Legal IT: How law firms will be working in the future

Gartner (the world's leading technology analysts) often preface their predictions on technological change with the caveat that it is easier to predict the trajectory of a technology than to predict the human usage of that technology. There is much new and emerging technology that is disrupting many business sectors at present, but predicting how it may impact law firms is definitely an art rather than a science.

There has been a lot of talk in recent months of how artificial intelligence (AI) is set to take over large tracts of the legal sector and how this change will result in the destruction of the sector as we know it. Technology and the power for change that it offers many sectors is undoubtedly a fact. Disruption of the established order is happening across many industries: Amazon, the world's biggest retailer, has no physical shops; Netflix, the world's biggest film seller, has no cinemas; and Uber, the world's biggest taxi firm, has no taxis. Digitalisation of many aspects of our life is already prevalent.

Having said that, for all the hype about a revolution in UK legal services since the 2007 Legal Services Act came into force, we have yet to see a technology-enabled new entrant disrupt the sector along the lines of Amazon or Uber.

Where does the drive for innovation come from?

The legal sector is highly client-centric and many lawyers will argue that if clients are not requesting change then the primary motivator is absent. However, this could be viewed as a high risk strategy in the current world. As Steve Jobs once observed, 'you can't just ask customers what they want and then try to give that to them. By the time you get it built, they will want something new'. As technology and the way it is implemented and used changes at an ever faster rate, those firms waiting for their clients to request a change in how they work are running the risk of not being able to deliver against the request before another firm arrives and does just that, or before the client's needs have changed.

Whilst we are not yet seeing an Amazon-esque disruptive influence in the legal sector, there are a number of smaller organisations that are starting to challenge the traditional approach to the conduct of legal activity. Radiant Law, a smaller firm based in the UK and South Africa, already offers an automated contract creation mechanism that allows the production of draft contracts based on the completion of a core information gathering pack. This approach, which is highlighted through a declaration of their use of technology on the front page of their website, offers a definite departure from the traditional approach of engaging a solicitor and then paying for the initial meetings and the production of contracts by the solicitor.

A number of law firms - primarily US-based - have already established on-line advice hubs that deliver guidance and opinion on matters that are capable of being analysed by reference to structured decision trees. Although this sounds limited, these decision trees are evolving rapidly and are capable of handling millions of variables to arrive at very granular responses. They are also capable of self-adapting. Where they are unable to reach a conclusion or the conclusion is challenged, human intervention can be requested and the systems will then 'learn' from that intervention and not make the same request again.

These are simple examples of where innovative lawyers have established a new approach to working, and are bringing clients to the approach rather than waiting for the client demand. Is this a huge disruption to the legal sector? Not at present, but when examined in the context of the ongoing disaggregation of legal services, it can be viewed as a potential disrupter in the short and medium term.

Purchasers of legal services are increasingly focused on acquiring business outcomes rather than purchasing legal process, and they are seeking greater efficiencies from lawyers. As reliable information becomes widely available through the internet, these purchasers are far more aware of the processes involved in legal process and far more inclined to seek efficiencies from them.

As more organisations move towards electronic document and data storage, they seek more electronic interaction with their legal advisors. They expect to see the use of technology in such activities as e-discovery, where literally millions of documents can be closely and effectively examined automatically. Despite the rise of electronic storage and data interchange between organisations, a recent survey highlighted that only 28 per cent of Chief Information Officers (CIOs) in the legal sector saw integration with their clients' systems as a priority in the coming ten years.

Law firm communication in the digital age

In terms of communications, there are multiple legal services that are available online including the ability to 'talk' to a solicitor directly through the internet. Whilst this is unlikely to figure as an approach in significant corporate take-overs, the ability to communicate on demand through a variety of different media and without having to visit an office is becoming increasingly prevalent in many sectors. Yet, although many law firms operate a unified communications and presence awareness solution within their own offices, there is a notable reluctance to share this information with their clients.

It is already relatively easy with a fairly small subscription to access a collection of online lawyers and to use simple interfaces to state specialist skills required and to establish the scale and scope of a matter without having to attend an office. This approach also means quicker access to relevant specialists and the completion of initial screening and assessment questions only once (as these are then shared between multiple legal experts if necessary).

