Legal IT: from potential to progress

2017 was an exciting year for legal technology, with a genuine sense of momentum for the first time. Arguably, 2018 has been more of a grounded experience. There is still no shortage of hype, but it’s generally been tempered with a greater degree of experience and pragmatism than was commonplace last year. Now that some of the initial excitement around (and inflated expectations of) concepts like AI, automation and augmented workflows has died down, the real work has begun in earnest to translate potential into actionable, visible progress. There have been a number of notable trends apparent in the delivery of legal services, a few of which can be summarised as follows. 

Alternative legal roles

Last year (Journal, November 2017, 18) we wrote about how the profession was starting to look like a far more welcoming place for data scientists, programmers, technologists and project managers. We are pleased to see this trend continuing, and indeed ramping up, during 2018.

Among the headline-grabbing developments, Allen & Overy launched a two-year graduate scheme, which is effectively a traineeship for legal tech, while Addleshaw Goddard announced a new career path available for their trainees to qualify into legal tech rather than fee-earning roles. CMS announced a dedicated in-house legal design team, while Ashurst opened a second legal tech hub in Australia to complement their Glasgow location. At Burness Paull we introduced the role of innovation manager, following on from our first legal technologist role. These are but a few highlights in a year of announcements.

This trend towards upskilling (or as the case may be, reskilling) legal minds towards technology is also influencing the academic world. Many UK universities now have some offering in legal technology, such as Edinburgh University’s LLM in Innovation, Technology and the Law, Ulster University’s LLM in Legal Technology, or the LLM in Legal Tech offered by Swansea University. Next year Manchester University will team up with Freshfields to offer a module for final year undergrads in legal tech and access to justice. At Glasgow University, the Diploma in Professional Legal Practice will next year feature for the first time an elective module on practical uses of legal technology and innovation.

There is undoubtedly a rush among places of higher learning to capitalise on the recent (and growing) need in the profession for creative, open-minded and flexible law graduates. The real practical drivers of innovation in legal services often don’t come from the top, but rather from the bottom. Trainees entering the profession with the right mindset and a solid grasp of the basics of legal technology are in high demand, and we don’t see this abating any time soon.

Legal research developments

Over the course of 2018 we have seen several promising-looking legal research businesses either starting up or making significant headway. Examples like CaseMine, ROSS Intelligence and Gavelytics have been very prominent in the legal technology media with major client wins, funding announcements and promising collaboration projects.

Part of this sudden boom in legal research is down to changing client demands, and the increasing reliance on fixed-fee or capped-fee billing arrangements. Many legal teams now simply can’t carry out research the same way they have done for the last decade; instead they need to use some augmented or enhanced approach to get to the information they need faster. Enter artificial intelligence and natural language processing. Many of the new challengers use these technologies to take the user from initial query to relevant case law and legislation in far fewer clicks than conventional key word or phrase searches. Along the way, some of these tools will also build “smart” audit trails for billing purposes, or make intelligent suggestions of relevant additional information. Imagine, for example, a system which knows who your client is while you are conducting legal research, and can make specific suggestions based on previous work done with that client, which sector that client works in, or which global jurisdictions the client is known to operate in.

Of course the “big two” of legal research, Thomson Reuters and LexisNexis, aren’t taking this challenge lying down. Both have this year unveiled their own AI-driven research tools, aimed at enhancing their own products and keeping the majority of the profession bought in to their proprietary research environments. For example, Westlaw EDGE was launched this summer, giving the biggest revamp to the venerable Westlaw product for a generation. In short,

EDGE represents a total rebuild of Westlaw with natural language processing and machine learning tools applied in multiple ways. 

Legal AI and document review

If 2017 was a year of early adoption for AI-powered document review, 2018 was arguably a year of consolidation and reflection. Certainly there have still been plenty of media releases along the lines of “firm X adopts tool Y”; however the more interesting stories have been about how firms are actually using their new AI capabilities. Large UK or international firms who purchased a product like Kira, Luminance or iManage Ravn in 2016-17 have sometimes struggled to realise the user adoption rates they had in mind, and the reasons for this can be many and varied.

If we were to visualise the famous Gartner Hype Cycle, then we would plot legal AI somewhere along the back end of the Peak of Inflated Expectations, heading into the Trough of Disillusionment. This is not to say that the technology is underperforming – far from it, we believe the technology is sound, and in the right use case it can be a genuine game changer. At Burness Paull, for example, we’ve used AI to carry out document review tasks which wouldn’t merely be inefficient to do manually, but might have been impossible given the volume of documents and the timeframes required.

The challenge is perhaps one of the market’s own making – user expectations of what this first generation of AI products can do are still wildly out of kilter with reality. What we’ve seen in 2018 in particular is a reluctance among small and medium-sized firms and in-house teams to invest in these tools, when they see far larger competitors having a somewhat lukewarm experience. There is however a silver lining to this – smaller, more agile (and usually more affordable) challengers are starting to “disrupt the disrupters”. Businesses such as Diligen, Legal Sifter and Ayfie are starting to find traction with smaller firms and in-house teams, who may not be ready or willing to take the plunge with one of the larger providers. This competition can only be a good thing for the end users, as we wait to see how the bigger players in legal AI will defend their hard-won territory. 

Where next?

Technology remains massively important to how we as a profession deliver a high-quality service to our clients. If we engage positively with legal tech innovators, take care to separate the hype from the reality, and take measured risks on new ideas, then we can do so much more for our clients than produce the same work in a different format. The enthusiasm is certainly not lacking – just recently, London hosted the third annual Legal Geek event, which this year attracted over 2,000 attendees, more than double the audience from 2017. 

This year has been a great test bed for all manner of concepts, tools and technologies, some of which are truly innovative. We’re moving beyond a phase where legal technology is seen as a “nice to have” and into an era where it will become necessary, perhaps even business-critical. We’re also seeing a welcome theme emerging wherein legal technology’s sizeable contribution towards boosting employee engagement and morale is increasingly being recognised and highlighted. We predict that during 2019 a lot more work will be done to identify the biggest areas of stress and pressure in our day-to-day working lives, and new products and services will emerge aimed at taking some of that weight off our collective human shoulders. 

Look out for...

The Journal asked IT service providers to the profession to highlight one development over the next 12 months that will increase efficiency.

Warren Wander, managing director, LawWare: In the next 12 months, HMRC’s Making Tax Digital plans will come to fruition. Integrating MTD into our legal practice management and accounts software is one of our highest priorities. It will make it possible for legal practices to complete VAT returns more efficiently whilst complying with strict HMRC demands.

Brian Welsh, managing director, Insight Legal: “The legal sector is undergoing a digital transformation in which even smaller, growing firms are embracing change to drive operational efficiency. As we look ahead to next year, sophisticated AI and machine learning technologies are now poised to advance the industry’s digital capabilities, helping firms to reduce the margin for human error and make more intelligent decisions at every stage of a case.”

John Flanagan, head of product, LEAP: “Automating even simple tasks, like receiving funds into your client account, can save valuable time and improve accuracy for your cashroom – your client could simply click on a hyperlink in their client care letter, enter their credit card details and automate the transfer with no need to re-key any data.”