[WSBAPT] FW: [WCMLS]How Will Advanced Technologies and Nonlayer Entities Effect the Future Practice of Law

[Glenn Price]

Dear Friends & Colleagues: 

 

The article below is from this week's Florida Bar News. You may find this
to be a thought provoking look into what the future may hold. In some
respects, the future is now.

 

Best wishes,

 

Glenn D. Price

 Vision 2016
<http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa9
00624829/ee50a8fd1473770185257c7b0047d954/Body/0.F2!OpenElement&FieldElemF
ormat=gif> 


‘Legal freegans’ are looking to ‘eat your lunch’
Advanced technologies and nonlawyer entities are encroaching on the
traditional practice of law

By Mark D. Killian
Managing Editor

In the 1880s, a group of experts was asked about New York City’s future.
While the prognosticators correctly predicted the city’s population would
swell exponentially, they concluded New York would become uninhabitable
due to the waste generated by more than six million horses the city would
need. The impact of the internal combustion engine and electricity was not
taken into consideration.

 John Stewart
<http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa9
00624829/ee50a8fd1473770185257c7b0047d954/Body/0.15E4!OpenElement&FieldEle
mFormat=jpg> When the Vision 2016’s Technology Group sat down at the Bar’s
Winter Meeting in Orlando, Chair John Stewart told that story (taken from
Jeff Stibel’s 2013 book Breakpoint and discussed in an article by William
& Mary law ProfessorFrederic Lederer in the January/February issue of
<http://home.innsofcourt.org/for-members/current-members/the-bencher/recen
t-bencher-articles/januaryfebruary-2014/some-thoughts-on-technology-and-th
e-practice-of-law.aspx> The Bencher) as a parable of the difficulties in
discerning how emerging technologies and other trends will affect the
future practice of law.

Nevertheless, the 68 members of the Bar’s
<https://www.floridabar.org/tfb/TFBComm.nsf/6b07501281c8e567852570000072a0
b9/4c5a8457cb1d17ef85257bd50052b510!OpenDocument> Vision 2016commission
continue their three-year mission to identify the challenges that lie
ahead for the profession and to set out a framework for meeting them. In
addition to technology, the commission is also focusing on the future of
legal education, Bar admissions, and the delivery of pro bono/legal
services. 

Bar President Eugene Pettis said the commission will spend the next six
months collecting information and educating themselves on the issues at
hand.

“It is important that if we are truly going to shape the future and be the
architects of our future, we are learned in the subject matters we are
going to address,” Pettis said.

Jay Cohen, the commission’s administrator, asked the four subgroups to
spend the afternoon narrowing their focuses to three to five key issues
each. (See story,
<http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa9
00624829/53b3dc653ecdd09685257c7b00491d14!OpenDocument> here.) 

Jordon Furlong, a Canadian lawyer and consultant to law firms on strategic
and tactical issues with Edge International, told the Technology Group the
biggest issues the profession will face in the next three to five years
include:

* Technology that performs a legal or lawyer function.

* Online dispute resolution.

* Technology assisted review.

Companies entering the legal market, including LegalZoom and RocketLawyer,
can draft, in a matter of minutes, “airtight, top-notch contracts,” pulled
together without the use of a lawyer, he said.

“They are really not doing anything that a law firm could not be doing
right now, as well, or frankly could have begun doing five years ago,”
Furlong said. 

But that’s just the beginning, as more powerful and sophisticated
technologies start pouring into the legal marketplace.

“Software,” Furlong said, “can answer straightforward legal or regulatory
or compliance questions without the involvement of a lawyer.”

One such company is Neota Logic, which Furlong said is already being used
by law students at Georgetown and some large law firms.

On its website, Neota Logic touts itself as able to deliver knowledge in
an operationally useful form as expert systems that can be consulted
interactively online or embedded directly in business systems. 

“We transform expertise into answers and action in law, compliance, risk
management, accounting, human resources, environmental regulation,
medicine, and other fields,” according to the company. “Our technology,
the Neota Logic System, solves problems in many fields, just as Microsoft
Excel solves financial and numerical problems without programmers, quickly
and efficiently.”

While Furlong said predictive data technology is still in its infancy,
interviewing software is quickly growing in power, traction, and users.

Are these machines practicing law? 

