Two Technologies That Will Change New Lawyers’ Lives Forever

Two Technologies That Will Change New Lawyers’ Lives Forever

By David Gingell, CMO, Seal Software

Traditions are a hallmark of the legal profession; early adoption of technology is not one of the traditions. But competitive pressure is forcing a change and legal teams are turning to AI and smart contracts to drive value. Young legal guns are being drawn into this whirlwind, changing their lives and career paths.

I think most legal professionals, whether in private practice, in-house or in the public sector would agree that the impact on technology in their professional lives has been nowhere as significant as in their private lives. As a profession, the law has been fairly resolute in avoiding early adoption of technology. In the terms of the technology adoption lifecycle as defined by Geoffrey Moore in ‘Crossing the Chasm’ one might say, the law has been a ‘late adopter’ to date.

However, that is changing – and changing fast – and there are two developments in computing that are starting to have a significant impact on the lawyer of the future: artificial intelligence (AI) and smart contracting.

The Impact of AI 

The output of lawyers’ work, especially those in-house is, as often as not some type of contract. Whilst verbal contracts can potentially be admissible, generally contracts are written down, and for the most part in formal documents. A contract of course could be agreed over an email exchange or scribbled and signed on a beer mat, but usually it is instantiated in a Microsoft Word or PDF document these days. In the last five years, Machine Learning (ML) has entered the common consciousness as part of the more general awareness of AI.

Whilst both those terms have been around in computational science since the 1950s, recent developments have brought them in the forefront. ML uses algorithms to classify text documents (amongst other document types) and, together with other key AI technologies such as Natural Language Processing and Deep Learning, can perform deep analysis which can unearth insight often buried in those contracts.

The legal data stack, it’s only getting bigger and bigger…

Ten years ago, it would not have been possible to analyse any significant volume of contracts for specific words, sentiment or inference except by manually reading them, which is both inefficient and expensive. However, developments across the technology landscape, particularly in computer processing speeds, memory and storage is now allowing the deep analysis of many thousands of documents by computers.

Availability of low cost processing environments (such as Platform-as-a-Service) from the hyperscalers like Amazon Web Services and Google Cloud has meant that it isn’t necessary to have private data centres and multi-million-dollar hardware environments to get access to this technology. This is allowing legal ops departments, law firms, compliance functions and others to use these advanced techniques to ‘look into’ hundreds of thousands and even millions of contracts in a cost-effective manner.

And so, the legal profession finds itself in an unfamiliar position: it is moving from being a late to an early adopter in its use of this type of narrow AI – contract analytics. Law firms are implementing these technologies to speed up document reviews for their clients and in-house legal and other functions that need to know what is in their contracts such as GRC (governance, risk and compliance) and procurement. Notably, legal professionals are adopting these technologies with alacrity.

So those in the legal profession are necessarily needing to become more technology literate, and that is a good thing. There is no doubt that this is a ball that is going to continue rolling. Most law degrees are traditional and very few involve a technology component. That means that few experienced lawyers have had any formal education in computer science and they are having to learn on the job, so to speak. But that will change and is, in fact, slowly changing today.

Just as most of the traditional degree courses have evolved to include technology as a core component (like engineering, biomedicine and statistics), so will law. In the future, a law degree will need to cover the basics of AI and how it can be applied to all branches of the law. Without doubt, the skill-set of the law student will need to evolve. A basic understanding of algorithms and the creation of models will be required. Sure, jurisprudence will remain a bedrock, as will all the core elements of a law degree as now, but over the next decade students will need to be technology literate if they are to have a fulfilling career in law.

Smart Contracting 

The concept of smart and intelligent contracts has been around now for a few years and we’ve written extensively on it. There is no question that encoding certain KPIs and clauses on a blockchain is happening. There are many examples of smart contracts coming to market. Yes, there are issues and limitations which we have pointed out, but the idea of taking a clause, turning it into some computer code and then letting the blockchain control its execution is taking hold.

A new world for contracting.

However, a typical commercial contract, which may run from tens of pages up to thousands of pages, has usually been written by a legal professional with many years of experience of negotiation and in the deft art of writing it so it is water tight, at least from their viewpoint. The reality is that taking one of those contracts and retrofitting it to be a smart contract, replete with Java Script code and connections to external oracles, is extremely unlikely to be possible.

Does this mean the promise of smart contracts is dimmed, with only the simplest of contracts being able to be encoded on a blockchain? I don’t think so, and here’s why. Smart and intelligent contracts will require a different mind-set in the negotiation, redlining and outline construction for the two parties. Existing contracts will be legacy and left as they are.

Going forward, contracts will need to be constructed with encoding in mind. The grey areas in clauses will need to be negotiated out, as much as possible. Simple contracts will need to be very tight so that there are no interpretations. Those that simply cannot have every clause encoded will need to have their key economic variables encoded (like start dates, end dates, monies owing etc) and pointers to those elements that are not, held off-chain.

So, what does this mean for the new legal professional? Well firstly it means that getting a basic understanding of technologies including AI and blockchain is going to prove worthwhile. Secondly, it means that the current ways of constructing elegant contracts will change and new techniques will emerge to enable lawyers to more efficiently access and process much needed information for their legal analysis.

Data Scientist meets Legal Operations

AI and blockchain are two innovations that are dragging the legal profession from late to early adopters. An awareness of the power of smart and intelligent contracts and of coding methodologies will become a requirement in the third decade of the twenty-first century. For new associates and junior lawyers getting educated on these developments in legal, AI and blockchain is imperative and will separate the winners and losers in their intense career races.


This was a Sponsored Thought Leadership piece by legal AI contract review specialists, Seal Software.

About the author: David Gingell joined Seal in February 2017 after 25 years of experience in hi-tech sales and marketing. His most recent position was as CMO of TeamViewer GmbH, the remote access and control software specialist. Prior to that role he was the VP Marketing for EMEA for major tech brands EMC, Adobe and NetApp over a ten-year period. Gingell was also an early employee of Documentum which was later acquired by EMC.

He was a key player in the formation of the Enterprise Content Management market, and helped Documentum reach the number one vendor position prior to its acquisition. Early in his career, he held technical and sales roles at Ingres and Oracle. He holds an honors degree from the University of Wales and an MBA from Henley Business School, UK.