Jeffrey Catanzaro discusses the challenges that new technologies are bringing to the legal sector

The launch of the Law Society’s new Technology and the Law Policy Commission – set up to examine the use of algorithms in the justice system and assess what controls might be needed – throws a spotlight sharply on the challenges that new technologies are bringing to the legal profession. Just as the pace of technological change is impacting the justice system, so it is also transforming the business of legal services, and the very nature of the firms who provide them.

Artificial Intelligence in the legal services mix is gradually becoming part of the norm. For example, the use of algorithms, expert systems and even machine learning (in which computers learn patterns from the data they analyse and use those patterns to improve their own processes going forward) are now becoming mainstream in e-discovery and other document review operations, and in many cases are also allowing legal queries to be answered without the need to consult a human lawyer.

The rise of AI is transforming how legal businesses are configured – because now that clients (particularly heads of legal in large multinational companies) are aware of how much associate-level legal work can be done by computers, they are simply no longer willing to pay for a team of 30 junior lawyers to lock themselves in a room for days sifting through evidence, or reviewing 500-page contracts. Clients now know that a machine could do this work hundreds of times faster, and much more cheaply.

Clients are increasingly insisting that their law firms differentiate between work that can be done by machines (for example, lower-level, high volume legal analysis) and that which still needs to be done by human beings (for example, higher-level legal strategy or negotiation) and bill accordingly. This classic ‘stratification’ of services enables the various layers to be configured so that they deliver the most value to the client, at the best price. And this in turn is naturally having a huge impact on legal jobs.

However, rather than feeling threatened by this change, lawyers should see it as an opportunity. The more the ‘legal robots’ take over the lower-grade work, the more their human counterparts are freed-up to focus on the more creative elements of legal service delivery. And that’s got to be a good thing.

Another aspect of this technological revolution in legal services is that as well as driving change within law firms, it is also transforming the topography of the competitive landscape of the entire legal market. Think about it: for the last few decades, the top-tier legal work has been the sole preserve of the magic circle, silver circle and global elite firms, simply because of their size. To handle the world’s largest M&A transactions, or the most critical disputes, a firm had to be able to field 30, 40 or 50-strong teams just to cope with the volume of documentation involved. Now that clients are increasingly demanding this work be done by machine wherever possible, the smartest of the smaller firms can now step into this arena and compete. Not to mention that other service providers, with vast experience in technology, access to capital, and free from the structural burdens of the traditional law firms, can also enter the fray.

In short, although the nature of the opportunity is changing, there is still plenty of it about for the right lawyers and firms. The successful professionals and firms of the future will be the ones who are most comfortable with being creative and flexible, and those who are keenest to embrace change. Continually.