Artificial Lawyer asked a range of people from across the sector the following question: Please tell us about one prediction / expectation you had that never materialised, and one that did – and why you think it turned out that way.
Here is what they said. Part 1, featuring many other market experts, was published yesterday. Enjoy.
Jerry Levine, Chief Evangelist, ContractPodAi
What didn’t materialize:
I expected to see more consolidation in the legal technology space, but instead, we’ve seen a bigger shift toward platform solutions. This has created more room for everyone to work together and the growth of end-to-end solutions and portions that can plug into such solutions. The ‘enterprise-ification’ of legal technology vendors that have recognized the value of the solutions for contract lifecycle management (CLM) and other items that can be used across the enterprise will likely continue into the new year. In addition to the lack of consolidation within the legal technology space, we haven’t seen legal departments invest in new technology as much as initially planned for 2022, which is not surprising due to the current economic landscape. With law department leaders forced to reconsider their technology budgets in light of the recession, legal leaders were inhibited from investing as much as they maybe should’ve in new technology.
What did materialize:
As the idea of a hybrid work environment became even more concrete across industries and for legal teams in those industries, we saw widespread adoption of new tools that supported hybrid work. Technology has not only helped with productivity, accessibility and collaboration with colleagues remotely, but it’s also assisted in reducing employee burnout and stress. This is another trend that will continue into 2023 as our strange and confusing employment environment continues. It’s a complex and competitive job market, and businesses and legal will be better equipped to attract and retain talent in the new year by making smart investments in technology to help teams avoid burnout and stress.
Helena Hallgarn, VQ Virtual Intelligence + Standards Monitor
I thought we would move away from the billable hour much more than has happened so far. The reason for this might be the lack of standardisation. So far – at least here in Sweden – we haven’t really started using standards such as SALI Alliance to standardise how we define legal matters. And if we cannot agree on these definitions, we cannot compare the cost between different suppliers. This is a true obstacle towards more fixed prices.
Olga Mack, VP at LexisNexis and CEO of Parley Pro
I envisioned, hoped, and dreamed that many more talented, mission-driven, enthusiastic professionals would enter the field of law by now. After all, the rule of law and civil society are mission-critical for a functioning democracy and peace. Law anywhere – private or public sector, in a country or organization, on the streets, or at home – is law everywhere. Law is a public good. All multi-talented, diverse hands-on-deck is how we get there in our lifetime. In 2022 we saw three powerful and traumatic examples – the war in Ukraine, the Iranian women crisis, and the fall of FTX – of what happens when lawlessness is the norm. It is simply not enough for lawyers to do their best modernizing and digitizing law and legal experiences. We as legal professionals must proactively invite other professionals to make the law more accessible.
The great news is that some key tech advancements are ahead of schedule and market expectations. Specifically, at the beginning of 2022, many expected meaningful AI/ML progress in three to five years; it was widely regarded as an optimistic expectation. However, change is arriving and it is practically here – significant tech progress was recently made, and more is coming. In the classic Gate’s Law manner, we underestimated the change that occurs in the long term. So yes, bring popcorn to watch the world change, including the practice of law. But also bring your open mind and put your active learning hat on as new tools will emerge, some skills will become obsolete, and new skills will be required. Finally, remember that change is not always easy, even when exciting and promising. If you lead a legal team or department or provide services, make sure everyone joins and fully participates as the practice of law changes. After all, the change is only good when the benefits are shared with everyone.
Richard Mabey, CEO, Juro
As a business leader, I had an expectation that the collapse in market sentiment and investment over summer would mean that lawyers would struggle to find time for legal tech projects. What we found instead was that the efficiency gains that prospective customers were looking for from Juro went from ‘fairly pressing’ to ‘absolutely mission-critical’ – if there is existential strategic risk to the business, the last thing a GC wants to be worrying about is routine paperwork that anyone could do. Just automate it and save your headcount asks for higher-value work.
Looking inwards for a moment, one prediction that turned out to be right – thankfully – is that the flexible ways of working we were forced to adopt during COVID are here to stay. Instead of forcing people back to the office, we kept things choice-first, and offering that flexibility both in terms of existing employees and also the new execs we hired has been great for our culture and employee satisfaction.
Michael Grupp, CEO, BRYTER
It looks like I was right that in-house legal teams will find use cases that can be solved through automation and that lawyers can provide self-service support towards their organizations for standard requests that are coming in frequently. And it is true that law firms develop some of those solutions for their clients. So legal teams do want to change, and they are interested in doing this themselves, with their own technology.
