Almost by definition, law is a conservative profession. But it is now facing the most radical period of change for many decades, perhaps centuries. We are seeing new models of law firm, new channels for offering legal services, new forums for resolving disputes, new definitions of what it means to be a professional.
These are all happening – in some sectors much more than others – regardless of the technological revolution that has swept through other white-collar sectors, from financial services to by own trade, journalism.
Now we add technology to the mix. Two breakthroughs in particular have transformative potential. One is natural language machine learning, colloquially known as artificial intelligence. This has the potential to automate many routine tasks carried out by large law firms and in-house legal departments; contract review is a good example. As we shall see, over the past 18 months AI has entered the mainstream of legal practice. The second technology is blockchain, or more precisely, the distributed ledger architecture enabled by the encryption technique. Here we are at an early stage of evolution, but it is clear that blockchain-enabled asset ledgers and self-executing smart contracts will have a profound impact on at least some areas of legal work. We will hear more later this morning.
But for me, the really exciting development is what happens when AI and blockchain are combined. I have been covering technological disruption in industries in sectors from healthcare to energy to manufacturing to finance for several decades. I think what is going to hit the legal sector could be the most profound yet.
Christina Blacklaws is known as an enthusiastic adopter of new technology in legal services. However she has also warned of the need for the legal profession to play a role in ensuring that systems such as artificial intelligence algorithms operate within a legal framework and that they promote rather than restrict access to justice. As president of the Law Society of England and Wales from July she will be at the forefront of debates with the Ministry of Justice and HM Courts and Tribunals Service over the government’s plans for online justice.
The past two years have seen a surge of interest in innovative tools and research results that make use of artificial intelligence for application in the legal domain. Hardly a week goes by without a system supplier announcing a new contract. This session will examine the current landscape of the LegalTech scene and implementations of AI in law firms, and discuss partnerships between practitioners and researchers aiming to drive forward innovations, including moving up the “value chain” to automate more complex work.
Professor Katie Atkinson is one of the world’s leading experts in AI and the law, specialising in computational models of argument. However her work covers the application of AI as well as the theory, including knowledge transfer partnership projects with two north-west law firms. As outgoing president of the International Association for AI and Law – whose international conference last year celebrated its 30th birthday – she is in a unique position to look internationally, beyond the current hype cycle.
Forget Bitcoin, for now. The real importance of blockchain encryption technology is that it enables the creation of secure peer-to-peer distributed ledgers of non-repudiable time-stamped data. This has been dubbed the “internet of value”. The value could be assets such as property titles, registers of identity or transactions, including legal contracts. The inherent security of distributed ledgers lies in the fact that they are kept in synch across a network of authorised users and opens up the possibility of creating “smart” contracts, whose terms are executed without human intervention when triggered by an external event.
Other applications of blockchain relevant to the legal profession include securing property transactions without the need for a central register of title and self-enforcing compliance in areas such as financial regulation. Such developments would have profound implications for law. While it is still early days, over the past year perceptions of blockchain’s potential have changed dramatically with the first practical implementations. Leading international firms such as Clyde & Co are among those exploring the possibilities.
Clients are highly unlikely to underwrite law firms’ investment in technology unless they see a direct benefit in their external legal spend. This could be fixed fees: automation of many routine legal services may finally achieve the long-predicted demise of time-based billing. AI could also fundamentally change the relationship with traditional legal service providers, enabling clients to make more use of substitutes such as legal process outsourcing to put the squeeze on legal bills.
Research suggests that cost is only part of the equation. Clients want firms to move beyond traditional transaction-led delivery to a new, more collaborative relationship. “Clients will push back on charges based on a legal provider’s AI tools, unless they come up with better integrated services,” research by international firm Herbert Smith Freehills sums up. This session – invaluable whichever side of the fence you sit – will hear more.
Traditionally, GCs have let law firms make the running in AI as investment outside an organisation’s core business can be hard to justify internally. Forward-looking in-house legal departments will not allow such complacency to continue indefinitely. First, falling prices and cloud-based pay-as-you-go services could make it feasible to carry out more routine work in-house. Law firms are aware that clients will wish to share the benefits of AI. The new technologies could provide a catalyst for firms and GCs to work more closely together – and to put more downward pressure on fees.
