"Wake up": how young lawyers see the future

Thank you for the invitation to share my thoughts on the future of the legal profession, and in particular the results of the joint survey of the CCBE and AIJA, the International Association of Young Lawyers.

Let me start with a journey back in time: 1975. Imagine a world with no smartphones, no digital cameras, no chance to make dozens of pictures hoping that one will turn out OK. A single company dominates the market, for both cameras and film. That company is Kodak.

In this world, a young engineer, 24-year-old Steven Sasson, invented digital photography. Did this invention “disrupt” the industry? Absolutely. Not then and there, but ultimately it turned the photography world upside down.

Particularly sad is that the technology that almost killed Kodak, was born at Kodak. Sasson worked for Kodak, which owned the patent for digital cameras, but Kodak decided instead to continue with their lucrative business model of selling cheap cameras and expensive film.

The patent expired in 2007. Five years later Kodak filed for bankruptcy.

The biggest threat

Why did I share this story with you? According to our survey on the future of the legal profession, 60% of young lawyers believe that the biggest threat to the profession is lawyers themselves. Not robots replacing humans, not alternative service providers, nor predictive justice, but lawyers themselves – their resistance to innovation.

This attitude may be explained by various reasons.

First, as lawyers, we suffer from the typical “lawyer mentality”: we tend to be perfectionists, sceptical and autonomous. These personal traits may make great lawyers, but also make it particularly challenging to lead, change and innovate.

Perfectionists are not good at trial and error. But this is often the prerequisite for change and innovation! Kodak wanted their products to be perfect, and they also lacked the high-tech mindset of “make it, launch it, fix it”.

Being sceptical is kind of an occupational hazard. We hunt for problems in order to protect our clients. But a negative mindset does not help innovation.

Being autonomous and independent, we don’t like being told what to do. But it is worth learning from others if our own mistakes may result in our disappearance from the market.

The second reason may simply be lack of imagination. Kodak didn’t believe anyone would want to watch pictures on a TV set. Most of us wouldn’t be able to think outside the box either. Henry Ford said: “If I had asked people what they wanted, they would have said faster horses.”

The third reason for our resistance may be shortsightedness. Sasson estimated that it would take 15-20 years for the digital camera to compete with the analogue one. The corporate leadership was not excited about the distant future. Past success may make us complacent and reluctant to change the business model that has served us so well. “It’s hard to convince a room full of millionaires that they’ve got their business model wrong,” is a famous Richard Susskind quote.

So, change attitude! This is the first message of the survey.

Caught in the middle

Turning to the second message from the survey, 60% of respondents say that their firms, although they are aware of the changes in the market and in technology, have not taken measures to meet the future challenges. They also feel that the training of lawyers is not adapting sufficiently to the new environment.

We are standing a bit lost, between two worlds: the past with traditional practice and values, and established rules; and the new high-tech world, with lots of new possibilities, the rules of which are not yet clear.

We are aware of the new world, but we are clinging to the old, or at best, are trapped between the two, not making the steps to reach the other side.

The future is here. Those who don’t act now, will be left behind. It is no longer the big fish eating the small ones, but the quick fish eating the slow ones!

Practical steps

How can we become the quick fish and benefit from the possibilities? I can group the findings into three blocks.

(1) Marketing and publicity

Due to relentless connectivity and the blooming electronic legal marketplace, potential clients first search online for solutions, and very few contact a lawyer. According to a French study, more than 90% of people don’t realise that their problem is a legal one. Those who seek the help of professionals, turn first to a website to solve their problem. Lawyers come only second, very close to search engines standing in third place. Thus there is a vast pool of potential clients!

The time of “shop window websites” has expired. More and more forms of automated legal intelligence are provided online within fully automated lawyer/client service relationships – often for very low prices. An increasing number of law firms offer cheap subscription to legal advice or automated document assembly.

With the help of cookies and algorithms, law firms should be able to collect data on their prospective clients from the web and through their social media contacts, and to exploit such data commercially. In most countries this would involve the rethinking of rules on marketing, as well as on success and referral fees. 

(2) Opening up the profession

At a time when investment is crucial for improving legal delivery, regulations that prohibit law firms from institutional capital investment seem anachronistic.

I understand that the 2010 Legal Services Act provided for the creation of alternative business structures in Scotland, but that (unlike England & Wales) there will be restrictions on non-lawyer ownership in that any licensed provider will have to be owned 51% by solicitors and/or other regulated professionals.

It is surely the right direction, as almost 60% of young lawyers believe that:

• law firms should be controlled in large part – not entirely – by lawyers;
• law firms will engage in multidisciplinary partnerships, allowing non-lawyers to become partners and law firms to provide other services;
• law firms will employ more non-lawyers to be part of teams providing legal and other services to clients.

But let’s face reality: other providers can no longer be considered “alternative” – they are pretty mainstream in the US (and increasingly in Europe too).

LegalZoom, which offers legal self-help products to clients, has more than 3.6 million customers and was the first US legal entity to acquire an alternative business structure licence in the UK.

Rocket Lawyer, a Google-backed legal technology company, in September 2016 entered into a joint venture with French legal publisher Éditions Lefebvre Sarrut (ELS) to launch Rocket Lawyer Europe.

Axiom, a legal staffing-turned-technology company, has major corporations as clients: it has a five-year contract management services deal with Johnson & Johnson, across 10 languages; and signed a $73 million deal with Credit Suisse to process master trading agreements.

UnitedLex has developed proprietary technologies, and having built a global multidisciplinary workforce it counts half of AmLaw 100 law firms, and a quarter of the Fortune 500 companies as customers.

