Hot Topics and Hopes for ILTACon 2017

This week it’s ILTACon 2017 in Las Vegas, the largest legal tech event in the US and a bellwether for new trends and the showcasing of new technology and ideas about the sector.

Artificial Lawyer has a couple of Guest Bloggers who will be sending back their impressions of the event (see below), but here’s a few thoughts about what may be the hot topics of the conference, whether discussed on the conference stages, or at the bar afterward.

A Lot Has Happened in Legal AI Since ILTACon 2016

Last year there was a lot of talk about AI, but just 12 months ago there was the impression it was still something that would happen ‘at some point in the future’.

A survey on legal tech use for ILTACon 2016 found that just 2% of firms sampled were currently using AI systems in some way, though only 33 ‘Large’ firms responded to that question. Moreover, it wasn’t totally clear what the ‘AI’ part of the question referred to. Was this natural language processing (NLP) doc review, legal research via a system such as ROSS Intelligence, was it a rules-based expert system such as Neota Logic, or did it refer to some of the better e-discovery software out there?

So, the first point to note here is two-fold: ILTACon 2017 will probably see evidence of broader adoption of legal AI systems in the US, but it will also most likely see a more detailed perception of what AI has on offer. I.e. Legal AI is just an umbrella term, which applies to many different applications and use cases.

Expect Blockchain and Smart Contracts to be Big This Year

While a lot of attention will be on AI applications, there is another major legal technology that is likely to be a very hot topic: smart contracts and the use of blockchain technology.

There have already been two international legal smart contract/blockchain consortia or open platforms launched in the last couple of months. A third, involving IBM, will be announced at ILTACon on 15th.

The first two are:

OpenLaw – US and Swiss project, OpenLaw, which is a new smart contract platform that will allow lawyers to make legally binding and self-executing agreements on the Ethereum blockchain. The OpenLaw project is the brainchild of US-based Aaron Wright and David Roon, and has been supported by ConsenSys,  a Swiss blockchain venture production company. Wright is an Associate Clinical Professor at Cardozo Law School and director of the school’s Blockchain Project.

The head of the OpenLaw group, Wright, has also just announced the news that 14 law firms and academic bodies have joined the Enterprise Ethereum Alliance (EEA)’s Legal Industry Working Group (see story.)

The Accord Project – US-based legal tech pioneer, Clause, is co-launching the world’s first smart contract consortium, alongside tech company Clio, blockchain platform Hyperledger and technology specialist law firm, Cooley, among others. The goal of the ground-breaking Accord consortium is to help bring together key players in the world of smart contract technology, blockchain and legal tech companies in general so that ideas and formats can be shared across the industry.

The third launch in this area will be called the Global Legal Blockchain Consortium. Its purpose is ‘to improve the security and interoperability of the global legal technology ecosystem’. Brian Kuhn from IBM Watson Legal is part of the project, along with tech experts from US law firms, Orrick and Baker Hostetler.

Smart contracts and the use of blockchain technology in the legal sector is a bit like AI, in that it is not new in concept, but rather has faced an initial adoption challenge. However, with three consortia launching in the space of two months it seems likely that the end of the beginning is here and that the use of smart contracts and blockchain will start to see some substantive uptake.

And for readers who are wondering what the fuss is about, the key points are that smart contracts have several features that today’s paper contracts do not.

  • They can ‘self-execute’, i.e. parts of the contract can be coded and placed on a blockchain that activates certain clauses when the right information is received.
  • They can be linked to other data sources, e.g. a smart contract on a blockchain could be made to change the value of an asset depending on ‘news’ it receives from the stockmarket.
  • Blockchain tech should, in theory, be more secure than lawyers constantly sending emailed information to each other.
  • The tech should also prevent fraud, especially in areas such as transport and shipping, as contractual information cannot be changed without all permissioned parties seeing it.

And that’s before we even get into the area of using digital currencies in conjunction with smart contracts. But, this will surely be a topic of conversation at ILTA as well.

