AI in the Legal Sector: Debunking the Myths

February 1, 2017

 Last year, artificial intelligence came of age – at least
as far as the headline writers were concerned. It was almost impossible to look
at any news media site or open a traditional newspaper without reading about
the latest scare story of robots taking over from humans in a whole variety of
jobs. Within 20 years or so, the story invariably ran, most of us would be
redundant as we become subject to a silent army of sinister machines, with infinitely
superior brain power and flawless operation. These machines would never go on
strike or complain, they would need no sleep and they would work without pay. The
message was clear: humans had better find something else to do.

Nowhere was this dystopian vision more prevalent than in
media covering the commercial legal sector. Document drafting would
automatically become the task of AI systems, leaving the traditional law firm largely
denuded of its industrious young lawyers as intelligent machines housed in data
centres from Belfast to Bangalore would do all the hard work, unceasingly round
the clock. Legal Business magazine even
devoted 20,000 words to the topic over 30 sumptuous pages, which included the
following gloomy forecast: ‘A report from two Oxford researchers, which argued
that 47% of jobs in the US were at high risk of being replaced by intelligent
machines, concluded that paralegals and legal assistants were in the high-risk

We have evolved to react strongly to perceived threats – consequently,
bad news sells. Across a spread of legal publications, myriad commentators
concurred that AI would ultimately decimate the number of lawyers: the only
question was not if, but when. These were often accompanied by clichéd images
of robots wearing suits sitting in front of a computer screen. We’ve been here
before, of course. Legal futurologist Richard Susskind has been predicting the
end of lawyers for a generation or more, even if his original algorithmic
rule-based programming approach, formulated in the 1980s, was long ago
dismissed by many of the leading players in the AI community. 

New approaches to AI are now underway, and the real
winners in this Brave New World will be a new breed of legal technologists and,
in particular, the tech companies, such as IBM and its celebrated Watson, a
question answering (QA) computing system which has become the most famous
supercomputer in the world. In 2011, it won $1m first prize in the US game show
Jeopardy, while its predecessor IBM system, Deep Blue, defeated Garry Kasparov
a world chess champion, and more recently, a machine learning system, Google
AI, beat Lee Sedol one of the world’s leading GO players.  

Beyond these notable achievements in game theory, Watson
has made a substantive practical contribution to the world of work. Since 2013,
it has been used for diagnostic applications by US cancer doctors, helping them
to make more informed diagnoses based on the rapid analysis of historic medical
data. Law firms are also beginning to use multiple AI applications, including
Watson, to enhance their legal research functions. This allows younger lawyers
to deliver much faster and more comprehensive analysis of contracts and

Last year saw the first approval by an English court in
the use of predictive coding in document review when an AI system was trained
to evaluate large volumes of data to identify and classify relevant documents. In
starting to make a real impact on legal practice, the beneficial applications
of AI combine a spread of different technologies. Machine learning, underpinned
by neural networks and powered by an enormous cluster of parallel computers,
gives today’s AI the ability to rapidly analyse vast datasets and to identify patterns
infinitely more quickly than humans could achieve. 

A generation of lawyers have used laptops, smartphones
and the internet as everyday tools. AI is set to become an important supplement
to these existing technologies. But, in assessing what AI has already achieved
for the legal sector and, more significantly, what it has the potential to
achieve, one factor separates fact from fiction: AI in all its current manifestations
will remain a tool. Perhaps an incredibly useful tool, but a tool nonetheless. It
will not replace lawyers, but instead better inform their practice, and liberate
them to spend more time on higher value work and engaging with their clients. 

What is the evidence so far as to how law firms are
embracing and using AI? The big five UK law firms (the magic circle) provide a
good starting point. Linklaters was the first of their number to sign a deal
with an AI service provider, UK-based RAVN. 
Clifford Chance and Freshfields Bruckhaus Deringer have entered separate
partnerships with Canadian AI software provider, Kira Systems. Meanwhile, Slaughter
and May is working with Luminance Technologies to test AI technology which will
streamline the due diligence process. Finally, Allen & Overy has created a
service to assist banks cope with complex regulations: MarginMatrix. This
automates document drafting with the drafting time reduced from three hours to
three minutes. 

It might be reasonable to expect that such technological
advances might provoke a reduction in lawyer headcount. But with the magic
circle, this has not happened. Set against the background of these AI
developments, the number of lawyers that they employ has either remained the
same or increased slightly. 

The best predictor of future size – the number of
trainees that they take on each year – has not decreased. Indeed, compared with
five years ago, the number has gone up. The reality is that, while they are
busy exploring and implementing AI systems into their offering to clients, big
commercial law firms are not cutting their headcount. If anything, the reverse
is true: overall training contract numbers in the UK increased by 9% in 2016
from 5,000 to 5,450, according to the latest research. 

So forget the scare stories. While machine learning and neural
networks may sound threatening, they simply present many exciting possibilities.
Just like their medical counterparts, tomorrow’s lawyers will increasingly make
use of AI as a diagnostic tool to make their output more efficient and more
accurate. But – and it is a very important but – however fast and flexible AI
becomes, it will remain a tool, not capable of delivering creative, independent
judgment. These essential human elements will remain the preserve of a lawyer. 

Current approaches to AI are adept at the rapid analysis
of large datasets, the identification of patterns, and the presentation of
drawn inferences. What AI cannot do however is to understand when a situation
is nuanced and, importantly how to handle a subtly different situation. When
presented with a novel situation, would a client be satisfied with a lawyer that
gave a shoulder shrug and stared back in blank bemusement? That is what AI
would do in this situation or, worse still, it would not have identified the nuances,
and confidently set about presenting alarming legal advice.  

Technology has taken us on an impressive journey over the
last few decades, from the basic processing of data, through the extraction of useful
information from data, and now to the latest AI techniques that can analyse volumes
of information and demonstrate apparent knowledge. However, the distinctly
human characteristics of wisdom and empathy can never be part of a computer’s
skillset. However clever and capable our machines become, they can never become

Lawyers should be excited and inspired by what the current
generation of AI research can achieve. It will certainly save time, minimise laborious
tasks and even sometimes produce surprising results. As they become increasingly
invaluable over the next 20 years, AI systems will help lawyers to perform their
job in a multitude of ways. But AI will only ever be a useful tool: it will
remain our servant rather than becoming our master. Students today should look
upon law as an exciting career path for their future, one that will certainly embrace
AI, but not one that will ever be lost to it.  

Robert Morley is Chief Operating Officer, Excello Law,