Let’s not forget traditional players: the Big Four accounting firms, global law firms or legal publishers.

Dentons, the world’s largest law firm, has created NextLaw Labs, an independent and autonomous subsidiary designed to disrupt the legal industry through innovation. They have an undisclosed investment in Ross Intelligence, powered by IBM’s Watson.

Thomson Reuters, publishers of Westlaw, is to use IBM’s Watson across its information businesses. Watson needs big data and training at least initially by people, and Thomson Reuters has both.

(3) New technologies

If you are not sick of hearing of robots replacing humans, then you have not been paying attention.

Richard Susskind says that in the 2020s law firms – and most other professions – will have a very clear choice: they will either compete with machines or they will build the machines (themselves) that will compete with other machines.

Machine learning

Last year at an AIJA conference, hardly anyone had heard of IBM’s Watson, let alone knew what Watson had to do with legal practice. In one year this has completely changed!

What is unique about Watson is that he can understand unstructured data, such as literature, articles, blogs, tweets – which is 80% of data available today. He understands context, which is very different from simple speech recognition. But what makes him so powerful is his ability to learn. The more we interact with him, the better he gets.

Watson, which previously filled a room, has been reduced to the size of a person – and early in 2015 a team of students at the University of Toronto created a startup to bring artificial intelligence to legal research using Watson as a platform. They launched ROSS Intelligence, an AI system that can answer lawyers’ natural language, legal research questions.

The company received major investments, relocated to Silicon Valley, and now the legal robot is accessed via computer and billed as a subscription service. It already has law firm clients.

You ask your questions in plain English, as you would a colleague, and ROSS then reads through the entire body of law and returns in an instant a relevant answer or memo, on the basis of legislation, case law and secondary sources, with citations.

It is just a matter of time before ROSS and Watson will learn other countries’ laws. Dentons is an investor in ROSS, and IBM Watson for Legal plans to move to Europe. Watson already speaks nine languages…

Bots/digital assistants

But we do not need to go as far as expensive machine learning software. Look at everyday examples that could make our lives easier, that can perform automated tasks (search something, call someone, write an email).

How many of you have iPhones? How many of you use Siri on your iPhones? Siri handles over two billion commands a week, and Google Now, Amazon Echo’s Alexa and Windows’ Cortana are also present in many American households. They recognise almost anyone’s speech without training.

Machines now nearly equal humans in transcription accuracy. Siri and also iPhone’s speech-to-text function are very helpful, but according to my experience, very few iPhone users are aware of their existence, let alone use them. Most of my friends and colleagues were astonished when I showed them that pushing the mic button on the iPhone when writing an email instantly writes down with great accuracy what I say – in English, German or even Hungarian!

Predictive analytics

Some of you, the sport fans, may have seen the movie titled Moneyball. In the Oakland Athletics baseball team’s real life story, the manager created a superb team out of nowhere by analysing data to reveal and recruit the best bargain players who could come together as a winning team. The theme was taken up by Sharon D Nelson and John W Simek in “Moneyball: Hollywood and the Practice of Law” (Law Practice (ABA Law Practice Division, vol 42, no 4), which inspired this part of my talk.

How does data analytics work in the legal field? Basically, millions of pages from litigation records are fed into an analytics platform which arranges the unstructured data using natural language processing and machine learning. You can then simply ask who has won the most of a certain type of case in a specific geographic area, and the platform gives you the answer in an instant.

For example, LexisNexis bought a small Silicon Valley startup called Lex Machina. Their software (Legal) mines public court documents using natural language processing to help predict how a judge will rule in a certain type of case.

Owen Byrd, CEO of Lex Machina,  said that similarly to baseball players and teams, lawyers and law firms will all be subject to statistical analysis and performance rankings. And Ben Wolkov, CEO of Litgas, has claimed: “Big data is bringing transparency. Picking attorneys by anything other than their win rate no longer makes sense.”

A few more predictions

With this excursion into AI, I did digress a bit from the survey results, but I felt it was important to give you some insight into where technology is leading, in order to understand the context of the results of our survey. Let’s turn back to the remaining results:

• Four out of five think that new technology is going to affect the way we provide legal services and impact legal fees; and half already experience price pressure.
• Currently only 2% use artificial intelligence, but the vast majority believe that in the next five years AI will accomplish tasks currently done by lawyers.
• And 70% believe that predictive justice (the use of automated systems predicting with a high degree of certainty the possible outcome of disputes) will impact the profession.

Final messages

Reinventing a law firm (let alone an entire profession) sounds like repairing the engines on an aircraft – without taking the time to land it! (Adapted from Jim Calloway, Law Practice, vol 41, no 5.)

The good news is that we can do it.

Bar associations and law societies can – and according to the survey are expected to – play a vital role in guiding and helping lawyers to enter the new world, while safeguarding some of the values of the past.

The questions to consider are:

• What can the management of law firms do to innovate and proactively prepare for the future?
• What is the “protection” which regulators and bars can provide?
• What training programmes and collaboration opportunities can associations of lawyers and bars offer?

When answering these questions, it is time to think outside the box. As scientist Alan Kay put it, “The best way to predict the future is to invent it.”

The future is full of outstanding opportunities. Innovating technologies and business models, we can not only become a “bright, shiny, digital” version of ourselves, but we can also enable access to justice and affordable legal services to an expanding client base, currently with an unmet need. 

Let me finish by repeating: The biggest threat to the legal profession is lawyers themselves: change attitude and wake up!

It is time to do so, if we do not want to fade away, like an old paper photo…