ARTIFICIAL INTELLIGENCE: Shiny Object? Speeding Train?

ARTIFICIAL INTELLIGENCE: Shiny Object? Speeding Train?

This unpacks “how” lawyers will use it, with tips and examples of “who” already uses AI.

Keith Mullen
ARTIFICIAL INTELLIGENCE: Shiny Object? Speeding Train?

ARTIFICIAL INTELLIGENCE: Shiny Object? Speeding Train?

ARTIFICIAL INTELLIGENCE:
Shiny Object? Speeding Train?
(Part 1 of 2)

Overview:
This two-part series unpacks AI with these questions:
Part 1

A. How will lawyers use AI?
B. Who is using AI right now?

Part 2
(more on law schools and innovation)

A. What is AI?
B. Ethical Considerations

AI is a shiny object. The bright light is not the train that ends our lives as lawyers.

As a shiny object, AI is rivaled only by blockchain. But in contrast to blockchain, transaction lawyers have the opportunity to put AI to work immediately. Today.

Lawyers are in the legal information business. We create legal documents – legal information. It is our output. For those lawyers willing to invest in it, AI will be a valuable expansion, and even recreation, of their value proposition. Yes, it will significantly improve legal work flow; but more importantly, it will mature into a priceless treasure. It will be a treasure trove of legal information – “big legal data.”1 Because legal information as data has value. Tremendous value. Overlooked and ignored, yet in plain view, until today.

As recent as 2014, only a handful of companies pointed artificial intelligence (“AI”) at legal documents. For uses outside of eDiscovery, it was a narrow focus: contract reviews and legal due diligence – used by the largest of law firms on the grandest of deals.

Fast forward to these recent events:

  • February, 2018: The National Law Journal identified 50+ companies offering AI tools pointed at the legal industry2
  • May & June of 2018: investors placed $200,000,000 in legal AI companies3
  • September, 2018: an investor placed $50,000,000 in a legal AI company4
  • A 2018 piece in the Yale Journal of Law and Technology reviews a significant 2015 decision by the U.S. Second Circuit (Lola v. Skadden),5 and gives an outstanding overview of the use and impact of automation within the legal profession. The piece explores the “unprecedented advancements in algorithms and artificial intelligence technologies,” and offers advice on how lawyers should prepare for “an inevitable automated future.”

In 5 years, will this prediction be true?

“The law firms that are adopting AI systems now
will be the firms in five years that have larger revenues,
higher profits and more contented staff.”6

A. How Will Lawyers Use AI?

Like any new tool, it is difficult to envision or understand “how” AI will impact our work as transaction lawyers.

AI is like your new car, or even your new washer/dryer: hidden from sight, behind the dashboard and under the hood or front panel, micro-processing has replaced levers and switches. AI simply is the next (most current) functionality of the chip.

The same business model applies to AI in legal work flow. You probably already use AI in your legal practice - without even knowing it.

USES OF AI BY LAWYERS

This important question constantly lurks around discussion on AI:

“what part of my legal practice will AI replace?”

My answer is simple: AI will augment or entirely replace the part of my work that is boring (or that part of your billings that is based on boring work).

Boring work = AI work.

On the other hand, AI will be extremely useful in these areas or tasks:

  • marketing (identifying unique deals, expertise, etc.)
  • quality control (review loan documents for correct & consistent terms)
  • identifying conflicts
  • implementing best practices (ID, collect, organize documents and provisions)
  • practice management and analytics

In its 2018 Legal Tech Buyers Guide,7 LawGeek identifies these current uses of AI:

Contract Drafting

Contract Review

Digital Signature

Contract Management

Legal & Matter Management

Contract Due Diligence

Expertise Automation

Legal Analytics

Task Management

Title Review

Lease abstracts

??????


Each of us can experience AI by using these product offerings from these well-known service providers:

Thomson Reuters

Uses AI in legal research8 Thomson Reuters’ “Westlaw Edge” – “Powered by state-of-the-art artificial intelligence that’s built upon more than 100 years of attorney-edited annotations, only Westlaw Edge brings together a full suite of AI-powered legal research tools – including the next generation of legal search, integrated litigation analytics, the most powerful citator, and more”9

Some of the features of Westlaw Edge:

  • An enhanced, AI-powered version of the KeyCite citator that provides warnings that cases may no longer be good law in circumstances that traditional citators could not identify.
  • WestSearch Plus, an AI-driven legal research tool that guides lawyers quickly to answers to specific legal questions.
  • Integrated litigation analytics, providing detailed docket analytics covering judges, courts, attorneys and law firms, for both federal and state courts.
  • Statutes Compare, a tool that allows researchers to compare changes to statutes.10