On the classic bell-curve of technology adoption, much of the legal sector is in the innovator/early adopter stage. When it comes to machine learning, large city firms will be further along, at least in some applications. Blockchain is still right at the start. Combinations of the two are still at the R&D stage.
It is an exciting time to be involved, especially when funding is available for start-ups, knowledge partnerships and pilot implementations. But experience suggests that, before we reach the steady state of technology adoption – and the business transformation it enables – we must pass through a cycle of hype and disillusionment.
This panel discussion will offer a reality check both to those who believe new technology will be a panacea and to those who believe it can be ignored.
Controversy is guaranteed.
The Data Protection Bill currently going through Parliament could give individuals a right to opt out of having automated decisions made about them. This is just one of the regulatory and ethical issues that will need to be confronted as AI makes inroads into the legal world. Another is the transparency of algorithms taking crucial decisions such as whether suspects should be charged with criminal offences or merely cautioned.
Several jurisdictions around the world have taken steps to require the publication of the code underlying such systems – but questions remain whether this is effective, or even possible. There are also calls for the establishment of a licensing body to regulate AI. Where would this sit alongside the existing legal regulatory framework?
Such issues need to be addressed before a high-profile scandal irreparably damages the reputation of AI and blockchain. This session will investigate the threats and possibilities.
Last autumn, a £700,000 commercial property in Trowbridge became the first piece of UK real estate to be sold in an online deal secured by blockchain encryption. The announcement made headlines because it seemed to offer a way of dramatically increasing the speed and reducing the cost of property transactions in England and Wales. However some sections of the legal profession were quick to dismiss it as an irrelevant gimmick. This may be premature. In its latest strategy HM Land Registry has announced that it is investigating blockchain as a way of enabling the register to be distributed among trusted parties such as lenders and conveyancers during transactions, ‘giving them the ability to operate and update in a secure and tamper-proof manner’. The government of Dubai’s land department is already securing transactions with blockchain. World-renowned economist Hernando de Soto says that, by establishing a peer-to-peer secure record of property transactions, blockchain could be the key to tackling poverty in the developing world.
This session will hear from someone with direct experience of blockchain property transactions. Neil Singer, chief executive of Clicktopurchase.com, was behind last year’s UK first. He can be expected to present a real-world vision of a technology which has the potential to remove intermediaries from the conveyancing process – but also to protect lawyers in areas such as money laundering compliance.
Fears about artificial intelligence are far older than the technology itself: this year marks the bicentenary of the publication of Mary Shelley’s Frankenstein and 50 years since the computer in 2001 A Space Odyssey intoned “I am afraid I can’t do that, Dave.” With AI a reality, such fears may be dormant, but they have not died. One area in which they could manifest themselves is in inappropriate regulation. The danger is that new ‘precautionary’ rules to ensure fairness and transparency could regulate the sector out of existence.
The speaker, one of the UK’s most experienced technology lawyers, has previously spoken of the need for caution in this area: existing measures such as the Equality Act and product liability legislation could regulate algorithm-driven products without the need for sector specific legislation.
No debate on new technology in legal services is complete without a prediction that artificial intelligence and smart contracts will remove the need for human lawyers – or even laws. This panel will challenge that prediction. While there is little doubt that many existing roles in law firms and in-house legal departments will be open to automation, in the medium to long term there is every reason to expect they will be replaced by others. There is a great more to law than the “Client service chain” and black letter contracts. And, as one of England and Wales’ most senior judges recently pointed out, the idea that the age of smart contracts will do away with the need for external legal frameworks, is moonshine: “You cannot have 3 trillion contracts per year globally without expecting some of them to give rise to a dispute.”
Neither will automation mean an end to litigation, Sir Geoffrey Vos, chancellor of the High Court, said: predictions will never be 100% correct – and in any case decisions about whether to pursue a case are not always taken by entirely rational people.
The closing debate will examine a future in which human and robot lawyers will work together, but in radically different ways to today.