But I was wrong about who is doing the building: No Code enables literally everyone to build, including the lawyers in law firms and in-house. In the beginning, we put a lot of effort into user experience and the functioning of our platform so that they could. But it turned out that for being serious about building digital solutions, it is a full-time job of someone fully owning it. Especially for more valuable use cases, it is the legal engineers, legal ops and innovation teams that are driving development. Sure, lawyers are involved, and it is great if they can have an active collaborative role, but real change still involves specialists. And we learned that these builders are not hesitant to use powerful features, so our product direction was quite impacted by this.
Peter Baumann, CEO, ActiveNav
One expectation that did not occur was An End to ‘User-Centric Compliance’. The risk of data spillage has only grown more acute (and the consequences more dire) as the broad adoption of the ‘work from anywhere’ movement continues to present a host of new security challenges. I would imagine everyone in the industry knows the heavy burden of data spillage risks.
Heading into 2022, I had hoped that corporate legal departments would take a larger role and work hand-in-hand with their IT teams on prevention methods that will keep their organization’s data secure, prevent legal ramifications and reputational damage, and avoid fines. However, thus far and despite the many newsworthy breaches, we continue to see a heavy reliance on user-based tagging for managing compliance. With the massive amount of data being produced, this is simply no longer feasible and surely inadequate.
Why is user-based tagging still a main pillar of compliance? I can surmise that it’s a combination of the following:
- Lacking centralized software to do it efficiently
- Lacking designated employees whose sole job is to manage compliance of sensitive data
- Other priorities consistently pushing this ‘more difficult’ behemoth initiative to the back burner
Of course, one can always point to a deficiency in leaders who either recognize this imperative or are willing to wrestle with how great a pivot non-user-based compliance entails.
Tim Pullan, CEO, ThoughtRiver
In 2019 I predicted we would see less talk about ‘AI’ and more focus on real challenges the legal services industry is addressing – ‘automation’ and ‘digitisation’. Actually, I was completely wrong. It’s still about the AI and I think that’s because what we can now do is simply way beyond what we thought possible in 2019 and it’s going to go a lot further still. Even as an insider I am continually surprised.
In the same year I predicted large new players entering the market and that’s now happening with companies such as ServiceNow turning their attention to legal process. That was easy though.
Horace Wu, CEO, Syntheia
I have always been bearish on blockchain technology as applied to the legal profession. I expected progress to stall because there are, in my view, no real problems big enough or painful enough in legal which could ONLY be solved by blockchains. So far, I have not seen much traction in blockchain technologies in legal, and I think we will see even less of it in 2023.
On the other hand, as much as I was bullish on AI and NLP technology, I was not bullish enough! ChatGPT and recent advances made generally in the NLP field are staggering. Legal is seeing the tip of the iceberg. There are so many brilliant data scientists and engineers working on AI and NLP problems (e.g. look at the sheer number of papers showcased at NeurIPS this year), that even if only 10% of these advances are relevant to law, we will see a massive uplift from this class of technology. There are still some hurdles to the adoption of this class of technology in law (e.g. the security of data and the perception of security), but these are adoption problems that will be overcome in 2023 – 2025.
Shilpa Bhandarkar, CEO, CreateiQ, part of Linklaters
Going back to 2020, I had predicted that innovation was going to be all about the ‘people’ piece of the people-process-technology triangle, with an emphasis on design thinking. Sadly, while there has been some interest and focus on this area, I don’t think mindsets have changed in any material way in recent years – at least nowhere as much as I had hoped. I suspect partly because it is difficult to measure the ROI of a change in approach (v. the introduction of a new process or tool), and partly because people still generally associate design thinking with only visual design.
On the flip side, I had also predicted that data analytics and technology tools would serve as enablers to a differentiated customer experience for our clients and our lawyers. I think this one is definitely playing out in the industry – slowly but surely. The focus on automation and efficiency, combined with the raft of repapering triggered by regulatory changes (e.g. CSA repapering, IBOR reform, Brexit etc) and a post-pandemic acceptance of more digital ways of working have all played their part in enabling that change.
Serena Wellen, Sr. Director at LexisNexis.
Two promising technologies that did not materialize in 2022 were the metaverse and blockchain. With the pandemic forcing people to spend more time online for work, academic and personal use, I had hoped to see significant advances in metaverse development. Despite billions of dollars invested in R&D, the metaverse still has not gotten much traction, user engagement or better experiences.
Similarly, the blockchain has failed to deliver significant value to the legal industry in 2022 due to limited applications and legal use-cases. Even for smart contracts, the blockchain has a number of technical restrictions and drawbacks, such as scalability, long transaction processing times, user verification and privacy issues. Until such applications and use-cases are developed and defined, blockchain will continue to be a technology in search of a solution.
