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AI: good news for law firms – and clients

Artificial intelligence is transforming the legal profession, with some tasks traditionally carried out by humans now being done by robots, usually multiple times faster and more accurately, writes Boase Cohen & Collins Partner Alex Liu.

Hong Kong, 31 January 2019: Readers may recall a scandal involving British engineering giant Rolls-Royce which made headlines around the world in January 2017. The aerospace firm agreed to pay £671 million (about HK$6.73 billion) to settle corruption cases with UK and US authorities. The UK's Serious Fraud Office (SFO) found conspiracy to corrupt or failure to prevent bribery by Rolls-Royce in China, India and other Asian markets in cases spanning nearly 25 years.

Described by the judge in the London court hearing as “a jewel in the UK's industrial crown”, Rolls-Royce makes engines for military and civil planes, as well as for trains, ships, nuclear submarines and power stations. The firm apologised "unreservedly" for its “completely unacceptable” behaviour.

But behind the headline-grabbing sums of money was another story, one that heralded seismic changes for the legal profession, and this involved the role that artificial intelligence (AI) played in bringing Rolls-Royce to account.

The SFO’s investigation had taken four years and amassed more than 30 million documents, from spreadsheets to memos, email printouts to contracts, and everything in between. Rather than pay a small army of junior legal professionals to spend several months wading through the mountain of paperwork to decide what was relevant, the SFO turned to a London-based start-up firm called RAVN (pronounced Raven) which builds robots that sift and sort data. RAVN’s system mixes AI techniques such as computer vision with more conventional database management and can digest not only neatly presented material but also information that comes in a less structured format.

The team of legal professionals had been capable of checking 3,000 documents a day. RAVN processed 600,000 daily and with fewer errors than the humans. Commented Ben Denison, Chief Technology Officer of the SFO: “It cut out 80 per cent of the work. It also saved us a lot of money.” For Rolls-Royce, obviously, it had the opposite effect.

AI is here to stay and the implications for law firms, especially independent firms such as Boase Cohen & Collins, are huge. A recent report entitled “The Rise of Legal AI: Big-firm Intelligence for Small Law Firms”, produced by global legal research giant LexisNexis Group, outlines the revolution that is taking place.

“AI systems are learning faster, predicting with greater accuracy and performing a wide range of tasks that previously had to be done by humans,” the report states. “AI and machine learning are natural solutions for any knowledge-driven industry with a large amount of information. Data requires standardisation, classification, summarisation and storage – all of which are tasks best suited for AI and machine learning. Exhibiting all of these features, the legal field is an industry that has already begun the transformation that will free up lawyers and employees to do more of what they do best.”

Tasks for which AI can be used include evaluation of documents, legal research, performing due diligence, reviewing contracts, drafting responses, suggesting litigation strategy and even – with access to years of trial data – predicting legal outcomes. In the US, an online platform using AI-powered machines can now help couples seeking a divorce, allowing them to define their “optimal outcomes”, walking them through different modules and assisting with critical decisions. In business matters, AI can be applied to repetitive tasks such as billing and pricing.

All of which is good news for law firms and, especially, the smaller ones. Traditionally, global law firms have always had a manpower advantage, being able to deploy teams of associates to comb through libraries of data. Now, with technology at their fingertips, the smaller firms have the tools to compete.

Cost has always been an impediment to greater use of AI but, as with all new technologies, it becomes less expensive as more competitors enter the market. Further, law firms do not need to bring in their own AI systems as they can hire specialists on a case by case basis, as the SFO did with RAVN.

A greater obstacle is culture. The legal industry is rooted in tried and trusted practices. Historically, it has always been slow to embrace change. But the demographics are changing. As older professionals retire, so millennials – born between 1980 and 2000 – are coming to the fore. Having grown up immersed in communication technology, they will be more accepting of the AI revolution.

To be clear, AI is not a replacement for lawyers in all aspects of legal work. Don’t expect a robot to be formally appearing in court anytime soon! But it does augment, speed up and streamline what we do. The legal industry, like countless other professions, is embracing AI. Law firms that fail to adapt will be left behind.

ArtificialIntelligence PHOTO

With AI technology at their fingertips, law firms can be more efficient and cost-effective.