Four years ago, Richard Susskind published the first edition of “Tomorrow's Lawyers: An Introduction to Your Future.” With the rapid changes in the legal profession, tomorrow is now today.

The second edition of “Tomorrow's Lawyers” focuses more sharply on how artificial intelligence, alternative business structures, low-cost law firm service centers, legal tech startups and evolving in-house roles are changing the way legal services are delivered and how law schools are educating students to meet those changes.

To that end, ALM during October is publishing excerpts across several of our brands from the second edition to spark thought and conversation about the industry's future among the legal profession's leaders. ALM editors and reporters have solicited reactions—positive and negative—to Susskind's ideas from law firm chairs, top legal educators, general counsel, law students and industry analysts to get their take.

Workflow and Project Management

For high-​volume, repetitive legal work, workflow systems are like automated checklists that drive a standard process from start to finish. Project management systems, on the other hand, are better suited to legal tasks and activities that are more complex, less structured, and yet still amenable to more disciplined handling than the ad hocery that is found in many law firms and in-​house departments. For law firms that charge by the hour and so have historically benefited from ineffective case management and inept transaction management, workflow and project management systems represent new efficiencies and, in turn, the prospect of reduced fees.

—Richard Susskind, “Tomorrow's Lawyers, Second Edition”

Document Analysis

Lawyers spend much of their time ploughing through documents, not least in preparation for litigation. For some years now, in terms of precision and recall, properly primed systems have been able to outperform paralegals and junior lawyers when reviewing large bodies of documents and isolating those of relevance.

More recently, a new set of techniques have been adopted within law, drawing from disciplines known variously as machine learning, Big Data, and analytics. Although some of the most dramatic dimensions of machine learning have not yet been deployed in legal practice (such as computers that can write programs, deep neural networks, and reinforcement learning algorithms), it is clear that these emerging systems are proving increasingly impressive, whether analysing documents sets or summarizing or extracting key provisions from contracts.

These search and machine learning capabilities are disruptive, not simply for law firms that have profited from employing human beings to wade through roomfuls of paperwork (whether on transactions, dispute-​related projects, or contract reviews), but also for legal process outsourcers who currently offer similar services. No matter how low human labour costs might be, a system of this kind, once set up, will always be less costly. That is no doubt why young law companies who are pioneering in the field, like Kira and RAVN, are generating great interest across the legal profession.

—Richard Susskind, “Tomorrow's Lawyers, Second Edition”

Analysis

In the eyes of legal scholar and futurist Richard Susskind, the legal industry is in the midst of an unprecedented transformation. While this change is due to a confluence of factors, he believes it is undeniably spurred along by workflow and project management tools, as well as artificial intelligence (AI) document analysis platforms.

But are these technologies impacting legal in the way Susskind believed they would? For some, Susskind's predictions miss the mark. But for others, more time is needed for these predictions to come to fruition. What is certain, however, is these technologies are playing an increasingly important role in the delivery of legal services, and perhaps, the future of the legal market.

Here's a look at some of Susskind's predictions and what experts in law and technology think of them.

Workflow and project management tools may mean greater efficiency, but less revenue, for law firms.

For Susskind, workflow and project management tools are among most impactful technologies in legal today. “For law firms that charge by the hour, and so have historically benefited from ineffective case management and inept transaction management, workflow and project management systems represent new efficiencies, and in turn, the prospect of reduced fees,” he wrote.

‎Kermit Wallace, chief information officer at Stroock & Stroock & Lavan, agreed, noting that firms become more open to alternative fee arrangements, which are likely less profitable than billable hour arrangements, once they realize they can lower overhead costs by using project and workflow tools.

“The billable hour in some ways was going away before AI and machine learning came on the scene, and that's because in some ways you had things like legal project management, where firms had a better handle on what their investment was in servicing a matter on behalf of the client,” he said.

But while some firms are using technology to provide more efficient, cost-effective services, others are still far from deploying it and are likely struggling with the prospect of less client revenue.

Exterro's 2017 Law Firm Benchmarking Report, which chronicles the results of a survey of 126 U.S. law firms across more than 30 states, found that under half of responding firms used legal project management technology, while the majority still used manual tools like email and spreadsheets.

Katie DeBord, chief innovation officer at Bryan Cave, said to survive a more competitive market, law firms “need to start embracing project management.” Law firms that succeed in the evolving legal services market are those that recognize and embrace “that they need to be operational partners with their clients, that they need to intertwine their legal advice with efficient legal service delivery.”