“Yes,” Furlong answered — to a certain extent.

He threw out a few questions:

* Should we ban them? “The effort will be interesting, but I’m not sure
will be very successful.”

* Should we ignore them? “I think that would be unwise.”

* Should we adopt them? “Instead of worrying about how technology like
this would replace us or knock us out of our position, can we find ways to
co-opt it —find ways to integrate it into our practices in order to make
those practices more effective and deliver more value to our clients?”

Online Dispute Resolution
Online dispute resolution is already well established, Furlong said, with
companies such as eBay and PayPal already using ODR to resolve upward of
60 million disputes per year.

“This has the potential to get really big really fast — resolving disputes
without going to a lawyer or judge,” Furlong said. 

One online dispute resolution company is Fair Outcomes, Inc., which
Furlong said was created by a Boston lawyer and uses game theory to
eliminate disputes in both business and family law.

Fair Outcomes, Inc., says on its website that it provides parties involved
in disputes or difficult negotiations with access to newly developed
proprietary systems that are grounded in mathematical theories of fair
division and of games. 

“Our founders and staff include game theorists, computer scientists, and
practicing attorneys with extensive experience in designing,
administering, utilizing, and providing consulting and online services
with respect to such systems,” according to the company.

“Is ODR in a position where it is going to replace some aspects of ADR?”
Furlong asked. “Full replacement? I highly doubt it, but displacement or
moving into that field? Quite possibly.”

Furlong anticipates advancements in ODR will ultimately reduce the number
of cases litigated in court.

He said the Vision 2016 commission should consider if courts should adopt
these technologies to use in affiliation with its other dispute resolution
tools.

Furlong said ODR technologies most likely will appeal to the latent legal
market and will be seen by the public as something that improves access to
justice and legal services, which will make it difficult for lawyers to
make the case that these types of services should not be offered.

Assisted Review
Also on the horizon are assisted review technologies that do not require
the active participation of lawyers, or, at the very least, the central
participation of lawyers.

“Predictive coding is basically computer software that, instead of saying
to a lawyer: ‘Here are 10,000 emails; read each one and figure out what is
relevant to our case,’ the system uses an algorithm, scans a sample of
each document, and can make accurate forecasts of which are significant
and which should be used,” said Furlong, adding that it is similar to
software used in spam filters.

Looking at long-term ramifications, attorneys also need to be concerned
about predictive analytics or the whole area of “Big Data,” such as IBM’s
Watson, which can understand natural-language questions and access huge
amounts of information to come up with answers. While Watson is currently
being used in medical fields, Furlong expects it eventually will turn to
the law.

“When it does, we have to be clear about the impact it will have,” Furlong
said.

In January, IBM announced it plans to invest $1 billion in its IBM Watson
Group, according to The Economistmagazine. 

“If you are a litigator, I imagine a point in the not very distant future,
where if a client asks you: ‘Will I win this case?’ and you will be
actually able to provide a predictive response based on analytics and
data.”

Legal Freegans
University of Miami law Professor Michele DeStefano, founder of
LawWithoutWalls —which strives to develop the skills necessary to provide
effective legal services in today’s global, multi-disciplinary, and
cross-cultural marketplace — said as the legal profession changes, lawyers
need to grow with it.

“People outside of the law keep saying, ‘When is law going to change?’
But, as you all know, we all have actually changed a lot over at least the
last five years, and some of those changes have been brought about by
globalization.”

While globalization offers many benefits, it also presents challenges. No
longer are lawyers just competing for business with each other; now
nonlawyers around the world are vying for work traditionally associated
with attorneys, especially when it comes to support services, she said.

Any legal work that can be defined, repeated, and is predictable is ripe
for legal process outsourcing, or LPO, DeStefano said.

Some of those companies include:

* Black Hills IP, a U.S.-based company that provides outsourced legal
support services. Its legal support services include intellectual property
docketing, paralegal, proofreading, and annuity management services. The
company says it uses advanced automation software to make paralegal work
more accurate, efficient, and cost-effective. 

* Pangea3 is a company that DeStefano says provides many law-related
services, IT, and back-end services that are profit centers for many U.S.
law firms. Headquartered in New York and Mumbai, India, Pangea3 provides
legal services and intellectual property services to in-house counsel in
U.S., European, and Japanese corporations, and attorneys in international
law firms.

