Law firms are systematically pitched by a host of eager technology companies, proclaiming the benefits of what artificial intelligence systems (AI) can do for them. The argument is simple: AI allows computers to mimic cognitive functions of the human brain, notably learning and problem solving, which can (or one day, will) enable law firms to save time and money while offering clients a quicker service.

Indeed, some systems already do just that. But the reality is more complex, and less certain. "AI means different things to different people: it is a suite of emerging technologies," says Ian McFiggans, deputy global chief information officer (CIO) at Hogan Lovells.

Richard Susskind. jpg-Article-201611091044Sit down for an hour with Richard Susskind and, between the coffee cups, his crystal ball soon appears on the table. "Law is about information, documents, communication, and we're living in a revolution," he says. Deep inside Susskind's crystal ball, he sees a future of 'increasingly capable machines' with ever more powerful systems. "There is a tendency for lawyers to say: I can see how the accountants will use them and how they might work in audits; but we're different."

He anticipates that, within a decade, "The tasks involved under the heading of lawyer will change, so a lawyer in 2025 might be a legal process analyst, a legal project manager, a legal knowledge engineer. I don't think there will be a reduction in the number of lawyers, at least not in the medium term, but there will be a great change in what they do."

However, a recent Deloitte study suggests that technology, including AI, is already affecting the UK legal sector; by 2035, the study predicts, 114,000 legal jobs will become automated.

So what are firms doing with AI and how beneficial will it be?

"There's a lot of noise around AI – I've lost count of the number of futurologists I've had to listen to telling me that I will be having a microchip inserted in my head at some point," says Travers Smith IT director Ann Cant. Her firm has been trialling an AI due diligence tool and is exploring other areas. "We use another AI tool which alerts users if it believes an email has been incorrectly addressed," adds Cant. "As AI develops, we will welcome the technology as a way of dealing with monotonous tasks, thus freeing up time for people to do more interesting and rewarding work."

In their public statements, most law firms are proceeding with caution, waiting to see how technologies evolve, although privately several big players are committing significant resource to AI development. "We're taking a realistic approach," says DAC Beachcroft IT director David Aird. "Some firms say that AI is a little overhyped. When it comes, it will probably be more far-reaching than they think, but it will also probably take quite a while to get to that point. I don't know if it's the Scotsman in me, but I'm a bit sceptical. We're looking at AI, but we're not betting the farm on it."

Inevitably, detailed discussion about the testing or development of potentially groundbreaking systems can be commercially sensitive: retaining a competitive edge and first-mover advantage on AI might yet prove to be critical.

Linklaters director of information systems strategy Matt Peers says: "The way we are bringing the phrase 'big data' into life is by making sure we are able to take advantage of all the data we hold as a firm. The AI heading is quite broad but what is clear is that it is going to play an increasingly important role in how we and our clients work." His plan is to "make sure that we have technology that meets the needs of the people in Linklaters and our clients, and we will look to invest in technology and change our processes accordingly".

Linklaters uses the Verifi program, an AI application that searches through multiple registers to check names thousands of times faster than by human searching. Peers adds: "It seems likely that AI software that allows the ingestion of contracts followed by providing the ability to cluster and search these contracts, will be the first area to go mainstream. The market is crowded and evolving fast, so we do not intend to be wedded to any one solution."

It's not a question of if it becomes ready for primetime, it's just a question of when

Allen & Overy (A&O), which has invested heavily in innovative technology, is equally circumspect, as Andrew Brammer, the firm's IT and shared services director, confirms: "We work with our clients to solve their problems in efficient and innovative ways – building solutions to solve our clients' problems, including leveraging AI which is a core component of our IT strategy. In addition, we undertake joint R&D projects in AI." Partnered with Deloitte, A&O has created a regulatory service for its banking clients, MarginMatrix, which reduces the time taken to automate documents from three hours to three minutes.

Latham & Watkins CIO Ken Heaps says: "AI is one of the key engines in our suite of emerging technologies. We are among the earliest alpha and beta testers of a range of AI tools and we are excited to expand our pilot programmes. AI technologies are making strong progress and we believe we have a competitive advantage because our size, global platform and the cutting-edge work we are doing all play an important role in how our lawyers interact with and train the AI tools."

