CHVP-FOLIENSAMMLUNG V003

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3 LAWYERING IN AN AGE OF INTELLIGENT MACHINES, by Marc Lauritsen, to be found at Large international law firms sell subscriptions to online expert systems that deliver sophisticated legal analysis without direct human involvement. Corporate law departments equip field personnel with do-it-yourself contract assemblers. Courts and legal aid programs provide intelligent forms for unrepresented litigants. And lawyer-less entities vend interactive documents and automated legal assistance over the Web. Information technology is endlessly relevant to and potentially transformative of law in each of its guises: subject, tool, and perspective.. Information technology is transforming law as a social institution, and as a profession. To survive and prosper during that transformation you need to understand it. A commonplace of the early legal tech world was that computers are not going to replace lawyers; lawyers who use computers effectively will replace those who don t. CHVP-FOLIENSAMMLUNG V003 3

4 THE DEATH OF BIG LAW, Larry Ribstein (WISC. L. REV. VOL. 2010, NO. 3 pp , August, 2010) to be found at: Technology potentially could transform the delivery of legal services. Richard Susskind has written about the general move from customized advice to the sale of legal commodities as lawyers or others figure out how to unbundle and systemize legal advice and services. LAWYERING IN AN AGE OF INTELLIGENT MACHINES Marc Lauritsen, Harvard University Generic technologies of course can help lawyers with activities that other professionals and business people engage in, such as decision management, checklists, and planning. More law-specific tools provide support for argumentation, rationale mapping, case diagramming, negotiation, settlement, counseling, drafting, and interviewing. We need to accept the probability that yet unimagined systems of societal ordering remain to be encountered and developed. If earthly civilization manages to survive for another 100 years, does anyone suppose that it won t evolve technologies of social ordering that will make contemporary forms look primitive? 4

5 Resume of Legal Technology Horizon study 2013: 1. An accelerating pace of technology disruption and diffusion with the associated challenges of learning to manage rapid systems change and embrace the strategic potential of IT (see for instance: Zubulake V) 2. Responsiveness to client needs around value, speed, innovation and security (which is a constant demand). 3. Industry level forces such as intensifying competition, changing firm structures, business models, new entrants and a heightened talent agenda (here are currently about 1000 business). 4. The impacts of consumerization, commoditization, automation and the pursuit of optimal firm scale forces the legal market to change 5. IT has already impacted on large parts of the markets; the pace of that impact will accelerate and force lawyers to become tech-savvy. 6. The pursuit of differentiation in the face of continuous change will allow new entrants into the market 5

6 Major Changes in Legal industry: Dupont Legal: Six Sigma approach (beginning 1990ies), Axiom Law (virtual law firm, avoiding overheads) Lawyers on demand Advance Law (evaluation of law firm) LeClaiRyan (defragmentation of legal processes, ie discovery) Legal billing: electronic billing review process LPO: Legal process outsourcing to cheaper locations with the help of IT processes The jobs that are going away aren't coming back," says Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of "Race Against the Machine." ''I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years." The most vulnerable workers are doing repetitive tasks that programmers can write software for an accountant checking a list of numbers, an office manager filing forms, a paralegal reviewing documents for key words to help in a case. Some of the most startling studies have focused on midskill, midpay jobs that require tasks that follow welldefined procedures and are repeated throughout the day. Think travel agents, salespeople in stores, office assistants and back-office workers like benefits managers and payroll clerks, as well as machine operators and other factory jobs. Source. CHVP-FOLIENSAMMLUNG V003 6

7 Allen & Overy legal market study 2014: CONSOLIDATION: Organizations are reducing the overall number of external law firms they partner with. 58 % say the intend to consolidate further over the next three years. This is driven by a desire to have deeper relationships with fewer firms. PROFESSIONISATION OF PROCUREMENT: A third (33 %) day their procurement function is playing a greater ole in selecting which external legal providers they work with. This trend is even stronger with large financial institutions, where the proportion rises to 41 %. LEGAL TRENDS ARE GLOBALISING: 53 % of interviewees from the Middle East and Africa and 50 % from Asia Pacific, agree that trends in other markets (namely the U.S., the UK and Continental Europe) appear in their market sometime later. That means it won t be long before the shifts in client expectations witnessed in Western legal markets are felt as acutely in other parts of the world. The major trends are: - Consolidation - Professionalisation of Procurement Information technology is helping both trends, by making processes cheaper, and by making information more easily available 7

