Recent developments in AI technology directly threaten the existence of law firms. Not many are ready for this, writes Ted Dwyer.
Jane Smith, general counsel (Asia-Pac), learns that an executive in her company (let’s call him John) has been arrested in Tokyo for an offence that may require dismissal. The allegation is that at 10.13pm the night before, John punched a male staff member in his office. John is denying the assault charge.
“Lex,” Jane says as she gets ready for work. “Can you please let me know what my legal options are with this John situation?”
“Sure,” a voice replies. “Give me a minute.” Lex is a machine with artificial intelligence and provides Jane’s team with 90 per cent of their legal needs. In 30 seconds, Lex has learned all about the situation by instantly scanning all data available anywhere, including the company’s internal data. In a further 25 seconds, Lex understands all references anywhere to Japanese law and how it applies to the facts.
Precisely five seconds later, Lex says: “Jane, I am ready to give you all your legal options, as well as likely outcomes, right now. But before I do, there is one thing I have discovered.”
“At 10.13pm, John wasn’t in his office. He was unlocking his car in the office car park. The allegations are untrue.”
That’s 10 years from now. Sound fanciful? Hold fire for a moment.
Lex’s grandparent (in AI terms) may well be ROSS, the AI machine that is revolutionising legal research in 2016. ROSS responds to naturally spoken questions with instant research that is faster and higher in quality than human research. Patents software can already predict outcomes more accurately than humans can. Soon it will be possible for software to predict the outcomes of specific courts better than the best lawyers can. By 2030 if not earlier, machines will be able to provide better-quality technical advice to clients than experienced human lawyers. And they will be able to do it at a speed that seems impossible in 2016.
The AI foundation is already in place and the revolution is underway. Still sceptical? Read on.
Most of the innovation in legal technology we hear about has been focused on helping lawyers organise themselves, as well as manage their matters, more effectively. The very rapid advances in eDiscovery, document automation, research, compliance and contract analysis are making these tasks faster, more efficient, less expensive and more accurate than humans. While it is harsh to say and it will take law firms some time to absorb the change, the truth is that the need for junior lawyers in the traditional sense is over.
Law firm partners admit as much in private. But they are far less likely to accept that they and their law firms, too, may be a dying breed. More of that later.
Let’s go back to Lex. What’s often overlooked in legal circles are today’s startling advances in predictive platforms and AI. The objective is to develop technology that not only replicates the operation of the human mind, but works more powerfully than it. IBM, Google Brain and Google DeepMind are just three of several research centres aiming to produce this breakthrough. Using algorithms, predictive modelling, machine learning and data mining, these teams are developing machines that can think and decide for themselves, rather than being programmed to think in a certain way.
A real life ‘Lex’? Most lawyers assume that this change, if it ever happens, won’t exist for a long time. They are wrong. Leading thinkers in AI have already noted that advances in human thought and innovation observe a law of accelerating returns – they become faster as time goes on. In other words, between 2014 and 2021, only seven years, they believe that we will see progress equating to that of the entire 20th century. So yes – at the moment, AI computers may have the total intelligence of a mouse. But it is predicted that by 2030, advances in AI, machine learning and processing speeds will have created a computer more intelligent than the smartest humans. By 2040, only some 25 years from now, we will start seeing the first ‘Superintelligent’ AI systems – with intelligence, reasoning, predictive powers and (some predict) intuitive powers far beyond the capacity of human beings. And the advent of the ‘Internet of Things’ means that the ‘Big Data’ available for these computers to use when behaving will be far richer, complex and multi-faceted than the human mind can manage.
There’s much noise at the moment about strategy and client service in the legal sector. And there’s a focus on new law firm structures in a post-leveraged legal world. But this all assumes a future where clients actually need and use law firms. If Lex is only 10 -15 years away, there may be no need for law firms, or at least not in the sense we understand them now.
AI isn’t just pointing the law in a new direction. It is rewriting the map. In 2016, lawyers need to identify areas of legal practice where AI can’t compete effectively with humans and to build their businesses around these areas. This requires a total overhaul and transformation of the legal business model.
As for Lex? Well there’s a happy ending to this story. You see, he was created by a law firm. The partners saw the writing on the wall and re-invented their business as AI legal specialists back in 2018. They launched in 2022 and have now licensed Lex to every major corporation in the world.
Of course, many law firms refused to change and slowly died. Makes sense. After all, there isn’t much need for a law firm that no one needs to use. As Lex will agree.
Ted Dwyer is a legal sector consultant at Ted Dwyer Consulting, specialising in strategy, innovation, business development and profitability. His clients include leading law firms and in-house legal teams.