to develop legal reasoning as precise as maths. This idea was known as Leibniz dream. From this a Canadian professor Hugh Lawford (yes that was actually his name) developed a legal programme Quicklaw which became a legal research company. From that came Lexis Nexis which helped lawyers gather information for a case. Following this came Legal Zoom which helped automate the drafting process. From that Rocket Law began helping users create all kinds of contracts, wills, corporate agreements and much more. These businesses targeted the end user and helped disrupt the industry.
Tech has freed up professionals time so they no longer have to do mundane tasks but can focus on more important cognitive tasks. Legal research in particular has benefitted as they no longer need to walk around libraries looking for files as it’s been replaced with tech. AI in particular will soon dominate many parts of the legal industry. Companies like Don’t Pay are a perfect example of how robot lawyers will be used. Although AI isn’t replacing lawyers just yet, it will disrupt the industry and threatened many jobs and traditional firms.
How the legal industry will change
Firms are under pressure to do more with less. Billable hours are on the way out with fixed fees replacing them. Whilst typically it is in house lawyers help who tend to care more about helping their company maximise profit, external lawyers will need to offer a more commercial service. The market will be more polarised between bespoke services and commoditised work. With commoditised work there will be a large volume which will be easier to automate. This will lead to more mergers in order to benefit from economies of scale. Small firms will have to do bespoke work that is more personal and face to face. This won’t be automated in the medium term but will be needed in the long term.
Firms will compete mainly on price with small profit margins on each piece of work. If they solve a legal problem that can be automated then they could sell them to others in a programme or application. Clients aren’t just looking for legal help, they want anything that will benefit them. With all the data being collected, law firms should be using tech to branch out like consulting and accounting firms have done such as Ernst & Young and KPMG. Whilst embracing technology will only help with this, there will also be more compliance and regulatory work due to legislation like GDPR. In addition, as the price of services goes down then demand will go up. Therefore there should be more work overall despite improving technology.
More staff will have a tech background
Law firms will hire different people in the future. There will be more legal technologists in the short term, while in the long term there will be non-lawyers who will instead have a tech background. Pinsert Masons is an example of a company employing legal technologists such as data scientists and web designers. Future managerial structures won’t just be the typical pyramid hierarchy of junior lawyers, senior lawyers and then partners at the top. Instead there will be an equal number at each level, with remaining numbers made up of paralegals, technologists, and tech manager as well as project managers.
The future of legal technology
Previously junior lawyers would sift through documents delivered to the office, looking for relevant information to add to a bundle. AI could scan this information and read through and add it to a report. This will reduce delivery costs and the time it takes to read through the document. Machine Learning does have it’s limitations. Currently the machine categorises the data it’s given based on certain parameters and the human says which bits are right and wrong. The machine then learns and adjusts. Using narrow parameters may miss out vital information, whereas widening them may include irrelevant information. Therefore it’s hard to balance the two and get it right.
The way AI makes decisions is through what’s known as an expert system. This involves applying an automated decision tree to a series of data. Data can be inputted manually or from the information picked up by AI. The information can then be used to complete the decision tree. These systems can be used to create draft documents or flag up documents or flag up documents for review by looking at certain criteria. Documents often follow predictable precedents so a machine can create them without error. However many documents are bespoke and require human input. Data analysts can also be used to analyse past data to make faster and better predictions of things such as costs and the likely outcome of a case.
Decentralised justice
Blockchain technology could also be applied. A contract could be signed and if this information is stored in a blockchain then no one can refute it. Smart contracts are a perfect example of this. Whilst currently still in their early stages, virtual courts are also beginning to be developed in places such as British Columbia, HM online court in the UK and Hangzhou online court in China. These include evidence being certified by blockchain. Despite rapid and exponential advances in technology across the legal industry, none of it will be able to replace human emotional intelligence. At least not yet.