The digital age is, for many sectors, about establishing empowerment and access to a wider audience who prefer to use different tools for communicating. The CEO of the large acquisitive company who will be seeking multiple M&A advice in five years' time is likely to be a high user of social media and other digital services. This CEO will expect responses in internet time and will expect to pay for services based on outcome.

There is already a widespread challenge today around the value added by 'man in the middle' services. The introduction of Direct Access to barristers to enable the public to contact the barristers directly is a threat to the role of the lawyer and furthermore (and particularly in the US), people are challenging the need for the involvement of lawyers in certain processes at all. In many respects, the cogency of this challenge is immaterial at this stage: it is the fact that the challenge is being raised that should be the cause for concern within the sector and something that should be examined to understand what actions can be taken by firms to meet the challenge effectively. Technology options that deliver standard services more efficiently through AI-based solutions is one clear route to alleviating the challenge against the 'man in the middle' services by removing the 'man' element and acknowledging the wider belief that many services can be delivered through alternate mechanisms.

Many clients are becoming increasingly aware of technology solutions themselves and it is becoming increasingly incumbent on firms to acknowledge this and seek alternate approaches to delivering at least some of their services.

The changing role of the law firm Chief Information Officer

Across many sectors there is a recognition that the traditional role of the CIO has to change from delivering the technology that supports the business to becoming an enabler and leader of different approaches to business. One of the changes that the Legal Services Act allowed in the UK was the introduction of alternative business structures (ABSs), which allows technologists to head up firms. There are an increasing number of these firms in existence now, and whilst none has yet generated a seismic change, they are creating smaller shockwaves in certain sectors.

Automated contract creation, online consultations, and e-discovery all exist today. An app for phones that allows the scanning of a contract which is then reviewed by a robot for contentious clauses is potentially available now as all the necessary technology exists. As with many of the great disruptive movements, these are generally starting with consumers. Rather like Amazon did.

As the role of the CIO changes so must the way in which technology is viewed. The best people to determine where technology can impact the sector are the professionals within the sector. New generations of technologically aware people are entering the profession. They have an awareness and knowledge that is of incalculable value to their firms if it is harnessed and given an outlet.

Systems already exist where complex legal opinions are given through the use of intricate decision trees that are fed by machines capable of not only reading documents but interpreting the meaning of them through natural language analysis. These opinions still require judgment and there is no suggestion that the human element will be removed. However, rather like with medical assessments, if the initial 90 per cent of the effort can be automated and the remaining 10 per cent of high value interpretation and accountability remains with the human element there are a number of inevitable outcomes. Costs of assessment are radically reduced, but it is likely that the revenue of the remaining 10 per cent of human-centric work will become more valuable. Accuracy and consistency are higher and speed is greater. There will be an inevitable pressure from the consumer who wants faster, more efficient, accurate, and cheaper results and it will be difficult to resist. The only question at this stage is which firms have already started to examine and implement this approach and which are waiting until they are asked because they are confident they can hold their clients at bay while they develop the technology.

These decision-making trees and the technology associated with them are developing in many sectors, especially in health care for initial assessments. As they develop and are deemed sufficiently robust to apply to this sector, it is inevitable they will enter other sectors. Whilst an admittedly emotional argument, the fact that such technology can be applied to what may become life and death situations means that it will gain significant currency generally and as more people become accustomed to such decisions being made by computers, they will expect it in other areas of their lives.

CIOs of law firms need to at least evaluate these technologies and should already be considering what impact they will have and how they will fit into their existing technology structures. If the required connections are identified and can be made ready, then adoption becomes a faster, more efficient activity. The likelihood with many of these technologies is that they will be consumed remotely and, therefore, law firm CIOs will also need to begin to adapt their strategy towards embracing and operating multiple platforms and external connections. CIOs of law firms, as with CIOs across many industries, have an opportunity to drive change and opportunity within their firms as technology offers more options for executing business in different and disruptive ways.

