LegalTech Changes How Lawyers Work
LegalTech will massively influence how lawyers work. Some even suggest that technology—especially the rise of AI—will render many lawyers obsolete. Richard Susskind predicts that traditional lawyers will in large part and in the long term be “replaced by advanced systems, or by less costly workers supported by technology or standard processes, or by lay people armed with online self-help tool” (Richard Susskind, The End of Lawyers, 2008, 2).
There is no doubt that LegalTech will rapidly automate, computerize and streamline manual tasks and, thus, will reduce the work for (human) lawyers in various evolutionary steps. LegalTech effects on legal work flow will vary widely, according to the type of work that lawyers perform. The effects will be felt by big law firms to solo practitioners, from litigation to M&A, from associates to partners, from task to task.Whether and to which degree a task could be automated by machine intelligence depends on how structured and repetitive it is, and whether contingencies are predictable and manageable. Tasks which require capabilities such as creativity and sensing emotions (emotional intelligence) are difficult to automate. It will, therefore, be hard to automate tasks like, for instance, investigation, legal writing, advising and communicating with clients, court preparation and appearances, interview claimants to get information related to legal proceedings and supervise activities of other legal personnel. When legal work cannot be automated, clients will still call upon a traditional lawyer. However, the speed with which advances in AI and machine learning develops will continue to challenge our assumptions about what is automatable.
In our view, low-level and repetitive tasks, such as document management and review, billing, filing, and accounting, for which genuine lawyering is hardly required, will be automated or outsourced, soon.
It’s likely that client-contactless, commoditized and process level work will be industrialized using LegalTech. Many other tasks will be partly automated, including document drafting, due diligence on deals, legal research and legal analysis. In advanced LegalTech, we will see that even areas of the legal industries which at first seem difficult to automate will be partly automated gradually.Owing to the rise of machine intelligence, lawyers will have the opportunity to shift their focus from mundane and repetitive work to the more meaningful, creative and high-value tasks of legal practice. Some of these task may even be completely new. LegalTech offers the chance to move routine work to the machines. Lawyers will be increasingly able to engage in the analytical, creative, and strategic parts of legal practice, i.e. the work of the intellect. In other words, a successful lawyer of the twenty-first century will be a lawyer who knows how to harness LegalTech to do the mundane tasks of fact-gathering and filtering, and then apply his unique skills to frame issues and arguments, and represent a subtle point of view that
LegalTech, alone, cannot provide. It is time to re-elevate the legal profession, as the work behaviours and routines are required to change.
The impact of LegalTech on the legal profession should not be viewed as a battle between machines vs. lawyers. As already pointed out, LegalTech should be regarded (at least for the time being) as an enabler which helps lawyers, not as a replacement of real lawyers who advise people. There will be a new partnership between computers and people. This does not mean, however, that lawyers will continue to work as in previous years. LegalTech will transform the job description and behaviours of lawyers, amend routines and processes and will require new forms of organizational structure upon service delivery. In short, LegalTech (and other drivers of change) will alter the legal profession in its current foundation.
Lawyers will need to understand the technologies, methodologies and concepts behind LegalTech, as the ability to use LegalTech will be a rapidly increasing competitive advantage. They need to comprehend its benefits and risks and they also must understand how the different technologies and tools can be used to guarantee the best service results with a competitive price. It will not be enough for a lawyer to harness legal knowledge in the future. Lawyers need to develop a new mind- and skillset to ensure that they are able to render their services in an efficient way.
To develop this new mind- and skillset, lawyers need a basic understanding of coding and the underlying techniques and methods deployed in legal described as described above. They should be able to understand what code is and how it fits legal design. Lawyers should know which LegalTech tools exist and to which extent they might be deployed in their daily work. This primarily means to understand that legal work is not “monolithic”. It is possible to decompose or disaggregate legal work into various tasks without undermining quality. LegalTech will require a new working attitude that fosters the decomposition of legal tasks. Lawyers have to discern whether and to what degree each task should be computerized, standardized or automated or really needs a handcrafted solution.
As legal task will be decomposed, there will be new ways to source legal work. Lawyers will be confronted with third party providers willing to offer their services in areas which are prone to standardization and automatization. They will put price pressure on the market. As the standardization and automatization of legal work continues, third legal parties will take on tasks which have been “lawyer-exclusive” in the past. The tightened competition and price pressure exerted by clients will lead to new pricing models which will hugely influence how lawyers work. In light of automatization, increased competition by third-party providers and price pressure, the market will most likely no longer tolerate the inefficiencies of the traditional law firm models and lawyering.
The current prevailing pricing model (billable hour approach) is inherently in conflict with maximizing efficiency and fostering innovation in law firms. Under a billable hour approach, a law firm would lose revenue if certain services are rendered in less time. Clients will insist that the fees bear a more reasonable relationship to the value provided. As a result, law firms and lawyers will introduce new pricing models which will replace billable hours with fee arrangements based on the value delivered, i.e. the outcomes. Therefore, future pricing models will be based on outcomes, such as fixed fees for an entire engagement or specific tasks.Pricing models which focus on outcomes will force lawyers to become more efficient. One means to become more efficient could be the use of LegalTech. However, there are more techniques and methodologies which could be borrowed from other industries. Project management will become important in law firms. A legal project manager would be responsible for leading, guiding and monitoring the business side of delivering legal service. It can be a separate role to the lawyer that actually does substantive work or a new skill set that most lawyers need to bring to the table in the future. Possible responsibilities and tasks include, among others, developing a project plan (including a work breakdown structure and budget), monitoring the matter against timelines, deadlines, and budget as well as ensuring sufficient communication with the client and matter team.
