Industry analysis from iManage: Keep an AI on it by Peter Wallqvist
This article was also featured as an industry analysis in the December 2017 issue of Briefing. To read the issue in full, download Briefing.
Artificial intelligence (AI) are the words on everyone’s lips these days, and with good reason. Whether it’s providing us with better shopping recommendations, being used by voice-enabled personal assistants to answer our weather, news or any other questions, or indeed recognising people in the photos you post on Facebook, AI impacts our lives practically every day. However, many lawyers believe that they can wait to figure out how to incorporate AI into their firms’ legal operations. They think that, while AI can beat people at Jeopardy, the technology is still not ready to help a firm become more efficient, improve employee satisfaction, or create new value for their clients.
They are wrong. To cite a single example of how AI is transforming the legal market, AI-based ‘robots’ are being used by law firms today to classify, review and extract key terms from legal documents. While the robots need to be ‘trained’ by humans to conduct these basic cognitive tasks, once this has taken place they can complete the tasks exponentially faster than a team of lawyers, and with fewer errors.
Using robots to organise, summarise and extract information from thousands of contracts, leases or other legal documents enables firms to address many of the key business challenges they face today, including how to address client demands for more predictable billing, how to attract and retain legal talent, and how to create opportunities to deliver more value to their clients. Firms that want to keep up with their competitors need to develop an AI strategy today – or risk seeing their clients move to firms that have one.
The hour has come
One of the most compelling reasons for firms to develop an AI strategy is that AI can address growing client demands for more predictable billing arrangements. Firms are understandably hesitant to move away from hourly billing and instead provide fixed prices on projects where it might be difficult to assess the amount of work that is required. In particular, with many such projects, it can be hard to determine the time it will take to classify, review or extract the terms from a large number of documents. However, by using an AI-based robot to quickly and accurately complete these document-classification, review and extraction tasks, law firms can minimise, or even remove, the impact of a difficult-to-estimate variable from their project billing calculations. Perhaps just as importantly, they become more efficient, and can bill their clients more for highvalue strategic work, and less for low-value mundane work.
Keep the talent – and keep it happier
Another reason for law firms to develop an AI strategy is to improve recruitment and retention of legal talent. The document classification, review and extraction tasks that AI-based robots can be used for are frankly tedious – and if the number of documents is large, can take weeks, or even months, of mind-numbing work. Most lawyers didn’t enter the profession to do these types of tasks – they want to work on interesting projects that require creative, strategic thinking. By using a robot to complete the more mundane, often boring tasks, a firm will be more attractive to potential hires, and lawyers currently at the firm will be less likely to leave for a firm that does have such AI capabilities. In addition, lawyers at the firm will be doing more meaningful and fulfilling work, and thus they will be more likely to put even more thought and effort into their jobs.
A third reason firms need an AI strategy is the opportunity it provides to offer more value to clients. By cutting the time it takes to classify, review or extract terms from documents – from weeks or months to days or even just hours – projects that might have been cost-prohibitive before become realistic. For example, if a law firm sees that one of its clients has tens of thousands of employment contracts, it could now offer them an “employee contract analysis” to assess risk and compliance issues in these contracts. Without AI, the time required to review all these employee contracts would have made the project too expensive for the client. However, with a robot able to review all the documents, and lawyers only focusing on interpreting the results, the project’s price is low enough to justify the expense.
In the legal profession, AI is no longer on the horizon. It is here today. Those firms that have recognised this and implemented AI strategies are already meeting client demands for more efficient and predictable billing, improving employee recruitment, retention and morale, and creating new opportunities to deliver value to their clients. Those firms that fail to develop an AI strategy will miss out on these benefits – and see their clients and lawyers leave for firms that understand how that AI is transforming the legal profession.