LexisNexis

After acquiring 3 AI companies (Intelligize; Lex Machina; Ravel Law), it formed Lexis Analytics, a suite of tools that organizes all of its major analytics acquisitions and products (as well as a couple new ones) into three categories –

  • litigation analytics (plan and strategize around litigation, offering insights into motion and case outcomes, judges, timing, opponents and related subjects);
  • regulatory (track regulatory developments, predict which bills will pass, and understand disclosure obligations); and
  • transactional (better manage transactions through contract and document analytics).11

Lexis Answers:12

Lexis® Answers is a new service that provides answers to legal research questions on Lexis Advance. Instead of just providing documents with potentially relevant sections highlighted, Lexis Answers extracts and delivers a direct answer to your legal question, along with a finely-tuned document-based results list.

Lexis Answers also allows you to enter your query in the form of a Natural Language question. You do not have to translate your question into keywords or use Boolean syntax.

The next-generation intelligence of Lexis Answers directly understands your Natural Language question, extracts the answering passage from our content, and presents the answer at the top of the results list by leveraging the latest in machine-learning technology and the power of the Lexis Advance platform.

iManage

After acquiring the AI company RAVN, iManage (the document management, security and sharing company), one commentator notes that AI will be a “no-brainer” for lawyers. Some of the benefits include:

  • Auto-classify documents so they may be used or protected based on their content.
  • Extract key information from content, including dates, obligations, amounts, and more.
  • Identify documents that are subject to compliance requirements.
  • Find terms and clauses within content for more effective information reuse and enhanced knowledge management.13


AI now drives research and drafting tools for litigators. In a recent ABA publication, Tom Mighell furnished this list of litigation focus. Each relies upon AI.

(Check with your state bar to determine which of these is provided free to you. 14)

Eva by ROSS-

Upload your brief and get a listing of cases; highlight text, and get cases with similar language15

Casetext by CARA -

Research suite: locates most on-point case; search specific issues; review other brief to see how others frame issues16

Attorney IO

Reviews a brief for patterns and connections; then lists cases likely to be relevant17

Judicata

Reviews brief for strengths and weaknesses, and suggests improvement(s) (vulnerability analysis)18


And these are not the only companies offering AI-powered legal research.19

BUT, ARE LAWYERS REALLY USING AI?

I do not know of a definitive listing of law firms actively using AI. Like others, my answer to this question is based upon trends and numerous “indicators,” which point me to this conclusion: the failure to implement AI will have financial consequences for some law firms – and the disruption of the core business at law firms will be sudden and significant.

Innovation on the part of lawyers is the exception, and not the rule. Indeed, several surveys report that law firms are not innovating:

  • Survey of clients: law firms generally are NOT innovating20
  • Survey of large law firms: only a few law firms are innovating21

Several law schools and numerous thought leaders have taken the lead in tracking innovation by law firms, including the use of AI. For example, Michigan State Law school has taken the first step in with its innovation indexes, which it uses to report on law firm innovation.22
The index tracks law firms who claim that they have implemented innovations.

The index shows 20 law firms are using (have used?) AI either as part of a service, a product or as a consulting tool to help lawyers improve legal-service delivery.

(There are several other collections or lists of law firm innovation23)

These are my favorite resources for keeping track of legal AI developments (using Feedly on my iPhone and saving materials into Evernote):

  • Mark Greene's "Today in Legal Artificial Intelligence blog"24
  • Ricard Tromans' "Artificial Lawyer" blog25
  • Bob Ambrogi's "LawSites" blog26
  • Two (2) Linkedin groups:
    • Artificial Intelligence (@ 44,000 members); and
    • Legal Innovation and Technology (@11,000 members)

As I've followed these sources during the past several years, more and more law firms are taking (small) steps in innovation.

Some of those steps include the following:

  • A focus on project management
  • Hiring data scientists – the "middle person" between AI IT and lawyers (yes, large law firms are hiring data scientists)
  • Designating one or more lawyers as innovation and knowledge development counsel. While this simply might (could) be a marketing ploy, the list of law firms that are genuinely taking or testing this approach is growing; and take a look at the people & positions listed in the FastCase 50 for 201827
  • The UK law firms, of course, are the leaders in this. For example, Allen & Overy and at Addelshaw Goddard28 have announced new career paths that combine legal expertise with technology.
  • In the US, Mayer Brown and Reed Smith are examples of law firms experimenting with "non-billable credit" and tech-focused summer clerks29
    • Qn: so, how much innovation takes place in 100 hours (associates) or 50 hours (partners); or through the work of summer clerks? (My experience is that at least one and probably two "zeros" should be added to the hours.)