In addition, a range of new opportunities and new careers for people trained in law will emerge due to LegalTech (cf. Richard Susskind, Tomorrow’s Lawyer, 2013, 109 ff.). Standardized and computerized legal services will require “legal knowledge engineers” to organize and model complex legal materials and processes. These lawyers will develop legal standards and procedures in organizing and representing legal knowledge in computer systems. Other individuals, labelled as “LegalTechnologist” by Richard Susskind, will bridge the gap between law and technology.
The “LegalTechnologist” is trained and experienced both in the practice of law and in the profession of systems engineering and IT management.In order to ensure that lawyers are well equipped for the challenges imposed by LegalTech, legal education needs to amend its curriculum. Many universities and law schools are ill-equipped to train their students on LegalTech and on the applications that are already available. Law schools have to revise their curriculums as part of a larger interdisciplinary approach. They should, for example, introduce LegalTech lectures, courses, clinics, internships, conferences and workshops which provide the theoretical and practical knowledge for the future jobs describe above. In particular, universities would need to train future lawyers on how to more be effectively and efficiently in delivering legal services.
As LegalTech will have a profound effect on the future of the legal profession, it seems wise to embrace it now, so that it can be a tool as opposed to an impediment. If LegalTech is understood as an enabler and as a “partner” for lawyers, it might be easier to embrace LegalTech tools and the changes that follow. Lawyers and law firms which become expert in combining human expertise with machine intelligence will lead the way to a more efficient and affordable future. The focus should not be on the question whether lawyers are replaced by robots but how lawyers may proactively use LegalTech and other innovative methodologies to automate mundane and repetitive legal work to be able to focus on the analytical, creative, and strategic parts of the legal practice. LegalTech will not only revolutionize the way lawyers work, but make their work more enjoyable.
Liquid Legal Context
By Dr. Dierk Schindler, Dr. Roger Strathausen, Kai Jacob
Bues and Matthaei make an important point right at the start: very easily, legal tech gets boxed into the corner of specific, maybe the most broadly known solutions, e.g. eBilling, contract management etc.
This approach bears significant risk: first, it obscures the view to many other new solutions that emerge at ever faster pace in legal technology, and secondly—and even more importantly—it prevents us from looking at the bigger picture behind legal technology, i.e. its force to fundamentally change the industry.Against that background, Bues and Matthaei point out a distinct effect of adopting legal tech: It might “just” improve the world for lawyers, meaning it might only automate certain tasks that lawyers had to spend (more) manual time on before. Alternatively, it might introduce true innovation, by challenging and completely changing how legal services are being delivered. The broad landscape in which legal tech is having an impact, already today, does inevitably lead back to the question: How does legal tech change the job of a lawyer in the industry?
Too often, this gets discussed from a defensive position: “machine intelligence is taking my job away”. Bues and Matthaei create a broader and more balanced view, also describing the opportunities. Lawyers will have the opportunity to shift their focus from mundane and repetitive work to the more meaningful, creative and high-value tasks of legal practice, i.e. the work of the intellect.
With that view, the silver lining emerges of a lawyer serving as a strategic business advisor, as an orchestrator of the various aspects of delivering legal services provided by the different players in the legal industry. If legal tech is the enabler of running legal with a business mind, will legal tech also be the enabler to run legal with business metrics? Pauleau, Collard and Roquilly answer this question with a clear and convincing “yes” in their upcoming article.
Dr. Micha-Manuel Bues is Managing Director at Leverton, a LegalTech-company with offices in Berlin, London and New York which is specialised in data extraction from contracts. From 2013 to 2016 he worked as a lawyer at the international law firm Gleiss Lutz. He studied law at the universities of Passau, Bonn and Oxford and wrote his doctoral thesis at the University of Cologne. For many years he has been engaged in the theoretical and practical interfaces between law and technology and digitalisation trends in general. He runs a blog on the subjects of LegalTech, Legal Innovation and Legal Start-ups (www.legal-tech-blog.de).
Emilio Matthaei is CEO of LEVERTON. As a passionate data strategist, entrepreneur, ex-banker and researcher, Emilio revolutionizes how individuals work with data and documents. With LEVERTON, he brings innovative technology to various industries—LegalTech, PropTech, CRETech, FinTech.
LEVERTON develops and applies disruptive deep learning/machine learning technology to extract and manage data from corporate documents in more than 20 languages. Global clients from the legal, financial, and real estate sectors optimize their contract management significantly and process transactions faster. Asset documentation with an underlying face value of more than ˆ40 billion is managed with LEVERTON's smart data technology.
Clients such as Bilfinger, Clifford Chance, Deutsche Bank, Freshfields, Goldman Sachs, JLL and Strabag trust LEVERTON's smart data solution.
Before LEVERTON, Emilio spent 6 years with Houlihan Lokey and Goldman Sachs in Investment Banking in London. He was involved in >20 financial transactions (incl IPOs, M&As, Capital Increases and Restructurings).
Emilio studied Economics and Management in Bonn and Leipzig and graduated with a PhD (summa cum laude) in the field Strategic Management. He wrote two books (“Strategies for Innovators” and “The Nature of Executive Work”) and spent a year as Visiting Researcher at the University of Oxford.
Contact LEVERTON at www.LVN.com.