While the skills and knowledge of lawyers remain key to success for law firms across the country, the role of technology in the legal profession continues to grow. Here’s what legal tech and innovation will look like in 2021.
The legal profession has been significantly disrupted in recent times by the advent of new technologies that aim to increase efficiency and reduce human error.
This has driven big shifts in areas like contract management, discovery, and legal research as well as back-end processes like billing and practice management.
And the law tech revolution is far from over. A new wave of innovations is on the way in 2021, adding to the tech toolkit available to Australian lawyers. Here are some things to watch out for.
More Australian law tech on the way
At SettlePro, a Melbourne-headquartered firm that helps plaintiffs reach fair financial settlements in legal disputes, the company’s co-founder, Ben Waterson, is putting the finishing touches on an online calculator to assist family lawyers fast-track property settlements for clients. It is set to be rolled out in Australia early this year.
Targeted at small firms, the calculator uses a similar algorithm to that built into Waterson’s consumer product My Fair Share to speed up the property settlement calculation process for lawyers, reducing it down to entering client details into an online questionnaire.
Waterson, himself a family lawyer, says it’s a game-changer for the family law sector because, with the press of a button, the calculator can provide the percentage and amount of the asset pool a client is likely to receive, based on an algorithm that crunches similar cases.
“It enables every family lawyer to see what a court is likely to order in each matter and accordingly advise their client and form a view about potential settlement,” he tells LSJ.
“Second, it allows the lawyer to save the client’s relevant financial and other information in a folder, with easy access, which can be updated along the way when new information about the parties’ assets may become available, like valuations, bank statements and the like. Each time the information is updated, so is the result.”
He says small firms without a strong track record in family law are likely to benefit most from the unique tech as it will enable them, via the calculator, to compare a client’s circumstance with numerous similar cases, and then get them an instant result.
“They effectively have a readily available ‘experience’ based on numerous cases and scenarios, in a very affordable and accessible way,” he says.
Legal tech for post-COVID-19
Across the border, at Sydney-headquartered Smarter Drafter, there’s a focus on helping solicitors in the coming year do business more effectively in a post-coronavirus world.
Founded in 2013, the legal tech company has developed proprietary technology that automates the drafting of legal documents. If currently offers 96 different types of automated legal documents across practice areas including estate planning, commercial, property, employment, intellectual property and family law.
The company’s founder, David Lipworth, says in the wake of the coronavirus pandemic it is launching a product that enables small firms to embed document automation services in their own websites.
“As lawyers have moved out of office towers to work from home, and consumers have moved out of shopping centres to buy online, COVID-19 has taught us that, if you aren’t online, you’re nowhere,” Lipworth tells LSJ.
“Our e-commerce portal upgrade enables a law firm to pick the documents it wants to offer and, with just one line of code, embeds an entire online legal portal in their website enabling clients to customise and buy those documents themselves online.”
Along with the introduction of widespread remote working, COVID-19 also put a focus on cost reduction, which Lipworth says is another priority for the company’s “plug-and-play” document automation service.
On this point, he says while Smarter Drafter is able to automate “sophisticated and high-value documents” like shareholders’ agreements, business sale agreements, IP licence agreements, and wills with trusts, it’s especially attractive to smaller law firms that don’t have in-house knowledge management teams and want to outsource high-quality content.
“All of the partner-level legal knowledge is baked into the system,” he explains.
“Our document production engine analyses the answers from the online questionnaire and follows a matrix of logical rules to make decisions, just as an expert human lawyer would do, about what should and shouldn’t be included in the final document.
“The fully-customised document is then drafted and delivered to the lawyer in both Word and PDF format instantly.”
Meanwhile, Sydney-based Smokeball CEO Hunter Steele predicts more firms in the wake of the pandemic will take up his company’s “autotime” feature, which augments the cloud-based practice management software, aimed at SMEs, to track hours worked by lawyers.
According to Steele, while many law firm bosses don’t plan to return their staff to the office full time, they’re looking for ways to accurately bill for their services while working from home.
This is where “autotime” can help, Steele tells LSJ.
“Where [the tool] comes into its own with the pandemic and everyone working from home is that we know what everyone is doing, [and] we can give accurate reports to firm owners about what everyone is doing all day, every day because it’s tracking everything they do,” he says.
“We’re not trying to be Big Brother in terms of a watchdog on their desktop, but what we’re saying is, are they being productive in the work that they’re actually supposed to be doing?”
He says it also solves issues that have arisen with increasing complexities of billing for items like emails that often get missed on lawyers’ timesheets. The outcome of his tools, Steele says, is while lawyers bill on average 2.1 hours day (according to his research), his clients average 4.1 hours per day.
Lawyers often “feel like a 10-minute email is not enough to bill for, but the problem is that they do about 40 of those a day and then they’re losing a lot of time”.
The slow uptake of automation
Despite the proliferation of legal tech, recent research shows many firms, especially smaller ones, have been slow at adapting to the new environment.