The hard part, of course, is getting it done. The most difficult step is moving from looking at the shiny object to taking thoughtful action.

TIPS FOR USING AI

Nicole Black has a thoughtful piece on the use of AI by traditional law firms.30 She focuses on one thing: what is the problem that needs to be solved?

She flags identifying the problem that needs to be solved as the key to successful implementation of AI software. She also identifies “cultural obstacles” as a fundamental and key challenge. I agree.

This is my list of tools and tips that have helped me:

  • Time, time and more time
  • Identify a real problem with requirement of significant “upside” improvement (+50%)
  • Plan (start small; commitment; changes to plan; tied to/aligned with law firm goals, strengths, etc.)
  • Money (access to capital)
  • Patience (thick skin)
  • Commitment by the law firm leadership and all partners
  • Compensation (with incentive component)
  • Do NOT build it if you can license it
  • Test-drive AI companies using a “real” work scenario (or “shadow” a project)
  • Skills in project and process management (map/time work flow)
  • 7 Tips on assessing whether a law firm has AI in its DNA31
    • Investors ($ used)
    • Academic background of technical leadership
    • Experience of data scientists/AI team
    • Talent density: proportion of AI talent to tech team
    • Hiring practices: hiring people with machine learning credentials
    • Company/law firm history: how long tech team has been at the firm
    • Full-time AI leadership: not part time focus on AI
  • Articulate the economic benefits for innovating – and using AI32
  • Other tips33

Of course, I save the best tip for last:  if your firm is an iManage client, then explore iManage’s RAVN tool34 – I’m very familiar with RAVN.

B. Who is using AI?

These examples are just a few examples that show the accelerating use of AI and technology in and around the legal industry.

2018 In-House Counsel’s Legal Tech Buyers Guide35

  • The number of AI players servicing the legal industry has increased from 40 to 66 in the past 12 months
  • The guide describes more than 120 technology solutions, in 16 categories of legal technology
  • The report highlights the use of legal technology by more than 80 of the world’s top law departments (including McDonald’s Facebook, NetApp, Google, and AIG)

Tracking Legal tech startups36

As of late August, 2018:

  • 678 companies - tracked by Bob Ambrogi
  • 1,049 companies – tracked by Stanford Law’s CodeX (“a curated list of companies changing the ways legal is done”)

Follow the $$$$$$$$

  • While not specifically directed at AI, the $500 Million secondary investment (July 2018) in the web-based legal services company LegalZoom points to investor’s appetite to leverage software within the legal industry.37
  • As noted above: in May, June and September of 2018, investors placed $250,000,000 in legal AI companies.

JPMorganChase

  • The self-talk by leadership at JPMorgan Chase is this: ““we are a technology company” 38
  • In 2016, the tech budget was @$9.5B ($3B of which spent on innovation such as machine learning)39
  • Their AI group created “COIN” to review 12,000 EU loan agreements (saving 360,000 hours of manual review)40
  • Their AI focus41 is primarily pointed at the Consumer Bank and the trading desk: in May, 2017, their Global Quantitative & Derivatives Strategy Group published a 280-page report on big data and AI strategies, which includes a listing/description of “500 alternative data and technology providers.”42

Barclay’s – Eagle Labs

  • Barclays has created a collaborative “lab” (called “Eagle Labs),43 which intends to “create and curate a series of products, services and co-operative partnerships that improve the lives of people in the communities which we serve, whilst providing the commercial return to our shareholders.”44
  • Joining Barclays to host legal tech startups that focus on legal technology: 13 law firms, PwC and the Law Society45

British Government
(Colonies v. the Crown)

  • 1776: Yorktown (Yanks win)
  • 1812: A draw?
  • 2018: British government creates an investment fund ($27Mill) to help AI grow in the legal, accounting and insurance sectors46
  • 2018: British government organizes a trade mission to Vienna and Zurich for UK-based, legal tech vendors to “meet new customers and potentially win new contracts” 47

UnitedLex

  • European private equity firm CVC Capital Partners said Thursday it had acquired a majority stake in Overland, Kansas-based UnitedLex Corp., giving the legal services company access to $500 million in debt and equity “to invest in the company’s technology, target businesses for acquisition and to invest alongside the clients it serves.”48

Two Legal Publications

  • National Law Journal: Profiles 50 companies described by it as “leading the legal industry in artificial intelligence”49
  • Artificial Lawyer’s AL 100 Directory: directory of firms offering automation and AI for the legal industry, and systems designed to integrate and support those tools50

“We Want (The Technical) You”

Money Center Banks & Big Banks

  • Every money center bank, and most big banks, have teams of people hired solely to discover, examine and deploy new technology solutions that impact their business


The Big 4 accounting firms are investing in AI as a key ingredient in their services.51

Deloitte

Partners with IBM Watson, Ayasdi, Narrative Science and Kira – with one use being lease reviews

EY


Using AI in financial audits and inventory auditing (using airborne drones)

pwc

Developed “GI.ai” in collaboration with HzO.ai for use in financial audits and document reviews (leases, contracts, board minutes, etc.)

