A new breed of intelligent search engines are set to make lawyers lives easier, and open up new veins of work. But what do people mean when they talk about “AI in the law”? And should lawyers worry that robots will take their jobs?

The 20-second summary

AI is scary for some. Thoughts of robots taking our jobs causes sensational and emotive headlines. But in reality, it is we that control the machines. And we have an incredible opportunity – perhaps even obligation – to use them to help businesses reduce the cost of legal risk, and improve access to justice.

The costs in question are significant. Morgan Stanley analysts put US and European banks’ litigation costs at $230 billion since 2009. And recent increases in fees for issuing a civil claim worth more than £10,000 in the UK have raised concerns around the possible loss of legal business to competitors abroad, and the risk that higher fees would limit justice to those without financial means.

Legal risk management and online arbitration are two areas where AI can play a part in reducing legal costs. This article focusses on the application of AI to manage contractual risk – around fifty percent of legal work involves scraping information from contracts. You will learn what contract robots are, how they can be used to reduce the cost of legal risk to business, and why lawyers should have nothing to fear from them.

And the article also looks slightly further into the future, to talk briefly about how robots could possibly improve access to justice, in partnership with online courts in the UK and overseas.

Contract robots don’t have a physical form

Contract robots are packages of computer code without a physical form. You’re not going to walk into a room and see one physically leafing through a pile of documents! They work in the digital world, effortlessly scanning and extracting data from digitised documents.

They are a new breed of intelligent search engine that, after finding the contracts you need to review, will report on the bits you actually need to read. And then learn from your feedback how to do the job better, next time. The potential for this kind of technology in the law is limited only by your imagination.

Each robot is dedicated to performing a specific task. Finding and reporting key data from outsourcing contracts, for example. Or reviewing the enforceability of international loan facility agreements. And they differ from traditional computer packages in one very important way. They learn from each review and reapply their learning to new circumstances, without being “re-coded” by hand.

And contract robots have no ambition to progress to another role. They simply get better and better at performing their own specific task. They will become the ultra-reliable, ever-present member of every law firm, in-house legal team and Legal Process Outsourcer (LPO). And will have a seminal effect on the way legal services are delivered in the future.

Lawyers add value when they interpret facts and data

Many commentators say lawyers should worry that robots are going to take their jobs. But lawyers add value through their ability to analyse and interpret facts and data. Their ability to analyse, deconstruct and recombine data and information into new knowledge (about a legal matter) elevates them above the kind of work that the Contract Robots can deliver.

And in the “lower value” work – such as that done by LPOs, or teams of paralegals working in captive legal centres – contract robots will increase the capacity and capability of teams to meet increasing demand.

AI will help to significantly reduce the cost of legal risk to business

The volume of legal work is not finite. Increase in volume and complexity of law and regulation, increasingly complex contracts, global IP infringements and challenges, and new focus on ethical conduct. They all add-up to huge legal risk exposures, and a seemingly endless need for lawyers and legal advice.

And while contract robots will make it possible to review more contracts, parallel applications of AI in the law could equally help. Two example that spring to mind are checking for online trademark infringements, and analysing the likelihood of success in litigation disputes.

New opportunities will open up for lawyers and paralegals to assess how to use robots to manage down the cost of legal risk to business. And to then train specific robots to improve the operating processes that are commonly the cause of attritional and significant legal risk. And recent moves from financial services regulators to include potential legal risk losses (including ethical conduct) in regulatory capital calculations, mean that the need for these applications is set to rocket.

Arbitration robots could improve access to justice

And looking slightly further into the future, it is possible to imagine AI working hand-in-hand with new online courts in the UK, to improve access to justice.

It is unlikely that robots will replace judges in a court of law. But artificial intelligence almost certainly has a place to support those judges.

AI can quite feasibly extract facts from documents, and present them to arbitrators/judges or ombudsmen. And if “Arbitration Robots” could do this over any form of documents, in any language – it might even be possible to open up UK legal expertise to judge cases online from other jurisdictions.