Technology startups are constantly competing to scale into customer segments that desire technologies only once they have proven seamless usability, broad industry uptake and pragmatic value. In other words, ‘you first, I insist!’
This article will identify digital technologies beginning to establish a foothold in the legal industry worth keeping an eye on in the emerging decade, from ebilling software to contract management software. While technology implementation pragmatism makes total sense, law firms should be cognizant of keeping a level of service in line with peers, at the very least, who are using some modicum of technology in their practice. Let’s dig in.
As the legal industry is a document-laden field, cloud technology offers the promise of increased efficiency through centralized, immediate, and searchable access to information. In the next few years, there will be an uptick in SaaS solutions to improve access to legal resources and internal documents. As firms continue to trim budgetary expenses, SaaS with subscription based pricing models will become increasingly attractive. Finally, as legal professionals become more and more used to cloud-based technologies targeted at consumers, there will be a reduced barrier to entry for the use of cloud-based technologies in firms. Digital Cryptography
The increased information accessibility afforded by cloud-based technologies is not necessarily limited to legal professionals - the conversion of physical to digital information increases the risk of security breaches that can make sensitive information accessible to harmful actors. Investments in digital information technology will correspond with an increased uptake in cryptography. Sensitive information distributed across documents in the legal industry will have to be secured before moving to the cloud. As digital cryptography has proven itself as secure for users in other industries, most notably in financial services and banking, legal professionals will be able to trust in digital cryptography products to protect sensitive information. As 80 percent of the largest firms in the U.S. have experienced a digital security breach and 60 percent of all emails directed at legal firms are phishing scams, there is a real threat incentivizing investments in digital security. While law tends to be a technology laggard, look to healthcare for an industry similarly conservative in its approach to technology implementation. A leading healthcare insurance provider, Anthem, announced it plans to utilize blockchain to guard patient data, which is arguably as sensitive as legal data.
Predictive analytics will continue to augment human labor in the legal industry. While artificial intelligence (AI) can be used to refer to a wide variety of technologies with varying capabilities, from narrow intelligence found in voice-activated assistants to super intelligence that remains on the horizon, the type of AI most likely to be taken up in the legal industry will be somewhere in the middle - able to augment legal professionals’ activities in a way that unlocks value that would otherwise not be available.
Two highly relevant applications of this sort of middle-ground AI are in performance management, billing coding and electronic discovery. Utilizing AI to track key performance indicators of firm employees is a practice that has been taken up by approximately half of the top global law firms, as the data collection provides more granularity and insight into how to best support the growth and success of employees across functions. AI in billing coding is another area of middle-ground applied AI intelligence, which might also be deemed machine learning. An example of this is in legal billing software with invoice databases that are able to predict the appropriate billing code of legal invoice and medical invoice line items, reducing errors. An example of this type of AI can be found within Bilr, for example. Finally, the use of electronic discovery (e-discovery) in litigation, government investigations, and information requests has yielded extremely large volumes of digital data that still require the fine-combed approach used in the review of paper-based discovery processes. AI that augments legal professionals will help reduce the time needed to identify key points of information scattered across the e-discovery stack.
The rise of blockchain technologies has driven the emergence of smart contracts. There are two primary categories of smart contracts - those that are a transference of a negotiated verbal agreement into code, and those that are an automation of executed actions specified under the conditions of a text-based contract. While these contracts are labelled as “smart,” there is currently little viability for smart contracts to intelligently interpret whether ambiguous conditions warrant the fulfillment or violation of agreed-upon terms. As a result, the current state of smart contracts is limited to relatively clear, objective contracts. One example of a near-future application of smart contracts is in executing the usability of a leased car, based on whether the lessee has or has not paid an agreed-upon amount to the lessor. The simple verifiability of a financial transaction is within the scope of current smart contracts’ usability. However, contracts that require a trusted third-party to mediate or resolve disputes are not yet feasible for smart contracts to encode or automatically execute.
This short-term observation of a limited domain of applicability should not be taken as a dismissal of the viability of smart contracts. As with all the above technologies, legal professionals will have to continue to track the impact of these technologies on their industry as infrastructure to support technological capabilities are constructed in the long-term. If you would like to discuss any technologies mentioned in this article, and how they can apply to your firm, reach out to the author, Matthew Markham, at [email protected].