HOW LEGAL TECHNOLOGY COULD LEVEL THE PLAYING FIELD

He adds: “Say in real estate work, there might be 1,000 leases involved, and you don’t want to sift through every one to see the policy and monthly rent. Now you can have a machine do the bulk of the work. You simply point to what you want a few times, and the machine will learn and pick out the information on its own. It won’t be possible every time; it depends how varied the task is.” With the ability to cope with mountainous data sets, one could be forgiven for assuming this kind of tech is mainly aimed at the big legal giants. But not according to Wallqvist. “One of the reasons why larger firms outcompete smaller ones is because they can snap their fingers and get a room full of paralegals at their disposal,” he says. “But the interesting thing about this technology is that it works just as well for smaller firms as for bigger practices. It’s an incredible equaliser. It removes the competitive advantage of being able to start throwing bodies at a task.” After all, the cost of this tech will usually be paid by the client, and can be expected to be lower than the billable hours stacked up by paralegals. But AI tech will not be suitable for all firms. “Where we deal with law firms below the top 30, the ones where this sort of technology is most successful tend to be those that are pretty specialised,” Wallqvist notes “If they do [a process] hundreds of thousands of times a year, the return on investment will be much greater. It tends to be firms that deal in personal injury, insurance claims, conveyancing – areas where they have had to become much more efficient at what they do to survive. But that experience is slowly creeping up to encapsulate more work that was previously considered to be bespoke”. Drew Winlaw, COO at Wavelength Law, adds that machine-learning technology can be particularly useful for niche firms. For example, he works with one firm that specialises in planning – a field packed with potentially useful datasets. That includes data from the planning inspectorate; data from the planning court, which might be two to five cases a week; and detailed data on the planning obligations imposed on developers to build roads, playgrounds and so forth as a condition of allowing the development. “Being able to draw insights from these kinds of data sets is going to be very interesting for the future,” observes Winlaw. “Increasingly, clients want answers to the bigger questions, such as, ‘what are the chances of me running this argument and getting approval from the authorities’? With access to enough data, a law firm can gain ‘experience’ of a particular area more quickly, by drawing insights from what has happened before”. Wallqvist adds that what clients are looking for from their lawyers boils down to ‘knowledge’; and the technology helps lawyers to enhance that knowledge. That applies not just to external data sets, but also to the exploitation of information already contained within the firm itself, which is often not as accessible as it should be. But while the technology is advancing all the time, for Kemp, there is one tasty nut that has not yet truly been cracked: due diligence in mergers and acquisitions work. “Due diligence currently takes up around 40 per cent of a law firm’s fees in a typical M&A deal,” he says. “But there hasn’t yet emerged a machine-learning tool that can understand the contracts that form part of due diligence, to extract the information automatically. There has been huge progress, but there is more to come”. The solicitor notes that when this breakthrough finally comes, it will not necessarily be law firms leading the way. It could be the Big Four accountants; an Indian outsourcer; or some chap in a warehouse that we haven’t even heard of yet. The big law firms might be inclined to try and cook up their own AI recipe using their special secret sauce; but the corporate clients themselves will be pushing for more of a ‘platform’ approach, whereby the tech will be more widely available. “It’s going to be a very big market,” predicts Kemp, “and the platform approach is likely to be a benefit for the smaller law firms. Within a few years it will be possible for people to buy in these AI services from the cloud, even on a pay-as-you-go basis.” Kemp is enthusiastic about the potential of AI tech for law firms, but he has a warning. “It is easy to see machine learning as a panacea; a solution in search of a problem. It all comes down to being clear about what the actual problem is that you want to solve. “If you invest in the technology, what are you going to do with it - increase prices, increase throughput? How are you going to make more fees from it?” According to Winlaw, “law firms tend to be thinking about the individual client, rather than the wider market need.” But they need to be bolder. “They need to ask themselves, if we did crack this problem, what is the potential of it? How would we cope with scaling it up, and in which geography? It is the ‘thinking big’ element that is not very commonplace in professional services environment,” he remarks.