Disruption in the legal sector: Are robot lawyers upon us?

As stereotypes go, that lawyers are risk averse is one of the most commonly used and perhaps with good reason. Many elements of the legal profession, from contract drafting to billable hours, have not changed much in the last couple of centuries. In fact, beyond the introduction of computers, one of the few, but striking differences from that time is the disappearance of carriages as a mode of transport.

Yet the world does not revolve (only) around lawyers and most other industries have been disrupted by technological advancements. There are numerous examples of major players in their respective fields, from Blockbuster to Kodak, who refused to adapt and ultimately disappeared in the face of streaming websites and digital photography respectively. While this does not seem to be the case in the legal sector, at least in the short run, hundreds of legal startups are popping up around the globe. In their 2016 study the International Bar Association noted a number of reasons for this trend.

Source: https://abaforlawstudents.com/wp-content/uploads/2017/04/robotlawyer.jpg

Namely, clients’ demand for a more cost efficient and transparent service has been answered in the form of startups like Atrium LTS, mentioned in Business Insider’s article for the best new startups of 2017. According to them, close to 100 investors have given Atrium LTS $10.5 million, which, according to its founder Justin Kan, wants to “automate repetitive, low-value work and allow firms to deliver speed, transparency and cost certainty to their clients”.

Another driver for change has been the advancement of artificial and information technology. Startups, ranging from the intellectual property-related Alt Legal in the USA, to the Indian legal search engine called CaseMine, have drastically reduced the time and cost needed to perform traditionally laborious legal tasks. What’s more, their availability online can potentially liberate, to an extent, an industry with a traditionally rigid business structure.

A final reason is the pressure and investment from the Big Four accounting firms. For example, Deloitte, in combination with the law firm Allen & Overy (A&O) launched MarginMatrix in 2016. This “codifies the laws in various jurisdictions and automates the drafting of tailored documents completing a task that would usually take up to 15 years in lawyer hours in just 12 weeks”.

In fact, A&O did not stop there and is an example of how established players in the legal industry are being proactive in responding to disruption. Having also won the Financial Time’s most innovative law firm in the ‘Top 50 Law Firms and Legal Service Providers Awards 2017’, A&O launched Fuse this September. In this space, “tech companies, A&O lawyers, technologists and their clients will collaborate to explore, develop and test legal regulatory and deal-related solutions”.

Although the space has only been open for a month or so, Shruti Ajitsaria, Head of Fuse, says that it is already the site of significant collaborations.

“It’s been a really enjoyable experience so far — the level of interest that we’ve had from A&O people and our clients has been extremely encouraging. Numerous pilots have been agreed so that tech companies working here can shape their products more effectively.
We have also invested in Nivaura, one of the companies working in Fuse. We really want to be at the forefront of developments in this area. What Nivaura’s doing, for example, ties in with what we’ve been looking at for a long time — which is improving efficiencies around securities issuance”.
Source: https://softwareengineeringdaily.com/wp-content/uploads/2016/12/robotlawyer.jpg

So is the revolutionization of the legal industry really upon us? People are undecided. In a recent study, Deloitte stated that automation will lead to the loss of about 114,000 jobs in the next 10 years. In fact recently, blockchain digital encryption was used for the online purchase of a property in Wales. Being tamper-proof, blockchain is seen as a method of creating “smart” contracts. If this is the case, then the need for contract drafting lawyers will be obsolete.

Others are less pessimistic. Instead, they believe that technology will continue to offer a helping hand in an inherently personalised sector. The argument is that in a sector where there is a need to first identify the problem, where a minor detail is often the deciding factor between winning and losing and the risks are so high, certain elements of the job can be automated whereas others cannot. Thus, the continuing need for a tailored service on the one hand and the ability to automate and streamline other elements of it on the other, will lead to a new interdependence between lawyers and technology, rather than a complete overhaul of the legal sector.

Whatever the outcome of this disruption might be, one thing is certain: change, in one form or another, is upon one of the most risk-averse services sectors at last.