When tackingling the Legal Services industry the most important technological tool to keep in mind is the use of data in the sector. It is with data that computers are able to identify patterns, identify the correct documents, and locate breaches of contracts. The biggest challenge associated with this type of data is language. It is only in English where we see a very strong database. These databases are essential for computers to understand what the language is saying and turn it into easily coded data points. Many languages, like Dutch for example lag behind as they are not as widely used in a larger global market.
One area where technology is driving huge leaps and bounds in advancement is contract generation. It is through AI that we are now able to easily sort keywords, as well as entire legal due diligence processes. With this writing becomes a commodity (and most templates are now pretty much available for free, like at capitalwaters.nl) and a lawyer is able to focus their resources on providing the necessary legal guidance to clients rather than typework. One side effect of this reprioritization of work for lawyers is that the younger generation of lawyers have no natural entry level job. It is now far more timely and cost effective to have a program oversee document generation instead of hiring a person with a required salary and benefits to do the job at a slower rate. This creates quite a challenge in the industry, because starting as a partner is not feasible. Besides that, legal advice very often becomes more intertwined with other consulting services, which has spurred the big 4 and others to set up legal consultancy as part of their suite. Consulting firms are competing with law firms at much lower rates. This is kind of regulatory arbitrage, as law firms are strictly bound by their professional code and non law firms are not.
When looking at the sector trends, it’s important to look at the other tools that are changing the way work is conducted. Tools like identity verification (notary work) and process automation, play an important role to support legal work. Secure sharing and online signing, project management, digital data rooms have all shaken the foundation of what a client’s interactions and expectations of a law firm look like. Remote work has not yet become the new normal, but is underway, and it is with these secure tools that the Legal Advisory sector can safely and securely make the shift.
The long term promises of the sector are also underway. We are seeing more movement in self executing contracts. While they already exist in saas platform, those dealing with subscriptions or buying services fairly operate stand alone. You don’t need a block chain to do these types of transactions. It is expected that as more and more contracts go online, templates will all be open source, and legal services will shift focus to bespoke advice, rather than run of the mill legal contracts. Legal subscriptions, including insurance for excess legal costs might become very popular in the near future.
With an eye to the future, it’s important that we keep an eye on the developments in open source, Natural Language processing (to be able to interpret legal texts) and artificial intelligence to do automated decision making. Which we are seeing already in practice operationally in very simple forms.