Cost Savings and Creating Efficiencies
The legal profession is slower to adopt emerging technologies than most industries, but there is growing consensus in support of AI. The biggest motivator for firms to adopt AI solutions is cost savings, both for themselves and their clients. By no surprise, "the single biggest marketing opportunity for law firms is demonstrating a keen knowledge of AI and how AI is going to change the delivery of legal services."
Clients are becoming more demanding that law firms use high quality, high tech, cost reducing systems to more efficiently and effectively deliver legal services. One example would be implementing AI in document review for complex litigation. "Firms are recognizing that failure to invest in technology will hinder their ability to compete in today's legal market," let alone the legal market 5-10 years from now.
It is important to understand that AI is not one system, not one investment and not one major supplier. Instead, AI is a myriad of systems that can be used within a practice area to provide efficiencies in eDiscovery, document review, legal research, and predicting case outcomes. Law firms are attracted to the advantages that AI advancements can provide them over their competition, particularly because the potential platforms for AI are becoming increasingly diverse, and even more cost effective as the number of vendors in the field increases.
"Those platforms will mine documents for evidence that will be useful in litigation, review and create contracts, raise red flags within companies to identify potential fraud and other misconduct, or conduct legal research and perform due diligence before corporate acquisitions." Recently, with the help of AI, researchers were able to predict the verdicts of 584 European human rights cases with 79% accuracy.
What Happens When a Firm Invests in AI?
AI not only improves upon existing processes but also introduces entirely new processes. Machine learning (applying artificial intelligence to program systems to teach systems to learn and develop without explicit programming) is but one example of a new process that is making a significant difference in cost effective data analytics. Machine learning teaches a system to learn from and improve its performance while engaging in its data analytical processes.
"Machine Learning allows computers to find hidden insights without being explicitly programmed where to look." "The Law Society provides evidence of how this can help firms, finding a 40-50% increase in efficiency using machine learning without any initial training. When law firms can reduce costs by $8.4 billion annually on research, this is a significant development."
Because machine learning processes involve little human influence, does AI mean a reduction in the workforce for law firms? "Advocates argue there could be an increase in the sector's labor force as the technology drives costs down and makes legal services more affordable to greater numbers of people." And "while automation can get through a great deal of data very quickly, it can't fully tailor a contract on its own. Every contract will still require human review."
There is a significant learning curve for firms that introduce new internal or external AI system processes. Both lawyers and their clients may not have an extensive understanding of how these new systems work, or how best to use them. However, if the client gets it, the lawyer better get up to speed fast. And presently, AI is not initially the most economical solution. "A small firm will spend about $30,000 to install a software robot to handle legal tasks like workflow management and contract review. And if you need a system to accommodate 500 users, we're talking $250,000 -- to start."
Firms have begun to expand their knowledge management functions, information technology functions, and have even added a "Chief Innovation Officer" role in the C-Suite to manage the cost and intricacies of a firm's advanced IT and AI solutions.
Technology is deeply rooted in virtually every part of our lives. It is hard to imagine that we ever lived without it. However, as much support as there is for new technology and AI, there are still skeptics. There are a lot of "unknowns" when it comes to AI, in both the legal sector and the other industries exploring its potential. At the moment, one thing is sure: AI will drastically change the legal industry landscape by driving competition and forcing firms to adopt a technologically focused strategy.