KPMG

Built a portfolio of AI tools using IBM Watson, which it calls “KPMB Ignite.” Uses include call center analytics, event predicting and document review.


Legal process outsourcing companies are incorporating AI into their services.

AXIOM

One example: Axiom’s “Contract Intelligence Platform” partners with KIRA, the AI company.52

Thomson Reuters

Partners with AI firm eBrevia in its LPO (legal process outsourcing) division 53

Wolter’s Kluwer

Building out its own platform (UpToDate; LegalView BillAnalyzer; CCHiQ; M&A Clause Analytics) of AI solutions54


CORPORATE LAW DEPARTMENTS

Corporate legal departments now focus on technology. The increase use of technology by in-house teams is reflected in the following:55

  • 75%: in-house counsel now handles 75% of their legal work
  • 71%: legal departments citing the need to increase productivity without increasing legal headcount
  • 25%: the law departments’ spending on systems and technology has grown at a 25% faster rate than the larger corporate market in 2017

This focus extends to the creation of a new position in many legal departments: “Corporate Legal Operations” is a new role in the Legal Department. For example, Citibank had this job description in its legal department: Director, Legal Innovation and Delivery. (I can no longer give you a link to this listing – the job has been filled.)

This new position even has a new industry organization: The Corporate Legal Operations Consortium (“CLOC”).56

The closing remarks by Mary O’Carroll, head of legal operations at Google, at the 2018 CLOC consortium meeting gives a remarkable summation of the importance of technology to corporate legal departments:

“First, let’s pause and appreciate the significance of this event. Wow. There were around 500 attendees including legal ops leaders from over 130 companies. WHAT?! If you told me five years ago that there would be a three-day conference focused on legal operations, I would have laughed. This is the largest legal operations event in history and it’s just the beginning. I’m sure you all are feeling the momentum of change in the industry right now. We’re on the verge of something very exciting.”57

Finally, this footnote has links to 7 examples of AI being incorporated in corporate legal departments:58

In part 2, we’ll take a quick look at the growing focus on technology by law schools, and take a look at AI itself: What does it do? How does it do it? Finally, and importantly, we’ll address some of the ethical duties and challenges associated with AI.