Clifford Chance (CC) CIO Paul Greenwood sees AI coming in three waves. "We are looking out to sea at what's approaching: most of it has not really landed yet," he says. "The first wave is here: litigation discovery tools. In huge cases, often with many millions of items to review, tools have evolved – particularly focused on litigation and large scale e-discovery – that attempt to form a view automatically about a document. These first AI applications tell you, in a reasonably accurate way, what is the subject of a document."

Bird & Bird was an early adopter of this technology. "We have been using machine-learning solutions for some years. For example, our e-disclosure process already uses technology to analyse and categorise data," says Karen Jacks, the firm's IT director. "We're currently exploring a number of other potential uses for AI across the business with some quite exciting developments – this is a rapidly evolving market and gives us many opportunities."

The second wave, which is just starting to appear, suggests Greenwood, "are tools that can get down to a level below". He explains: "They drill down into a document to identify and understand what the different parts are. So in a legal contract, it can figure out the guarantee clause, the warranty, which were the parties, the key numbers, the key events involved. It can point the lawyer towards those sections, or it can extract and put them into a spreadsheet or a report."

Examples of commonly deployed AI systems include those developed by Canadian software provider Kira Systems – used by CC, Freshfields Bruckhaus Deringer and DLA Piper; Anglo-Dutch provider RAVN – used by Linklaters and Travers Smith; and Cambridge-based Luminance – used by Slaughter and May. "These companies are drilling down to a level we've not been able to before," says Greenwood.

Systems that can understand and be questioned in natural language comprise Greenwood's third wave. "We're five years away from seeing concrete results," he says. "The one everyone got really excited was IBM's Watson, but it's still quite a long way from delivering much for the legal sector." He also points to Ross Intelligence, which uses Watson, as an early prototype of what might come. "But no one has really got into the cognitive capabilities of Watson yet."

Andrew ArrudaAndrew Arruda, CEO of Ross Intelligence (pictured), says: "When people think about AI, they sometimes get concerned that it's a replacing agent; really it's an enhancing agent. AI will make humans more human. I like to think that Ross will certainly become a ubiquitous piece of technology for law firms in the future. The real competitive advantage is getting on board now: firms that equip themselves, not just with Ross, but also with similar tools – that have a forward-thinking attitude – are going to make it out of this transitional time in the legal market. Firms that adopt AI put themselves at a significant advantage."

At Hogan Lovells, one of several firms testing Watson applications, McFiggans says: "The one thing that everybody in the firm I talk to about Watsonian-type technologies and AI generally agree upon: it's not a question of if it becomes ready for primetime, it's just a question of when. We are experimenting with Watson-like components." In terms of client demand, he adds: "There's continued interest from clients in due diligence in our corporate and financial transactions spaces on the application of AI for electronic discovery." But in terms of big data, he says: "We're probably at the early stages in applying AI to gain understanding."

I've lost count of the number of futurologists I've had to listen to telling me that I will be having a microchip inserted in my head

Fieldfisher's Michael Chissick, among the most technologically astute of managing partners, counters: "Clients aren't telling us to invest in new AI products – from my experience that isn't how they interact with us." He is sceptical of the short-term gain: "There's a lot of overexcitement, but how many people are really doing it? I'm not convinced that there are lots of revolutionary applications other than in some of the document checking, disclosure discovery and word searches, which are coming along at a great pace."

michael-chissick-web_SMALLChissick (pictured) suggests that there are two approaches that law firms can take: "They can either procure something bespoke and say: look, we've invested, we've got something that no one else has. Or – as I suspect more likely – legal IT providers will develop something which we will all take licences from. It's two or three years away, but then it will probably happen quite quickly. My guess is that, because the costs are huge, it will come from a big provider providing software to many law firms, rather than one law firm developing it themselves."

Reed Smith chief knowledge officer Lucy Dillon concludes: "AI is definitely part of our planning. The ability to manage, categorise and analyse vast quantities of data is a key component of the legal service toolset. Current technology allows us to do these low level tasks quickly and efficiently, allowing our lawyers to focus on more complex issues. Technology is moving very quickly and we will see enhancements and more sophistication in what systems can do over the coming years.

"The analysis aspect will become more accurate and more powerful – firms that can embrace and leverage the power of these analytics and incorporate them into the client offering will be the winners."

And tech-savvy clients may well decide exactly who those AI winners will be.