But this takes more effort than just deploying and installing technology. Skip Walter, chief product officer at FTI Consulting, said that while there are many legal project management tools on the market, “what doesn't exist much in legal is the project management expertise—that is still a relatively rare commodity.”

AI document analysis tools are disruptive to law firms and legal services providers.

In Susskind's view, modern “search and machine learning” tools, essentially AI document analysis platforms, are disruptive to legal because they automate tasks like contract review and legal research that were once manually done exclusively by legal service providers and law firms.

With AI technology, however, corporate legal departments can bring in and handle more, if not all, of this work on their own. For many, this trend toward “insourcing” is a definitive reality. Michael Quartararo, director of litigation support services at Stroock, said, “I do see a huge increase of late in the amount of work that is going back in-house to corporate legal departments.”

But while many agree there is an increase in insourcing, they differ on the exact reasons why.

While Susskind connects insourcing to the growing use of AI technology, Chris Emerson, chief practice economics officer at Bryan Cave, believes the current trend is primarily spurred by economics. He explained that “cost concerns” are driving more work in-house, and corporations want “predictability and transparency over legal department cost.”

The decreasing demand for law firms and outsourced legal services, he explained, began in the 2008 recession, when the cost of hiring in-house attorneys dropped significantly, allowing legal departments to build out their staff.

“With the recession, you had a lot of displaced attorneys, either from law firms or law schools that were still pumping them out in mass, and you just had this glut in the market. So you could easily either hire people or bring them in on a contract basis,” Emerson said.

Still, there are many who tie the decrease in billable hour pricing agreements to AI technologies being leveraged for work such as contract review. But in the current market, Emerson sees this more of a symptom of a larger cause than the cause itself.

“In my opinion, machine learning and AI have almost nothing to do with the trend away from the billable hour model, at least for right now,” he said. “What has happened and what has continued to happen is that companies coming out of the recession figured out they can hold the legal departments accountable to their budget, and so companies' financial performance is now a big factor in whether or not a legal department is moving to alternatives to the billable hour.”

The jury, however, is still out about how much of a role AI technology will play in defining this disruption in the future. Kevin Gidney, founder and chief technical officer at Seal Software, noted that AI deployment is still relatively low in legal, and its full effects are yet to be felt. “I truly believe that the external law firms won't die away completely, but the amount of work they get is going to be drastically reduced.”

He added that while AI document analysis platforms are currently being adopted by legal departments in large, well-established companies, once the technology becomes more cost-effective and more advanced, it will become more pervasive among most corporate legal teams. And that, perhaps, is when its effects will be most known.

Deploying AI tools will always be less costly than human labor.

One of reasons Susskind believes AI will be so disruptive in the market is that deploying AI solutions will always be less expensive than using human attorneys.

Gidney agreed, explaining that the savings from using AI come not just time and labor costs, but also by “having a process that can be repeated in the future.”

And while AI allows legal departments to do “most of the work internally,” more importantly, it “allows them to keep the knowledge of doing it internally,” he said. It is more costly, for example, to hire new attorneys for contract review and train them than it is to use an AI system that holds this knowledge internally.

Still, the cost of installing and deploying AI initially is no small matter, and in many cases, those looking to bring AI systems in-house may have to wait to see a return on investment. Gidney noted that “it may be cheaper” to outsource document review to outside counsel if one has a relatively small number of documents to review, such as 10,000 contracts.

But for companies with hundreds of thousands or millions of document to review, he added, an AI installment will likely pay for itself in little time. Gidney noted that Seal had one client who recouped the costs of buying and installing an AI contract review system “in less than 60 days.”

Yet there is also the question of how effective AI can be for some legal departments. While many agree with Susskind's assertion that AI's ability to find and analyze relevant documents within a dataset will always “outperform” the ability of human reviewers to do the same, AI systems still need to be trained to reach that higher level of accuracy.

“What that means is that whoever has the largest or broadest training set is going to have the most accurate technology,” Emerson said. The problem, however, is that “medium to large size companies don't have the volumes of data to really train these systems really well.”

In that case, some deployments of AI for document review may not be as useful as human reviewers. In other cases, outside counsel and other companies may have better trained AI systems than the corporations hiring them, which may give them an edge.

Excerpted with permission from Tomorrow's Lawyers by Richard Susskind. For more information, click here.