Legal AI Companies Come of Age

While a couple of years ago most legal AI companies were seen as garage start-ups, even though in reality many were five or more years old even then, the situation today is that as adoption grows they are growing too, in terms of staff hires, in revenue and reach.

We have also seen some important merger and acquisition activity. One of the two most famous deals was the merger of document management company iManage with UK-based legal AI pioneer RAVN. This deal has huge potential as it weds together top level AI tech with a company that is well established across the legal sector already. They already seem to be making waves and signing up new clients to AI-driven products.

The other key deal was the purchase of legal AI litigation analytics company, RAVEL, by LexisNexis, which had previously also bought up Lex Machina. Lexis has also announced the creation of an NLP-driven research platform, Lexis Answers.

So, there is another theme: legal AI moving from the fringes to front and centre of the legal tech market.

Augmented Lawyers

Probably one of the best things that has happened in the last 12 months is the end of many of the clichés about the use of AI. Much as Mark Zukerberg and Elon Musk have been fighting it out in public about whether AI is a threat or not, the legal sector has also been trying to decide if AI is a help or a hindrance.

It seems that at last the market is coming down on the side of seeing AI as ‘augmenting’ the work of lawyers, not replacing real legal advice by humans who look you in the eye. The end of lawyers cliché is finally starting to feel a bit like an old pair of flared jeans, amusing to consider, but not taken seriously.

But, if AI is a help then what about the billable hour? That is a good question. But, let’s turn it around. Consider this:

  • Whether the market likes it or not, fixed fees and capped fees are only going to grow. Better analysis of legal bills (in some cases using AI tech to do this) is helping companies realise that not all work is bespoke and can be given a ‘standard price’ which the law firm then needs to try and meet. Hence AI helps to cover the process work that will be part of the job.
  • If your peers are offering clients AI-driven services and you are not, then regardless of hourly billing issues, you’ll not look good. So what if you can bill by the hour for research, for example, if the client doesn’t really want to pay for that research? Again, AI is the answer.
  • Whether you are fixated by hourly bills or not, AI will still give your firm a productivity boost. In short, more can be done. More client matters can be taken on. The overall flow-through of work will be greater using the same number of lawyers.

And if a firm is embracing fixed fees for parts of the work it does, well….then the use of AI should be almost implicit, as to do otherwise is simply to add unnecessary costs and cut your own margins.

But doesn’t this mean the end of lawyers……No. It may well mean a reduction in paralegals and it may also mean that law firms hire a few less associates, at least ones they are doubtful will progress very far and instead will be used mainly as ‘cognitive leverage’.

Law firms may in the future go back to the hiring policies they had before the rise of the paralegal came about, i.e. hiring young people who look like they may have, or could develop, the client-handling ability to become equity partners and true, trusted advisers to clients. And is that a bad thing..?

Hopes For ILTACon 2017

Artificial Lawyer’s greatest hope, and it seems very likely now, is that adoption of legal AI tech is no longer seen as an experimental subject, but rather just as central to any law firm as having a document management system or an email server.

Part and parcel of this is seeing the value of ‘legal data’, which can now be analysed via AI systems using NLP. I.e. this huge mine of information that every law firm has and every client’s inhouse team also has, which was impenetrable to computers, but is now ‘machine readable’. And when that happens amazing things can happen too. In this respect AI tools getting adopted is just the beginning. The real win is lawyers seeing that they are sitting on a mountain of value that they never even noticed before.

Another hope is to see a broader acceptance of how many different applications of AI there are in the legal sphere, from research, to compliance, to document generation and then the rules-based systems and the list goes on. And there is much more to come. The legal AI family will keep growing in scope and invention.

And finally, add this to the promise of smart contracts and we have a legal technology sector on the cusp of enormous change. Have fun everyone at ILTACon 2017. Can’t wait to see where we’ve got to by ILTACon 2018.

Enjoy!

[ Alicia Ryan (@LexCureus ‏) of Fenwick & West and Matt Golab of Gilbert & Tobin have kindly offered to be Guest Bloggers for the ILTA event. They’ll be sending back their impressions of the key sessions. Look out for them! ]

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