Startup Law

What does the future of legal services look like?

Automation is coming, whether lawyers accept it or not. 

That was the conclusion of a group of experts speaking at LawAdvisor’s first LawHack, held in Melbourne on Wednesday night.

LawAdvisor legal product manager, Simon McKenzie was joined by Envato legal counsel Peter Tsipas, Lexis Nexis Head of Product Strategy APAC Jim May, Rampersand analyst Eloise Watson and Nest Legal founder Laura Vickers to discuss what the future of the legal profession might look like.

“I think any industry with high margins, that can be replaced with technology, it’s going to happen,” Watson says.

“The industry’s huge, there’s not a lot of tech, and tech could change it. So (venture capitalists) look at it with the eyes that this is an industry ripe for disruption.”

Watson points to the fintech industry as a useful comparison. It has been able to jump ahead of law when it comes to innovation, due in large part to the fact that technology has a much easier time solving problems based solely on numbers. Creating machines that can solve legal problems is much more complex. But it will happen. And sooner than the profession might expect.

“What’s really held law back is this technology hasn’t quite been there. Finance is really easy to automate because it’s numbers. So it’s something that algorithms deal with really well,” Watson says.

“If you look at fintech, (Law) is a good 10-15 years behind that industry and this is a lot to do with the tech involved. So as that catches up, and there’s some really exciting innovations happening right now in natural language processing, I think that’s where you’re really going to see (legal technology) take off. It’ll allow searchable documents, people putting in queries that can be answered by a machine, which will get rid of a lot of the lower level legal work.”

While the law presents technology with some difficult problems, law firms don’t escape responsibility for these issues not being solved sooner. 

“There’s no real imperative for them to fix anything,” Watson says.

“If anything there’s a huge imperative to make sure nothing changes.”

It’s a point picked up on by May, who points to the structure of law firms, and the fees they charge. However like Watson he doesn’t assign law firms all the blame.

“If you imagine legal services globally it must be in the trillions of dollars (of value) as a market, yet legal technology must be in the low billions,” he says.

“The percentage of that value chain that technology delivers must be a tiny fraction of a per cent. That is unlike pretty much any other industry. If you look at advertising or even financial services, those ratios are so much different.

“So what kinds of things are driving that? People talk a lot about the corporate structure and the fees structure that disincentive process change, and the deployment of new technology quickly. I think culture is a huge factor. As (LawAdvisor founder) Brennan Ong, says, lawyers are trained to eliminate risk and protect their clients, and that’s almost the opposite of entrepreneurialism and innovation where you’re trying new things to rapidly move forward.

“If I think about law school and the computer science department at university, they are so far apart that I think it is quite hard for technologists and lawyers to come together and join up, team up, and come up with new solutions to solve problems.”

Tsipas, who is a member of the in-house legal team at Melbourne startup Envato which won the organisational category in the 2015 Lexis Nexis Innovation Index, agrees that the relatively small amounts of lawyers who understand the capability of technology, has made the profession blind to its potential. However he expects a flurry of activity to create a tailwind, that will see law quickly catch up.

“I wonder whether when we speak about automation and artificial intelligence, is it in fact going to, in some ways, make the legal function itself redundant,” he says.

“The way that computers work is basically input, output. If there is an equation where you can sort (a legal problem) out, i.e you query 150 years of precedents and ask what the potential answer might be, do you actually need advice? Because you kind of already know on the balance what the outcome might be.”

Tsipas wonders if the legal profession is missing the point on innovation. Lawyers are holding onto what they think is required, rather than letting go of those tasks that technology is already capable of completing. 

“If we all had computer science degrees, and a sound basis in logic, then we could actually make ourselves redundant, I don’t think that’s too far off.”

Vickers, the founder of Australia’s first online law firm, also wonders whether or not law schools are preparing graduates to tackle the big technological questions currently facing the profession.

“I fear they are not teaching the skills in law school that are needed to bring about that change,” she says.

“I’ve seen quite a lot of disappointed law students, who have really high expectations of a job market that isn’t going to bet there. I think it’s not even about managing their expectations, that they might not want to be a partner in a big law firm one day. But it’s about exposing them to all the the other things you can do with a law degree.”

It’s important to remember just how impactful technology can be when it comes to enabling individuals to access justice. Vickers spent time working at a domestic violence clinic at a community legal centre, and told a story that would be common to community legal centres across Australia. 

“We had a waiting list, we were turning people away or saying, come back in five weeks,” Vickers says.

“Do you know what it means when you tell a woman who needs help with domestic violence to come back in five weeks because the community legal centre was at capacity?”

She points to the legal MVP approach, used by Envato’s legal team, which values providing service as efficiently as possible. Vickers says people attending community legal centre don’t need the “Rolls Royce” legal service. In many cases trying to keep to that standard, doesn't necessarily lead to better outcomes, and results in many more people being turned away.

The potential for those sorts of problems to be solved by technology, and by reexamining the role of a lawyer, makes it an exciting time to be working on legal innovation.

“You’re making legal services available to billions of new people who aren’t served by legal services today, and bringing more rule of law in western markets, but also in emerging markets where it doesn’t exist,” May says.

“And if that’s our stated purpose, and it is at Lexis Nexis, then it’s a great purpose for everyone here, and that’s got to be about the most awesome thing you could be working on."

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