Research from the US-based International Legal Technology Association asked law firm respondents to rate the level of their artificial intelligence (AI) adoption from a score of one to five, with one meaning “just a proof of concept” to five representing “integral to our daily operations”.
Interestingly, the use of AI tech for e-discovery and document review returned the highest average of 3.5, followed by legal research at 2.95. At the other end of the scale, insight and predictive tools scored 2.29, with billing and spend management coming in at 2.21.
For some lawyers, slow uptake of tech is due to concern about potential errors or individual circumstances not being accounted for in algorithms. As the American Bar Association (ABA) noted recently, there is a degree of substance to these concerns, with the organisation pointing to “significant shortfalls” of the AI-based legal tech currently on the market.
These include, according to the ABA, that AI is only as strong as the algorithm that underpins it, that AI lacks human reasoning which allows human lawyers to evaluate merits and likelihood of success, and that machines still lag humans at oral advocacy.
For smaller firms yet to get on the tech bandwagon, Jason Ryan, principal at legal efficiency consultancy Engo, urges making “general matter management” a focus for the coming year.
Ryan points in particular to discovery which no longer needs to be done “purely manually”.
“Everyone used to get the boxes and go through the papers, but there are a series of tools now that have a combination of an outsourced model, or you go and use the tool that scans and documents and tells you whether they’re ‘amber, red or green’. Those kinds of tools are pretty common and not very expensive,” he tells LSJ.
His advice for small operators, who may have previously been put off by the complexity of deploying e-discovery tools, is to take another look at the tech given recent advances.
“You can actually configure those products yourself, whereas in the past paying for a coder to do that was really, really expensive so many people didn’t take an off-the-shelf product.
“Now they’re very easy to configure so my message to firms would be don’t shy away from the tech that allows you to triage and do discovery much more efficiently than in the past.”
Contract automation a must-have
Another must-have piece of tech this year, Ryan says, is contract automation software.
He points, for instance, to the services of a company like Sydney-based CheckBox, which helps firms automate documents and workflows with a “no-code drag-and-drop platform”.
“With things like Checkbox, which is a pretty cool tool, you can build your own workflows and decision trees yourself, you don’t need to be a programmer to do that, and then you can use the logic and it can draft the contract for you,” Ryan says.
“My take on this is that if you’ve got a practice that does repetitive work, it’s worth investing in the logic to build those contracts even though it may take a lot of time.”
The way he sees it, lawyers across Australia should be in that headspace by 2021, especially if they’re charging a fixed price for a template.
“I think there’s a lot of value to be grabbed by charging differently and getting a tool to build it faster for you,” he says.
Even so, Ryan notes there are dangers, especially for legal tech novices. He says while there are around 1,100 law software programs on the market, many don’t do what they say they do, and so it pays to do some solid research before splurging on licences.
Lawyers should also make sure to go over the details of each contract generated automatically to ensure it applies to individual situations and clients.
“You can be a little bit at sea, however if your requirements are specific enough, like it’s just building one type of contract, there are systems where you can work with a particular provider and they’ll be able to do it for you, and you’ll be able to negotiate on licenses.”
The Internet of Things: the next frontier
While some legal tech, like document automation, has already become de rigueur for many firms, other innovations are only just emerging.
Many more far-out legal technologies, still emergent, are linked to the so-called Internet of Things (IoT) – the concept of connecting any device with an on and off switch to the internet.
Based on connecting sensors to computer systems via networks, some popular IoT applications include home products like Amazon Echo and Google Nest, wearable tech like the Apple Watch or FitBit, or devices for workplaces or cities, like smart air quality monitors.
Global consulting firm McKinsey estimates that the IoT will have a massive global impact in the next decade and reshape many industries worldwide, with some of the sectors most altered likely to include manufacturing, transport and engineering.
Griffith University’s John Flood predicts that the legal profession will also feel the IoT impact.
Flood, a professor of law and society at the Queensland university, points, as an example, to blockchain-related changes forecast to hit supply chains over the next five to 10 years.
“In supply chains, you can have what are called smart contracts, which are technically neither contracts nor smart, but they are a way of putting code onto a blockchain that will pay when something is done,” he tells LSJ.
“Let’s say I’m delivering cotton from Australia to Los Angeles in a container ship. Normally that would involve letters of credit, letters of guarantee et cetera. Whereas if you did it as a smart contract on blockchain, there’d be all types of sensors on the ship, and payments would occur as the voyage takes place, and when it arrived the final payment would be made.”
Shorter-term, Flood nominates legal research tech as interesting for solicitors to explore.
He notes the rapid rise of US-based Ross Intelligence, a legal research tech company, which launched in 2014 and was recently forced to shut down due to a legal dispute with multinational media conglomerate Thomson Reuters. Ross developed AI tech, using an IBM-Watson super computer, that was able to read and answer questions about the law, accelerating legal research processes.
“IBM Watson also does cancer diagnoses. It’s being used in all kind of areas, but its law aspect is growing now so I think we’ll find more super computers being used,” Flood says.
“[For solicitors] this kind of thing is all cloud based, so you’re not having to install anything.”