"In the not too distant future, exponential technology could upend the $650-billion-dollar legal industry — or, there will be a $78 to $120 trillion-dollar opportunity for agile players who are prepared.”
— Rohit Talwar
NATIONAL HARBOR, Md. — At ILTACON 2016, Rohit Talwar, CEO of Fast Future, spoke about the disruption in the legal industry occurring around us and more precisely which technologies will have the largest impact on law firms in the near future.
In his discussion “Building the Exponential Law Firm,” Talwar began with the baseline of Moore’s Law — the theory that processing speeds of computers double roughly every 12 to 18 months. Building on that, he added what he considers to be the core of this exponential growth: machine learning. These are machines with the ability to create visual perception, reasoning, planning, intuition and decision-making all starting from a simple ruleset.
The Faster Pace of AI
In his fascinating discussion, Talwar pointed to a recent development with Google, using DeepMind, its artificial intelligence (AI) computer, and playing Go — one of the most complicated games known to man. In this scenario, Google did not program the computer, only gave it rules of the game.
Fast Future CEO Rohit Talwar
In short order, the world AlphaGo champion lost 4-to-1 to DeepMind in dominate fashion. While this happened in early 2016, this was not expected to be possible until 2026 — a full decade in the future.
What Talwar was illustrating through the AlphaGo example and countless others is that AI is here and is being used all around us. It is becoming pervasive, embedded, augmented, immersive, and connected to a multi-sensory network.
There were a host of various legal sector applications he cited as occurring now, such as those in areas such as:
- Automation of Legal tasks and Processes — Firms have developed a computer program that can sift through government regulatory registers to check client names for banks, processing thousands of names overnight. Others have created an automated personal injury claim case assessment program.
- Decision Support and Outcome Prediction — This includes advancement in document review in M&A, that extracts and analyzes key contract provisions and provides rapid summary and analysis; or analyzes entire briefs to find potential missing points of law, or alternative arguments not cited; and premonition programs can predict which lawyers win with which case types and which judges.
- Creation of New Product and Service Offerings — This includes development of online document generation for startup formation; online education impact analysis; and online chatbots that can advise on privacy law and generating client-specific compliance policy in real-time.
- Process Design and Matter Management — Firms have developed automated generation of process flows and project plans; real-time impact assessment of process changes on timeframes, resources and costs; and come up with suggested narratives based on how clients react to and prefer to receive information
- Practice Management — This involves benchmarking across practice areas for comparable tasks from document production through to completion of key stages in a matter; identifying potential human resource challenges using social media sentiment analysis of comments; and providing dynamic modelling of alternative billing approaches and matter-team formation based on personal characteristics.
- In-house Legal Applications — Some firms have developed a lawyer advisory app that can, for example, create an ordering of corporate contract negotiations; other tech entities have created apps or programs that can streamline and standardize regulated superannuation funds’ breach assessment processes, and that can help financial institutions meet requirements, determine applicable regulations in terms of situations concerning money laundering, liquidity risk and financial crimes.
The Coming Blockchain Revolution
Over the next several years Talwar said that he believes blockchain technology will have a monumental impact on law firms, providing firms with the ability to store information in a secure distributed ledger. In fact, Goldman Sachs estimates a cost saving of $4 billion annually on its legal bill by moving real estate titles to distributed ledgers that use blockchain technology.
Talwar pointed out that law firms have a huge potential upside with all of the technology that is emerging. However, he warned, if a firm does not adapt and become agile it will be very difficult for it to keep up with the pace of change that will be occurring, and ultimately its intransigence will make it difficult for the firm to win business.
In the second phase, being tested right now, the Decentralized Autonomous Organizations (DAOs) will execute contracts free of human intervention; and in the future, we’ll reach Algocracy, a full automation of the law.
In this scenario, we would have a complete rewriting of the law that would be embedded in software. This would allow for automatic fines, standardized open source legal documents and automated judgments. For example, if someone stole a candy bar from a convenience store, their own body camera would catch them and automatically impose a fine on that person. A payment would be removed directly from their bank account, and would be executed without human intervention.
Not surprisingly, Talwar pointed out that law firms have a huge potential upside with all of the technology that is emerging. However, he warned, if a firm does not adapt and become agile it will be very difficult for it to keep up with the pace of change that will be occurring, and ultimately its intransigence will make it difficult for the firm to win business.
The wonderful aspect about this change is that it is all new. Most of these technologies are not governed by law, which creates an incredible opportunity for legal advice because clients have to understand how to handle these new technologies.