29 Sep 2016

Gaining a competitive edge with Artificial Intelligence

Greg Wildisen of Neota Logic considers how the use of AI will develop in the legal sector and the benefits it brings to law firms.

Maksim Kabakou Maksim Kabakou

Industry analysts such as Gartner and IDC predict that algorithms – or artificial intelligence (AI) – are the future of business. For lawyers, that will mean creating legal algorithms to automate at least the routine parts of their practices. Starting perhaps with those tasks that are frequently undertaken and are less legally complex.

Over time, the complexity will increase as intelligent software becomes more capable. Either way, what we are seeing is the intersection between technologies capable of creating legal algorithms and an Internet capable of distributing services on-line. In the same way that consumers today demand device driven Apps to consume goods, in time professional services will be demanded similarly by businesses.

Driving force for change

Clients will likely be the driving force for change within law firms. In the same way that clients are demanding technology enabled improvements in their own businesses, they will expect professional advisors to do the same. Technology has moved on significantly and it is now completely feasible to emulate a combination of rules, expertise and judgement into software. It takes effort to achieve this properly but once accomplished, it is completely scalable, able to be dispersed globally and with consistency that is impossible to achieve with humans. AI software never forgets a case and is incapable of bias.

What types of legal functions or advice is best suited to AI assistance? AI is ideally suited for complex repetitive tasks where accuracy is key.  An example of this type of Smart App is Foley & Lardners FCPA App. This mobile app allows their clients’ sales teams to self-serve payment questions anywhere, anytime round the globe. It has provided Foley access to new clients deeper into the Fortune 500 extending their client base beyond what they were handling on a one-to-one human answer basis.

Another example for the use of AI in law today is ComplianceHR, a self-service Smart App platform for HR questions powered by the expertise of Littler Mendelson, the US’ largest HR law firm. In this platform there are a series of Smart Apps including an Independent Contractor App that assesses the users’ employment status in 51 jurisdictions by assessing some 1,400 cases and 80 weighting factors.

Advantages for legal practitioners

There is no reason for lawyers to fear a technology-enabled future. AI provides huge opportunity to re-imagine the way legal services are delivered to a demanding client base. What is required is an open mind and a spirit of inquiry. Just as algorithmic business is the future according to leading business analysts, algorithmic law is the future for the legal industry. 

There are a number of tangible benefits that law firms and legal practitioners can gain through AI and this includes:

1.       Differentiate service offerings: Many firms will consider that their current service delivery model is working well enough. Their practices are busy, their hourly rates are holding up and Profit per Partner (PPP) remains strong. The key with disruptive competition is that it rarely comes from current competitors.

2.       Rapid and accurate legal advice: Understanding all the highly complex and fast changing regulations forced on businesses is difficult. Smart Apps will allow law firms to provide their expertise as subject matter experts to the end user client who is faced with the actual challenge – Can I or Can’t I?

3.       Generate new revenue streams:  Law firms that use AI will be able to create extensions of their business by offering a self-service platform with deep specialist legal advice at more rapid response rate.  This might be done through an online portal or Smart Apps thereby generating new revenue streams.

4.       Improved staff retention:  By automating repetitive tasks, legal staff can focus on more interesting and value added counsel which allows more interesting and engaging work to be done. Higher value will also add greater stickiness to client relationships.

5.       Reduce costs and improve profit margins: Return on investment (ROI) can also be driven through reducing costs, eliminating errors and reducing senior lawyer oversight in areas such as routine compliance tasks.  This also frees up time for senior counsel to offer more strategic support to their clients.

6.       Improve marketing and lead Generation: AI will help law firms to truly innovate and create a marketing lead generation engine, by attracting new clients or creating stickier relationships with current clients by offering a broader range of services. 

Fear or opportunity?

The critical element for law firms is to look at the opportunities that this technology creates, rather than focus on the fear. Proactive lawyers will be able to connect deeper into their clients’ organisations answering repetitive, important questions for their clients’ end users. AI enables this. Further thinking lawyers will be able to wrap-up their legal logic and expertise and connect it directly into their clients IT systems to ensure compliance. AI empowers this. 

No matter where your organisation falls on that adoption curve, the key is to start. Set goals in line with what you know your organisation can accomplish given its culture, and then identify an area in your organisation that would most benefit from freeing up valuable resources to add strategic value to the process.

Many law firms are inherently conservative by nature. But change is occurring at the edges, and wholesale change will take time.

Greg Wildisen is international managing director at Neota Logic, an AI-based Expert Systems Platform.

Email your news and story ideas to: [email protected]