Artificial Intelligence: opportunities for law firms
By Rohit Talwar – CEO Fast Future Research
Artificial Intelligence (AI) represents both the biggest opportunity and potentially the greatest threat to the legal profession since its formation. This is part of a bigger global revolution – where society, business and government are likely to experience more change in the next 20-30 years than in the last 500.
This large scale disruption is being driven by the combinatorial effects of AI and a range of other disruptive technologies whose speed, power and capability is growing at an exponential rate or faster – and which both enable AI and are fed by it. These include quantum computing, blockchain technology, the internet of things (IoT), big data, cloud services, smart cities, and human augmentation – all of which could literally be hundreds or thousands of times more powerful and impactful within a decade.
The resulting changes will literally lead to the total transformation of every business sector, the birth of new trillion dollar industries and a complete rethink of the law, regulation, legal infrastructures, and the supporting governance systems for literally every activity on the planet.
I believe law firms can and should escape from conventional wisdom and look to drive exponential improvements in internal performance and market growth by exploiting the opportunities presented by AI and other emerging technologies.
AI has truly transformative potential – with a wide range of legal applications emerging, such as:
- Inferring the likely outcome of a case
- Determining the best structure for a contract
- Suggesting how best to approach a new matter, or
- Making sense of literally billions of data points across the web to spot new and emerging risks and legal threats.
I envisage five broad categories where we will see increasing use of AI within law firms in the next three to five years:
- Automation of legal tasks and processes
- Decision support and outcome prediction
- Creation of new product and service offerings
- Process design and matter management
- Practice management.
In addition, we are likely to see the growing use of AI both by in-house legal teams and in a range of online platforms offering direct services to businesses and individuals. AI will also power developments using blockchain technology (the secure transaction encoding mechanisms that underpin most digital currencies such as Bitcoin) e.g.:
- Smart contracts encoded in software which require no human intervention
- Distributed autonomous organisations (DAOs) with no human employees that exist entirely in software
- Decentralized Arbitration and Mediation Networks – which effectively operate as ‘opt-in’ global justice systems for commercial transactions, and which sit outside the existing national and global mechanisms
- Algocracy (Algorithmic Democracy) – creating global codes of legal transacting by codifying and automating legal documents, including contracts, permits, organizational documents, and consents
- Rewriting and embedding the law in software – e.g. automatic fines, drawing evidence from the IoT, standardized open source legal documents, and automated judgements.
So How Might AI Evolve Within the Sector?
Here is a plausible timeline of AI developments in the legal sector over the next five years:
The Next 18 Months
- Growth of law firms establishing internal technology innovation labs, creating seed funds to invest in legal technology start-ups, and running joint experiments with technology providers and clients
- A number of firms and in-house teams will run AI trials and develop applications than create smarter internal processes
- A range of trials and applications of AI for lawyer decision support
- Launch of the first client facing AI applications and new AI-enabled products and services
- Growth of FinTech – rising pressure from financial services to embrace AI/ Blockchain technology – with legal cost reduction a key driver
- Emergence of Blockchain Smart Contracts and DAO’s
The Next Three Years
- Clear evidence of lawyer replacement by smart technologies
- Widespread and accelerating deployment of AI on core law firm processes
- Meaningful penetration of AI into in-house legal
- First truly AI-centric law firms
- Significant range of AI-based solutions offered direct to consumers and SMEs / Technology businesses
- Widespread adoption of Blockhain smart contracts in newer firms / Rise of DAOs in both the private and public sectors.
The Next Five Years
- Applications starting to emerge that display near-human levels of intelligence (Artificial General Intelligence) in certain domains
- First examples of true Algocracy – Countries moving to digitising / automating / embedding the law
- Blockchain / smart contracts / DAOs in widespread use in financial services and other sectors
- 20-50% of ‘routine’ legal work by sector fully automated by clients with no law firm involvement
- New technology-centric legal sector entrants from the last five years competing head on with Big Law
- AI in widespread use across law firms and frequently mandated by clients.
All these developments will require the interpretation, reframing and redrafting of legal frameworks and the creation of new legal concepts and dispute resolution mechanisms to encompass new political, economic, social, and business paradigms. So while AI will undoubtedly have a transformative impact on how law firms work internally, the true exponential growth opportunity lies in helping, governments, businesses and civil society to understand, regulate for and adjust to the coming waves of AI-enabled disruption.
For forward thinking law firms, these developments in AI offer the potential to drive exponential growth in revenues – if we give ourselves permission to invest the time understanding the brave new world technologies and their transformative potential. Whether firms seize the opportunity or become paralysed by fear and indecision will ultimately be a matter of choice and a function of our willingness to step into the unknown and start learning.
ABOUT THE AUTHOR
Rohit Talwar email@example.com is a global futurist, strategic advisor and the CEO of Fast Future Research and Fast Future Publishing. He advises business, government and NGO leaders around the world on how to prepare for and create the future in an increasingly disrupted world. He is the editor of a recently published book on The Future of Business www.fastfuturepublishing.com. The book draws on contributions from 62 future thinkers around the world to explore how developments such as AI and robotics could transform existing industries, create new trillion-dollar sectors and reinvent business over the next decade.