* KM Standards describes itself as a knowledge-management company using
“technology delivering the first and only contract analysis software.” KMS
says it has brought “innovative search engine analyses to the field of
transactional practice.”

DeStefano said the technological changes now entering the legal
marketplace are often referred to as “disruptive innovations.” 

“To differentiate, you do need to innovate,” DeStefano said. “At least for
us to stay profitable as lawyers, we need to change what we are doing.”

DeStefano warned there are “legal freegans” out there who are looking to
“eat your lunch.” 

“They are trying to give to our clients what we do, and they are not
lawyers,” DeStefano said. “But the problem is: Who can tell the
difference? What we are defining as law versus non-law has changed
dramatically.”

One of the challenges is that these nonlawyer companies are offering the
same services as lawyers at a much lower or the same cost, and many of the
companies entering their field are large accounting firms “that are not
bound by the same rules of professional conduct that we are.”

DeStefano said the result is new law firm models and ways to deliver legal
services, such as Riverview Law, a U.K. company that aims to change the
way organizations use, measure, and buy legal services through fixed price
annual and multi-year contracts, plus litigation and advisory packages. 

Another is Axiom Law, a 1,000-person firm that bills itself as “experts”
in the business of law. “We experience a nerdy excitement from helping
general counsel solve business problems, and we do it through three forms
of engagement: insourcing, outsourcing, and projects,” says Axiom Law’s
website.

“Axiom Law is changing the game,” DeStefano said. “They are not a law
firm, but I would bet 80 percent of people surveyed in the law market that
have ever heard of them or looks at their website would think they are.”

Axiom Law says it is currently serving nearly half of Fortune 100
companies through 12 offices and four centers around the world. DeStefano
said Axiom Law opened in 2000, was profitable by 2003, and has raised more
than $90 million in private equity, including investment by J.P. Morgan.

Axiom Law’s niche makes sure whoever uses its services is an in-house
lawyer, in order to avoid running afoul of unlicensed practice of law
statutes, DeStefano said.

Services are offered “at a fraction of the cost,” of traditional law
firms, she said. 

“But, believe me, they are offering legal services — or what you and I
would call legal services,” she said.

On the other end of the spectrum is the aforementioned LegalZoom, going
after the legal consumer directly, and also mid-sized corporations. 

“You can get divorced online,” DeStefano said. “You can draft contracts
online.”

When LawWithoutWalls went looking for trademark protection, DeStefano
said, she was looking at an $8,000-to-$10,000 expenditure using the
traditional legal market. LegalZoom did the job for less than $1,000.

Like LegalZoom, RocketLawyer is also focusing on mid-level corporations,
offering all the forms LegalZoom does for free, but charging for lawyer
and consultant services, DeStefano said.

Another new company is Legal Force, which DeStefano said maintains an
in-person kiosk in Palo Alto, and everything else is offered online.

“Blending may be the future . . . a lot of virtual interaction, but when
you need a person, you can have them,” she said.

Jim Calloway, director of the Oklahoma Bar Association’s Management
Assistance Program who has chaired the ABA’s Tech Show, said with more
artificial intelligence functions entering the legal marketplace, lawyers
are going to be forced to pick up the pace.

“We, as bar associations and as court systems, proceed very cautiously and
deliberately. And, too many times in meetings, we are very good as a
profession at poking holes in other people’s arguments or standing up for
the status quo. We are approaching a time — largely because of technology,
but also because of consumer demand — that we are going to have to be more
dynamic and be more nimble,” Calloway said.

He said technology is already pervasive in law firms, and there is no
getting around that technology is going to push aside a lot of barriers. 

“Whether we think it is a good thing or a bad thing is going to be
irrelevant. It is going to be something that happens,” Calloway said.

Furlong used a football analogy to describe the future role of lawyers.

“We need to look at various areas of the legal market and the various
functionalities of legal services and ask ourselves if we are the
quarterback, the ones who direct the entire offense and are in charge of
everything. Or, are we like a wide receiver, an essential member of the
offense but not necessarily involved in every play? Or, are we a
situational third-down slot back, which is to say a specialist brought in
maybe one play out of 10?” he said. “I don’t know the answer to that, but
I do think there are factions in the legal market in which lawyers can
play any of those roles.” 

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