Artificial Intelligence (“AI”). Previously it used to bring to mind Skynet of Terminator fame and the accompanying robot apocalypse. Now its a buzzword that is used more often than not to describe simple automation. AI is so much more. AI is a system that learns to perform intelligent tasks previously thought to be in a human’s sole domain. The legal industry is a classic example of what was previously thought to be automation proof but with the advent of AI, we can see there is a new dawn upon us. This article will be examining some of the applications for AI in the legal industry and what the future potentially holds for such a profession steeped in tradition.
The average law department wastes a significant percentage of its available work hours on reviewing contracts before they’re signed. Having worked in an in-house legal department myself, I can safely say that we spent roughly 50% of our time reviewing contracts. This figure is backed by technology research company CEB (1) with regards to small and mid-sized companies. What happens is that this inefficiency creates bottlenecks within organisations, as sales, procurement, and other departments wait for approval, slowing down business on what should be a speedy turnaround. Enter AI to automate the review and approval process of everyday business contracts. We are talking about your NDAs, service agreements etc. These contracts can be reviewed by AI, approving them if they match pre-defined legal standards set by the legal department or escalating them to the legal team if issues are found. This reduces legal bottlenecks and shortens contract turnaround time. AI’s capability can also now flag and interpret information from contracts, offering data capture and policy management tools, and can provide analysis on a document that can be used to automate decisions.
Do take note that AI contract review is limited to a fixed set of standard contracts and is not all encompassing. This in turn does not remove the need for an in house counsel but it enables counsel to actually focus on more high value or strategic matters. We believe in this technology so much that we offer it as a business solution here. (yes we know, its a shameless marketing plug but its REALLY that good)
Contract Due Diligence
Companies usually house tens or hundreds of thousands of contracts and agreements. These may hide obligations and/or liabilities that expose the company to risk. Due diligence performed on these contracts are of the utmost importance to both the company itself or to any potential suitor.
AI helps enterprises identify, extract, and analyse business critical information from unstructured contracts and related documents. This type of AI software has been deployed for projects ranging from contract data extraction, regulatory compliance reviews, due diligence, and corporate organisation audits. Some of the world’s largest corporations and professional services firms, have used AI solutions on over $100 billion of M&A transactions in 2015 alone. eBrevia uses artificial intelligence, based on technology developed in partnership with Columbia University, to analyse contracts bringing accuracy and speed to contract review, due diligence, and lease abstraction. To date, the company reports a 30%-90% increase in speed (as compared to manual review) with a 10% increase in accuracy. LEVERTON develops and applies AI to extract and manage data from corporate documents in several languages and has more than 100 global corporate and investor clients.
This application of AI is naturally geared towards M&A. As is always the case in the business world, speed in closing a deal is a huge priority. This solution has now offered businesses the ability to finish their due diligence exercises in not only less time but with greatly reduced costs. We are currently in the midst of adding such a capability to our own AI offerings so stay tuned to this space!
Even research has not been spared by the rise of AI and so famous names such as LexisNexis find themselves facing ample competition.
Bringing AI to legal research, ROSS Intelligence, much like Apple’s SIRI or Microsoft’s Cortana, can respond to questions in plain English. Their AI solution, leveraging IBM Watson, scans a large database of questions to provide information that is likely to be relevant to the enquiry. Bankruptcy was the first area of law for which ROSS was designed to be used and a recent study commissioned by ROSS found its AI platform outperforms Westlaw and LexisNexis (2) in finding answers on real-world issues in federal bankruptcy law. The ROSS prototype was trained to read and process Ontario corporate law decisions and statutes, or bankruptcy law documents, by a legal memo service that ROSS is developing. The company is going in new directions, including a new AI-powered legal memo service. Lawyers have said the results are“indistinguishable from a memo written by a lawyer.”
What if I told you that AI has the potential to predict how your legal case will perform in court? Mind boggling or just science fiction?
AI predictive technology analyzes past legal reference data to provide insights into future outcomes. This new generation of legal technology has been made possible by advances in machine learning and AI. Legal analytics quantitatively could forecast a judge’s holding in litigation, or an examiner’s allowance of a patent application. This brings companies a new layer of information in making legal choices.
Premonition describes itself as giving a “very, very unfair advantage in litigation.” The Miami-based Artificial Intelligence company boasts Motions Analyser which the company says can increase the odds of winning in litigation by showing the win rate of motions in a particular court. For example, based on statistics the company suggests a change of venue may be the best motion for a specific case type in a particular court. Premonition, working with Fortune 500 companies, has a number of applications including “going down to the lawyer you need to represent you for a particular case type.”
Like it or not, we are currently living in a digital age and it is one that is only going to continue marching in a direction with a greater emphasis on using tech to reduce or eliminate labour intensive methods. A quick glance may lead one to think that the robot uprising is indeed upon us and that we will all be replaced. Not so fast we say! AI and technology is not an end unto itself. To deliver the solutions that clients are seeking does not only require pure technology but also requires the marriage of several different disciplines (commercial understanding, the practice of law, process management, good collaboration tools etc). We see AI creating more efficient lawyers and changing the industry into one that focuses on a more tech and process driven legal delivery system that truly delivers value to businesses. Welcome to the start of tomorrow : )