Here come the robo-lawyers

We've reached the point where emerging products and systems can perform some of the legal analysis and knowledge application functions once performed exclusively by lawyers.

By Jordan Furlong
October 2011

When the conversation turns to technology in law firms, managing partners often think first of internal systems like Windows 7, Microsoft Office, ProLaw and Amicus, or possibly issues related to servers, smartphones and data security. Most of the time, technology decisions in firms come down to balancing the enormous price of software upgrades or new acquisitions against the cost of continuing to use potentially obsolete or insecure technology.

Very rarely does anyone in law firms think about technology that can perform legal tasks or remove the necessity for lawyers’ involvement in otherwise billable work. Even in those cases, people tend to recall archaic do-it-yourself will kits or think of downloadable document services offered to the consumer legal market by companies like LegalZoom, and dismiss the subject. In short, technology seldom has a place in strategic law firm conversations.

That’s all about to change. Lawyers who have long maintained that “a computer will never be able to do what a lawyer does” are on the verge of being proven wrong. Advances in technology for the legal market are resulting in a new generation of products that, improbably, have learned to replicate some of the legal analysis and knowledge application functions upon which countless successful law practices are built.

Yesterday’s advanced technology made it easier for lawyers to do what they’ve always done. Today’s emerging technology is taking over from lawyers many of the things they used to do themselves, including analysis of and recommendations for regulatory compliance requirements and the construction of sophisticated, airtight and enforceable contracts. Here are three American examples of what we mean.

Neota Logic

Neota Logic is among the first of what looks to be the future of automated systems in the law: an “expert application.” Neota is essentially an applied knowledge management system: it automates lawyers’ knowledge and expertise to create step-by-step processes for solving low- and medium-grade regulatory, compliance and advisory problems. Michael Mills, Neota’s founder, sometimes refers to it as “Microsoft Excel for compliance.” You could also call it a game-changer.

Neota users log in to the system and enter the relevant data on the specific regulatory or compliance issue facing them; the system prompts them to answer a sequence of questions based on the data it’s receiving. Based on those responses and drawing from a deep collection of expert knowledge acquired from both lawyers and databases, Neota chooses the correct paths through the thicket of possible choices and arrives at the same result that an expert lawyer would have reached.

Neota displays three characteristics that all sophisticated new systems possess. First, it’s a time- and cost-saving system that reduces the need for lawyers’ direct involvement in the legal process. Second, it’s a quality-control system, using a legal database that’s informed by, and collectively better informed than, all the highly knowledgeable and experienced lawyers whose expertise and previous work product underpin it.

Third, and perhaps most significantly for law firms’ professional development needs, Neota has emerged as an associate training tool. The lawyers who’ve used it in law firms refer to it as the “partner at your shoulder” system, or more colourfully, the “Guardian Angel.” It performs roughly the same function as a partner sitting in a chair next to the associate, asking him all the right questions, checking on his responses, and guiding him towards the right conclusion. It’s an expert system that also trains the lawyers who use it.

Koncision Contract Automation

Equally intriguing is Koncision, which has produced a confidentiality-agreement template for the U.S. market, the first in what it expects will be a library of document-assembly templates for business contracts. With input from an editorial board of subject experts, Koncision developed content that follows guidelines in A Manual of Style for Contract Drafting, a widely respected reference work by Koncision’s founder Ken Adams, and loaded that content onto the “cloud” version of ContractExpress, the leading document-assembly software.

To create a confidentiality agreement, users complete a dynamic and logic-driven questionnaire, specifying the issues they want to address and providing facts as requested; the answers provided by the user determine each subsequent question. For users unsure of the best response, each question is accompanied by clear but sophisticated guidance that links to more detailed information on Koncision’s website. Once the questionnaire is completed, the system instantly compiles and adjusts the preloaded contract language to create a Word document containing the contract.

A major benefit of Koncision’s approach is that each transaction starts fresh, whereas using precedent contracts limits the user to whatever happens to be reflected in those precedents. However, if the user has to draft a confidentiality agreement that resembles one she previously created using Koncision, she can simply relaunch the earlier questionnaire and make the necessary adjustments.

Interestingly, Koncision recognizes when the user answers a question in a way that would result in a provision rendering the contract unenforceable under the governing law specified. For example, if the user has opted for California law and tries to include a waiver of jury trial (disallowed in that state), Koncision will alert her with a prominent notice in red at the top of the questionnaire. As with these other products, Koncision provides firms with the ability to train associates in the issues raised in different transactions and how best to address them.

kiiac

In a similar vein is kiiac (the name stands for “Knowledge Information Innovation And Consulting” and is pronounced “kayak”), which automates the entire contract life cycle in order to significantly reduce template creation and maintenance costs.

The kiiac system can (a) analyze any set of agreements from public sources such as EDGAR or SEDAR, law firms and corporate legal departments, (b) deconstruct those contracts into their component clauses, and (c) analyze each extract for common occurrences of words and phrases. This includes both standard and “non-standard” (i.e., unique to that contract because it was negotiated for that particular situation) language, which the system highlights by rendering each in a different colour and font.

In a sense, kiiac “crowdsources” a best-practices edition of a contract from the many versions in its database, producing a version with the least clutter, the most direct language and the fewest extraneous additions. The result is the creation of a contract that contains the best versions of standard and deal-specific terms, identifying the core pre-negotiated language (and the full range of alternative terms), built from hundreds of precedents, all created in a matter of seconds rather than hours.

In addition, users can paste into the system their own version of a contract and see where it agrees with and departs from both standard and best versions. In this way, firms receive the unusual dual benefit of getting higher-quality work completed in a fraction of the normal time. Do law firms balk at the prospect of fewer billable hours from using this system? According to founder Kingsley Martin, the answer is no: firms that come to his company have already recognized that the market has changed and that clients simply will no longer pay for traditional document assembly and review by their outside law firms.

New realities

That fact underlines some new realities of the legal marketplace that are driving the development of these systems. Clients, some more vociferously than others, have signaled their inability or unwillingness to accept lawyers’ traditional way of doing and selling their work. They want options for getting high-quality work better, faster and cheaper; but with extremely rare exceptions, law firms have not responded to the challenge. So the private sector is stepping in.

Law firms should be seriously concerned by the fact that these products and others like them are proving very attractive to corporate counsel. Clients, recognizing that law firms continue to price low- to middle-level legal work well beyond its actual value, have been seeking alternatives, ranging from sending the work to legal process outsourcing companies in India to simply taking the work in-house themselves. Now these high-tech complements (or is some cases, replacements) for lawyers are emerging, and as a result, all bets are off.

We’re still in the early days of these technologies, but their rate of evolution is impressive and there is no shortage of parties motivated to accelerate that development. Firms might dismiss these concerns by saying this is low-revenue work anyway — but if every hour billed for regulatory and compliance analysis or contract drafting was removed from a law firm’s annual inventory, the impact on its bottom line would not be negligible.

The potential implications of these technology developments — for law firm workflow, pricing strategies, professional development and new lawyer recruitment needs — are profound. Law firm leaders will have to find room on their crowded strategic agendas to address a new breed of technology threats and opportunities.

Jordan Furlong addresses law firms and legal organizations throughout North America on how to survive and profit from the extraordinary changes underway in the legal services marketplace. He is a partner with Edge International, a senior consultant with Stem Legal, and a blogger at Law21: Dispatches from a Legal Profession on the Brink (http://law21.ca), honoured three straight years by the ABA Journal as one of North America’s 100 best law blogs.

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