One technology breakthrough that has materialized this year was Large Language Models (LLMs). Technologists have found ways to make these once-opaque data ‘black boxes’ more transparent and easily verifiable – a prerequisite for legal use – by fine tuning them on legal data sets, honing the output with models trained for specific legal use cases, and evaluating output accuracy based on known legal ‘truths.’ As a result, LLMs are getting smarter and more accurate and reliable. There are still a number of issues that need to be addressed before we see this technology implemented more broadly, but the advances in 2022 were significant.
Anthony Seale, CEO of Legatics
I thought 2022 would be the year of greater transition to the cloud. It seemed to me that law firms had fully bought into the idea, long after most of their clients had. Whilst COVID did induce the start of a number of cloud transition projects, their scale meant that it’s taking firms many more years to complete them than I originally thought, even with the knowledge that these things take longer than one usually thinks! There are also a few firms, predominantly in the US, who are still holding back.
Going into the year I expected to see a shift from technologies that had received a lot of hype, that were often heavily AI based, towards simpler but highly adoptable and useful workflow technologies. This came true. Law firms realised that the lowest hanging fruit was most often simple but much needed advances in organisation, project management and routine automation. The market rightly moved on from the overexcited discussions around AI replacing lawyers to finding some easy and more practical wins.
Prashant Dubey, Agiloft’s Chief Strategy Officer
Last year I predicted that the enterprise would find a way to enable their sales teams to avoid elevating so many of their contracts to legal. While that transformation is underway, it seemed we had one more year of empirical data that most contracts are not bespoke and end up at the same endpoint. With that insight, we see a huge number of hockey stick prospects looking to make that endpoint the new starting point without the need for deep legal review on every agreement, while also providing sales teams pre-approved fallback provisions. This will provide sales teams more negotiation flexibility and immediately accelerate contracting cycle times for the sales process, reducing the need to get legal teams involved.
Jenifer Swallow, Legal Tech expert and former boss of LawtechUK
For 2020, I predicted ‘General Counsel will have an Avengers Assemble moment, when they use their individual and collective power to demand change: alternative resourcing models, standardised tools/platforms and more.’
We have seen some individual cape wearing and great pockets of collaboration since then, but no full Avengers Assemble. Covid drove GCs into crisis, deprioritising important-but-not-as-urgent work and stripping the time and appetite for evaluating and re-engineering infrastructure, processes and resourcing. There is now a proliferation of GC forums, with several very active and useful in different ways, but none yet moving towards a common Avengers goals, and these things do need driving. Maybe in the end the shift will be purely incremental: GC by GC, digging deeper on strategy and unapologetic execution, but the opportunity of harnessing that collective power is so clear, e.g. reframing the law firm/client service model and employer/client dynamic, eradicating fake bespoke work, and sharing data insights to serve clients and the public interest in volatile times.
For 2021, I predicted ‘Regulators will take a more active role in sector innovation, and strides will be taken towards unlocking legal data, perhaps paving the way for the establishment of a legal sharing economy’. So maybe I cheated on this one, as I had every intention of personally assuring this would come to pass. Bringing the legal, finance and privacy regulators together into a single forum precipitated an increased regulatory focus on sector innovation, its criticality for the effective practice of law, and the practical support regulators can provide to lawtech businesses building in this space. There is still a way to go before regulator data is available via API, digital competency is a requirement of study and legal practice, and misconceptions around confidentiality stop being used as an excuse not to share data access, but the foundation has been built and further steps are being taken. The success factor from here – as with all things – will be leadership.
Hugo Seymour, Chief Operating Officer at Della
Last year I hoped that firms would play a more active, consultative role on the legal and technical aspects of running a business. Step forward ‘Legal Operations by Shearman’ which launched to much acclaim in October following ‘ClearyX’ going live in June . This is an attractive move for firms. Consultancy of this form can be sold to their existing client base, allows them to use what was previously a cost centre to generate revenue and is sufficiently complex that it doesn’t impinge on the firm’s image
I half-heartedly predicted the death of the billable hour. That was a mistake. The billable hour will never die.
Thanks again to everyone who took part. Very stimulating thoughts.
Additionally, something else people may want to have on their radars are two great Legal Innovators conferences taking place in the US and UK next year:
Legal Innovators California – San Francisco, June 7 and 8, 2023
Legal Innovators UK – London, November 8 and 9, 2023
I will be chairing both of the two-day conferences as usual and also will be publishing updates on Artificial Lawyer throughout the year, featuring conference details, speaker profiles and more. Keep an eye out for those next year! I look forward to seeing you in London and San Francisco in 2023!
Richard Tromans, Founder, Artificial Lawyer and Legal Innovators Conference Chair.