8 Example how law firm can make money form IT innovation: For example, Cisco does all its patent review work on a flat-fee basis. To make the process more predictable and less of a risk, the company built an online patent tool for internal use that reviews the business case for an invention. Cisco engineers using the software answer questions about their possibly patentable innovations. Based on the answers, the software tries to identify whether something is indeed patentable, as well as any legal questions that might need to be addressed. If the software signals that the patent application meets Cisco s criteria, it will be assigned to a law firm. After working with the Cisco tool, Baker Botts took it upon itself to create its own extranet for managing patent investigations. Now Cisco pays Baker Botts a fixed fee for the service, which allows authorized Cisco and Baker Botts employees to have Internet access to documents and materials related to technical analysis of a patent application. Source: 8

9 The legal market s transition is, however, fueling innovation throughout the entire industry. In 2009, just 15 legal startups were listed on Angel List. There are now more than 400 startups and almost 1,000 investors. Entrepreneurs and investors are focused on helping lawyers do their work better, faster, and cheaper, making the law more accessible and/or cost-effective for clients, and eliminating the need for lawyers altogether, where possible. The legal market is broad, and the numbers are regularly debated because of the numerous segments, but generally the U.S. legal industry is estimated to be worth in excess of $300 billion (with some estimates as high as $400 billion). The global legal market is estimated to be worth about $800 billion. Funding for legal tech companies is catching up, with around $450 million in funding for legal startups in 2013 a marked increase over the approximately $100 million of funding in Some of the deals from 2013 involve companies like LegalZoom ($200 million), Lex Machina ($4.8 million), and Axiom Global Inc. ($28 million) companies that vary wildly in problems they aim to solve in the legal industry. The upward trend is almost certain to continue, given that we are still in the early stages of disruption of such a vast industry. So far, in the first three months of the year, legal tech startups have received around $50 million in funding (or over $150 million if a more inclusive definition is used). Startups are attacking every segment of the legal market, including legal research (Judicata), legal self-help (Shake), online dispute resolution (Modria), contract automation (Diligence Engine), electronic discovery (Logikcull), practice management tools (Clio), legal marketplaces (UpCounsel), legal education (Mootus), analytics (Lex Machina), and more. Law firms are innovating too, and new model firms are regularly rejecting the traditional law firm business model. These firms are embracing the use of technology or even creating tech solutions to serve clients better, faster, and cheaper see, for example, Radiant Law in the U.K., Potomac Law Group in the U.S., and Cognition LLP in Canada. Source: Nicole Bradick in LegalZoom on 9

10 The role of IT department of law firms: Business Innovators: These firms have transformed their relationships with clients through the effective use of IT. They are highly IT-literate, and this is seen as a powerful source of competitive advantage and differentiation. A high level of experimentation and innovation is characteristic of the firm s culture, and clients see it as a first port of call to try out new approaches and ideas. The IT function has built a strong reputation for delivery of effective business solutions and has close alignment to key client-facing practice areas. IT s role and innovation potential is well understood and supported and is encouraged to play a central role in creating new opportunities and value. Survivors: For these firms, little has changed in material terms from the world as they knew it in Competition has eroded their competitive position in all but a few key opportunity areas. Survivors typically have relatively low expectations beyond basic service provision, and they minimize investment in IT. The IT function is run with lowest cost as a prime directive. Seat Warmers: Firms understand the potential for competitive advantage and innovation presented by IT. Ambitions are frustrated by a limited IT function that is not up to the job and is effectively keeping seats warm for a more proactive replacement team that are being recruited. Funding is increasingly being channeled to third-party innovators who can create disruptive new solutions which the next round if IT leadership will be asked to deploy. Clients are demanding ever firmer commitments of when the firm will upgrade its technology capability and orientation. Frustrated Superheroes: IT has a highly capable team, strong business orientation and excellent delivery skills. The business though is unwilling to seize the opportunity and is reluctant to embrace an enhanced role for IT beyond delivery of a core set of services. IT is increasingly trying to secure internal alliances with more forward thinking lawyers and using small amounts of budget to pilot more innovative ways of working and delivering client solutions. IT invests a significant amount of effort in trying to help the business get maximum value from existing investments and to encourage the sharing. 10

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13 Resume: Changes will inevitably come (has they have arrived in the past): in any standard procedure, machines will perform better than human beings and thus will gradually take over their jobs. Existing regulation will not protect you from the new services take the zero regulation approach Human beings will remain part of the legal industry as long as there are new, unforeseeable, fuzzy things coming at your table, which has not yet become a standard. What matters is what you make out of the changes: make them work for you and your firm! I trust you will succeed! 13

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