IT has evolved from being a support function to having a place on the strategic agenda for many organisations and, therefore, the partnership should now expect the CIO to have a clear business perspective and to share this vision with the firm. IT strategies are now expected to show innovation and leadership on business objectives rather than being created to support the objectives defined by the business leaders. The most fundamental change for the CIO is the change from the owner of a support function to a core business leader who can empower and drive a firm towards new and innovative ways of working.

Although this change may be recognised in many industries, it must be accepted within the partnership who, in order to enable the CIO to deliver effectively in the era of digital change and disruption, must provide an effective 'seat at the table' for the CIO in order that they may voice their thoughts and ideas.

The CIO of today is less a technologist who has evolved into a manager, but is rather from a business operations background and can understand how to implement innovative technology to improve operational efficiency, reach more clients, or provide better experiences for existing clients. As technology moves to the cloud and multiple providers of solutions, the CIO needs to understand how to extract maximum value from technology solutions and how to operate services across multiple platforms and to be open to embracing these when they deliver tangible benefits to the firm.

The modern CIO must be highly business aware, innovative, and capable of communicating vision and leading both IT and the firm in the attainment of that vision. The CIO also needs to be acutely aware that the speed of change in business is increasing and so any strategies must also examine the ongoing support of existing systems and the ability to rapidly develop and deploy new systems. Where firms are waiting for client pressure to change, this need for rapidity will be even more important and a truly two speed approach to IT will be called for.

A note on security

Security is often cited as a reason for resisting too much technological change, and yet there are very few law firms who do not share confidential information by e-mail despite this being one of the most insecure forms of data sharing available. Transmitting documents through this medium is inherently insecure and yet it is often cited as the preferred approach within the legal sector because other methods are viewed as 'insecure'.

The adoption of cloud computing has been impaired in some industries because of fears over the security of data in a cloud environment and also because of misunderstandings over how and where data is stored in cloud environments. There is much fear, uncertainty, and doubt surrounding emerging technology and the security implications of adoption but these fears should not prevent further examination. Firms should be aware that users will always be the greatest security vulnerability within any system, with Gartner research already indicating that the majority of security breaches in 2015 were caused by human factors. When assessing new technology options, one of the keys for any firm is in understanding how the systems will integrate and make the user's experience more simple, which will then reduce the chance of the types of error that can lead to security breaches.

Large scale cloud providers invest a significant proportion of their time and finances into ensuring that their systems are highly secure with the result that, in many cases, their core systems are better protected that the in-house environments that are often regarded as the more secure option by firms.

Conclusion

Digital disruption is prevalent in many business sectors and very few thus far have proved immune to significant change. The legal sector has proved fairly conservative to date with many of the heralded ABSs not having had the radical impact that was expected, but will this status quo remain for the next two or three years?

The rise of technology that mimics the ability of humans to assess and evaluate information is going to place pressure on those firms that persist in using humans to perform tasks that are viewed as effectively executable by machines, and this effectiveness will be judged by a client base that is very aware of the technology. The adoption of change need not affect an entire firm, but there are solutions available that can be applied to certain functions already: standard contract production, e-discovery, and initial consultations are just some of the options that can be addressed with proven solutions. These can be applied to certain aspects of a firm to establish their worth now so that proper judgments may be made in the future.

Some firms are experimenting with paperless solutions using a variety of reader technology and also changing their working practices to allow staff to work from remote or home locations through the adoption of unified communications and remote access systems - creating a 'virtual legal practice'. Extending these experiments or adopting them within firms that are yet to try them will give these firms a head start when clients begin to demand the level of access to their lawyers that they already get from their other professional advisors.

Human judgment and, perhaps more importantly, accountability for decisions, are unlikely to be replaced by machines in the near future, but now is the time to take a long hard look at every process in your firm and decide whether it is repeatable or has a set of codified rules that can be executed by an intelligent machine. These latter functions are those that the clients are going to expect to see happen more quickly, efficiently, and in a more cost effective manner in the near future.

Simon Ratcliffe is a consultant at Advanced 365 (www.advanced
computersoftware.com)