  1. https://en.wikipedia.org/wiki/Big_data
  2. http://bit.ly/2wqNVxk
  3. http://bit.ly/2B6LWAD
  4. http://bit.ly/2NkW5hW
  5. http://bit.ly/Lola-AutomationLegalIndustry
  6. http://bit.ly/2ACSyX5
  7. http://bit.ly/2xtUn7s
  8. https://tmsnrt.rs/2MicsqT
  9. https://tmsnrt.rs/2Nc7InI - “access to better predictive research suggestions that take you to the precise text you need to quickly find the answer to your legal question; exclusive AI-enhanced search technology continually runs behind the scenes to root out the most likely typeahead suggestions and instantly surface relevant information – saving you valuable time; see suggested queries with better predictive typeahead; using Litigation Analytics, you can leverage the largest collection of insights on judges, courts, attorneys, law firms, and case types to build the most effective case strategies”
  10. https://tmsnrt.rs/2MicsqT; Bob Ambrogi reviews it here http://bit.ly/2Qh8UZr
  11. http://bit.ly/LexAnlytcs; Bob Ambrogi reviews it here http://bit.ly/LexAnlytcBob
  12. ; http://bit.ly/2p013Dd ; Bob Ambrogi reviews it here http://bit.ly/2x4A51r
  13. http://bit.ly/2OaSD6X Bob Ambrogi reviews it here http://bit.ly/2Qk5qVY
  14. Tom Mighell column in ABA Law Practice magazine, July/August 2018 (pp. 30 & 31) (http://bit.ly/2zbPmkx ); other use cases covered at http://bit.ly/2lTAlKQ
  15. http://bit.ly/2CLLB7f
  16. https://casetext.com/cara
  17. https://www.attorneyio.com/
  18. https://judicata.com/
  19. http://bit.ly/2QclrMC
  20. http://bit.ly/2qOwr8K; Altman Weil survey shows managing partners’ frustration mounts at lack of law firm innovation - http://bit.ly/2x2zAaR
  21. http://bit.ly/2Jg1G3r, see pages 15-18; results on for this Qn – “is your firm actively engaged in creating special projects/experiments to test innovative ideas or methods?”
  22. https://www.legaltechinnovation.com/
  23. From the MSU Legal Services Innovation Index: Jordan Furlong (http://bit.ly/2OakvI1); Rod Friedman (http://bit.ly/2QmeeuF)(Bloomberg Law (January 22, 2016); Ron Friedman ( http://prismlegal.com/rd-big-law/) (Prism Legal Blog; updated July 2017); Roy Strom (http://bit.ly/2p1HIRN) (The American Lawyer, November 11, 2016) (Registration Required); Financial Times (http://bit.ly/2OezjWn) (2016 version; last visited July 2017); Janders Dean & LexisNexis ( http://legalinnovation.com.au/) (through 2016; last visited July 2017)
  24. http://bit.ly/AImGreene
  25. http://bit.ly/AILawBlog
  26. https://www.lawsitesblog.com/
  27. http://bit.ly/FCase50 This list includes lawyers with legal tech roles at law firms
  28. http://bit.ly/2HioVxe
  29. Reed Smith law firm: “newly adopted initiative gives attorneys up to 50 hours of billable hour credits for putting time in new innovations” http://bit.ly/2IEPtZB - and Reed Smith’s summer associate program includes five legal tech summer associates who will devote their time to assisting the firm in evaluating and implementing new technology - http://bit.ly/2xZ29Gy ; Mayer Brown law firm: “Mayer Brown has quietly done something similar with an internal announcement coming this week alerting associates that they can now get billable credit for up to 100 hours spent on “legal process improvement” projects or other “thought leadership” hours, including researching and writing articles, client alerts, or giving speeches. (The firm also lowered its billable bonus threshold from 2,100 hours to 2,000 hours.) (http://bit.ly/2y0OUoB)
  30. http://bit.ly/2PPu2bR
  31. http://bit.ly/2QGAVtn
  32. http://bit.ly/2IlCrO5
  33. Thomson Reuters has 7 tips at https://tmsnrt.rs/2qVQNwg; Keith’s summary of Peter Krakaur’s 5 practical tips (http://bit.ly/IncludeAIinPractice); Reed Smith’s “innovation hours” http://bit.ly/2kVVUdm ; Nicole Black reviews the book “Legal Upheaval: A Guide to Creativity, Collaboration, and Innovation in the Law” and also offers her own tips at http://bit.ly/2QVuBOV
  34. https://imanage.com/product/ravn/
  35. http://bit.ly/2xtUn7s
  36. Legal tech startups: legal tech startups tracked by Bob Ambrogi (http://bit.ly/2vB3bY2); curated list of legal tech companies prepared by Stanford Law School and its CodeX projects (https://stanford.io/2HPvIM1); description of Code X projects (https://stanford.io/2wyzozT ); Legalese, which operates from the perspective that “law is better off” in computer code (https://legalese.com/); and Jean O’Grady (http://bit.ly/DeweyB)
  37. http://bit.ly/2LOTV9C
  38. https://read.bi/2HilCGx
  39. https://bloom.bg/2qQiUwL
  40. http://bit.ly/2qgk7wV
  41. http://bit.ly/2qT5CzG
  42. http://bit.ly/2HHUq3m
  43. https://labs.uk.barclays/
  44. https://labs.uk.barclays/mission
  45. http://bit.ly/2HDS02l
  46. http://bit.ly/2IWBgal Comment: For the past 10 years, I have spoken on legal technology. I clearly misjudged or mistimed the arrival of disruptive technology in the US legal industry. Now is the time to say it again (but quietly in this footnote): in 1776, the redcoats came and we (Yanks) clearly won. 1812 . . . let’s call it a draw (or, we just didn’t care about Canada) . . . today, the Brits could easily win, given their head start in legal tech. (Yes, “head” start as in much smarter than us Yanks.).
  47. http://bit.ly/2wEpev8
  48. http://bit.ly/2xIJAnw
  49. http://bit.ly/2wqNVxk
  50. http://bit.ly/2PKiS56
  51. http://bit.ly/2MVM3Vb
  52. http://bit.ly/2u98ERQ
  53. http://bit.ly/2oNfRFf
  54. http://bit.ly/2Nu6A2C
  55. LawGeek’s In-House Counsel’s Legal Tech 2018 Buyers Guide: http://bit.ly/2xtUn7s
  56. link to home page of the Corporate Legal Operations Consortium - https://cloc.org/
  57. http://bit.ly/2wcCj10
  58. http://bit.ly/2Kp9cx7
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