Whether you watched IBM’s “Deep Blue” defeat a world chess champion, interacted with a chatbot while shopping online, or simply marveled at Amazon’s ability to suggest new offerings tailored to your interests, chances are you’ve already experienced artificial intelligence, or AI, at work.
Often defined as the ability of a machine to perform what the human mind can by processing and analyzing large amounts of data and reach rational conclusions, AI is rapidly spreading from the business arena to the legal sphere. But AI’s rise has raised questions within the C-suite. According to Deloitte’s recently released survey “State of AI in the Enterprise,” four out of 10 executives had “a high degree of concern about the legal and regulatory risks associated with AI systems.” A LexisNexis survey recently revealed that only 20 to 25 percent of legal departments use AI in at least one area, compared to the 40 percent in finance and 54 percent in HR that other studies have documented. Yet, despite this slower adoption, a growing number of corporate legal departments and private law firms are embracing AI.
At Coca-Cola’s legal department, for example, artificial intelligence tools have streamlined the contract-drafting process for many matters, reducing the time that lawyers had been spending on review from as much as 10 hours to about 15 minutes. Not only does this improve efficiency, observers say, it also results in more consistent agreements while freeing up the legal team for more strategic, less mundane tasks.
JP Morgan Chase invested in its own proprietary AI platform—COIN (short for Contract Intelligence)—in 2017 to review commercial loan agreements. The move has reaped big dividends for the financial giant. Chase estimates that its automation of such work has saved it 360,000 hours of work by lawyers and loan officers annually. So it’s no surprise that its use of COIN has expanded to more complex matters, including credit default swaps and custody agreements.
A Competitive Edge
In many private law firms, AI is increasingly seen as the key to accomplishing the drudge work that has long been the province of young associates, contract counsel, and paralegals. From assisting with document review and due diligence to legal research and drafting routine documents, the use of AI tools has yielded a competitive edge for some. In April 2018, employment firm Ogletree, Deakins, Nash, Smoak & Stewart announced a licensing deal with LegalMation. Using the company’s AI platform to analyze a plaintiff’s lawsuit and automatically draft a responsive pleading and a set of draft responses to discovery requests saves Ogletree’s clients “roughly $3,000 per case,” says Dallas-based partner Ron Chapman Jr. Leveraging technology to do in a matter of minutes what once consumed up to eight hours represents “a very real and tangible savings for the client, and it frees our lawyers up to be more strategic and less tactical,” Chapman says. “We think it’s a significant advantage.”
Ogletree’s Austin-based chief knowledge officer, Patrick DiDomenico points to AI’s potential. “This tool is reading, understanding, organizing, and analyzing thousands of documents and collecting so many data points. So with millions of data points from thousands of documents, we can use that data to predict the viability of cases, how much they might cost, potential outcomes, etc.,” he says. “We’ll be better equipped to advise our clients. The possibilities are endless, and very exciting.”
“AI systems aren’t going to remove the need for lawyers. They’re just going to improve the effectiveness and efficiency of what lawyers can do,” Arruda says.
Thomas Suh, chief operating officer and co-founder of LegalMation (and a former practicing attorney), couldn’t agree more, and bristles at the “robot lawyers taking humans’ jobs” scenario put forth by AI’s critics. “I actually think we’re making lawyers more human, because now we can give them time back,” he points out.
Other firms are warming to AI’s applications in intellectual property matters. ROSS Intelligence, which uses IBM’s Watson AI technology, offers cutting-edge AI solutions to enhance legal research, enabling users to ask legal questions in plain English. According to Jeff Price of Dallas’ Quilling, Selander, Lownds, Winslett & Moser, “I recently worked on a project to determine the best damages model for a trademark infringement case. With the help of ROSS, I quickly found several cases that had analogous fact patterns. It also identified cases that provided additional grounds for the recovery of damages that I hadn’t previously considered.”
Andrew Arruda, CEO and co-founder of ROSS, says the company’s breakthroughs in legal research software using Natural Language Processing can cut the time it takes for legal research in half, adding that lawyers are finding cases they likely would not have discovered. Arruda scoffs at the notion of AI replacing lawyers. “The new AI systems aren’t going to remove the need for lawyers,” Arruda says. “They’re just going to improve the effectiveness and efficiency of what lawyers can do.”
Cost Savings, Tech Limitations
Even proponents of AI’s use in analyzing vast amounts of data to predict such things as likely verdict ranges or a judge’s predispositions based on past rulings agree that technology has its limitations. Michael Smith, a veteran patent infringement litigator with Sherman-based Siebman Forrest, uses the platform Docket Navigator for such data analysis. But Smith says while such predictive analytics can be “a very useful tool,” he warns that it may not tell you the whole story. Knowing that a particular type of motion has failed most of the time, he says, “may tell you more about the types of cases than it does the judge’s predispositions. I repeatedly have to caution people that their opponent is not the judge’s tendencies or prior rulings, but the facts of the case.”
Nevertheless, the use of AI for predictive analytics remains one of the biggest attractions for lawyers and their clients, and one on which legal technology providers are banking. LexisNexis recently acquired the AI company Ravel Law, and has used that technology to create Context, a judge and expert witness analytics tool. Drawing upon its vast database of court data, case law, and orders, Context offers insight into the rulings and decision-making processes of judges. Lex Machina, another company, similarly provides AI tools for predicting likely outcomes, particularly in high-stakes patent cases. Whether for data analytics or for streamlined legal research, the use of AI has become so widely accepted that in a recent Canadian case, the judge chastised one side’s lawyers for their failure to use AI to keep research costs down.
In fact, the potential for cost savings is arguably the most significant factor driving adoption of AI. For years, companies have been pressing their outside counsel for more competitive rates, alternative fee arrangements, and value-added approaches to billing. Not only are AI providers aiming to make lawyers more efficient, they’re also helping companies watch the bottom line. IBM Watson Legal has developed OCI (Outside Counsel Insights) to review legal bills for in-house legal departments and provide insights intended to eliminate as much as 30 percent of annual spending on outside counsel and to facilitate fixed-fee pricing. OCI doesn’t simply tell you what a lawyer did, but also analyzes how the lawyer is working, the order in which tasks were performed, and provides an understanding of what the lawyer intended by a given task in the context of a company’s billing guidelines.
Saving clients money and time through AI in various practice areas has become a calling card for some firms. Natalie Pierce, a shareholder at Littler who co-chairs the firm’s Robotics, AI, and Automation industry group, touts the firm’s use of AI tools such as Lex Machina and CARA by Casetext, as well as employment of analytics project managers. “We’ve completed 1,350 projects thus far,” she says, “resulting in millions of dollars in new revenue and corresponding millions of dollars in cost savings to our clients, due to the increased efficiencies and better results.”
So, at the end of the day, are lawyers on the endangered list? From AI providers to general counsel and their outside lawyers using AI, the consensus seems to be that while legal professionals at the lowest levels may experience declining numbers, AI will benefit the profession by enhancing what lawyers can do and freeing them up for more important, fulfilling work. Perhaps AI will let computers tend to the trees, so attorneys can take care of the forest.
John G. Browning is an attorney, award-winning journalist, and book author.