Comment: How AI is transforming the legal landscape

By Tim Pullan, CEO of ThoughtRiver

Gottfried Leibniz, one of the ‘grandfathers of artificial intelligence’, was, amongst other things, a lawyer. And despite dying some 300 years ago, he was clear on the benefits that AI could bring to the legal industry, stating: “It is unworthy of excellent men to lose hours like slaves in the labor of calculation which could safely be relegated to anyone else if machines were used.” Whether Leibniz was actually anticipating recent innovations like predictive coding or conversational interfaces in ‘legtech’ is up for debate. However, it is undeniable that in 2019, AI is transforming the legal industry to the extent that lawyers can now work in ways which were previously impossible. 

In most industries we’re seeing AI have an impact on the way we do business, from chatbots helping major retailers handle customer queries to the ongoing development of predictive analytics in healthcare. Law is no different.

The future is now

A recent study of London law firms by CBRE revealed that almost half (48%) are already using AI. I don’t foresee this number doing anything but increasing over the next few years. Conversational interfaces can give consumers basic legal help (the app ‘DoNotPay’ tackles parking fines, for example). Automated document review turns hundreds of pages of ‘legalese’ into plain English. And tools like our own ‘Lexible’ use AI to analyse lengthy and often convoluted contracts to empower lawyers to cut through to key questions and decide what steps are the most important to take. 

Humans make errors, and even highly trained lawyers can’t be infallible when reviewing 100 pages or more of elaborately worded agreements, especially with the lack of standardisation across contracts. AI-powered technology, however, can work 24/7 and, once trained with human expertise, makes fewer mistakes than its human counterpart, as well as not taking time off. This means that lawyers are able to focus on higher-value activities, providing more ‘bang for the buck’ to their clients and making the act of work more interesting for the lawyers.  

Why is this important? It’s not just about saving time and labour for an individual lawyer, but also giving them incredibly powerful tools to increase their efficiency and value to clients and employers. In my opinion, lawyers should be actively seeking out AI-powered tools to add to their capabilities, meaning that they will be able to both focus on work that is more complex (freed from the repetitive everyday tasks machines simply do better), and simultaneously be better-equipped to tackle this work.

Can AI Help to De-risk Contracts?

There are more benefits to the legal sector stemming from AI. It has the potential to help both lawyers and clients understand the risks, liabilities and responsibilities contained within the legal arrangements they enter into. 

Contractual complexities have increasingly burdened product and service agreements over the past two decades.The ‘bundling’ of sub-prime mortgages into one securitised package to be bought and sold by mortgage providers, is one example, and underpinned the global financial crisis of 2008. 

So many of the vulnerabilities in the global debt system lay buried in contract terms that were in practice impossible for regulators to analyse and model at scale. The relationship between the contract terms, the terms of the underlying assets, and the performance of the resulting security is by definition complex and could only be understood with easy access to data. People were left having to assume that the contracts were adequate. This isn’t a unique situation; almost every large company suffers from risk management issues – they often simply don’t know what’s in their contracts. And it’s here that AI technology can perform tasks that humans can’t; that is, analyse surface information about risks and liabilities that would be impossible for a human to compile.

AI is also fully capable in helping us to identify conflicts or repetition, and to promote a return to shorter contracts, as well as creating reusable ‘building blocks’ that may aid in the drafting of contracts by much more junior staff. In English, which remains the global language of legal contracts in most cases, there are many thousands of ways to express even a short section of text. AI can analyse the typical arrangements of a contract to create a simple step-by-step approach: this contains X and Y, but not Z, and so on.

Finding the ‘magic mix’

AI’s potential in contract review is just one area that is proving how valuable Artificial Intelligence can be, and as its use progresses, the firms that are willing to take an open minded approach to its application will undoubtedly begin to experience a clear competitive edge. Future generations of these tools will make the intelligence component invisible, because it is so integrated with user workflows. And we’ll no longer be referring to it as AI – it will just be technology.

Adopters of new technology often end up learning that it works best when humans are closely involved in the process. Whereas AI can do the heavy lifting, human instinct and experience is invaluable. AI can be a wonderful addition to the armoury of the working lawyer, so the next challenge for those implementing this technology will undoubtedly be regulation, establishing ease of use, and identifying the key areas of their practice in which artificial intelligence can unlock new efficiencies for both the short and long term. 

Tim Pullan founded machine learning-based contract pre-screening company ThoughtRiver in 2015. It’s software scans and helps users to visualise information in contracts.