Note: This story originally ran in Legal Week, the London-based sister publication to Legaltech News, under the headline “How Machines Could Help Build Legal Panels.”

As technology continues to gain traction in the legal market, law firms and in-house departments are investing increasing amounts of their money and trust in the intelligence of machines. And there is an emerging technological development that may have significance for legal panel selections.

In conversations with Legal Week, several legal professionals said they are beginning to see clients experiment with AI to choose legal advisers and delegate work.

And driven by their larger size, resultant larger costs and time pressures, banks could be leading the way. 

Chris Grant, Barclays' head of relationship management, says his bank is actively working on ways to deploy AI in the tendering process, and ways to use it to get clarity around price and legal service delivery.

“We need to make sure law firms are providing services that match our expectations, and we have access to data which allows us to bench performance”, he said.

“It also helps get better clarity around price and improves our ability to establish efficient fee arrangements. Using AI to analyse data would give us greater transparency as to efficiency of service delivery as well as cost and commercial arrangements.”

Though he doesn't believe AI will ever replace legal panel selections altogether, he said he thinks it will complement the process.

Paul Hastings' AI co-chair Sarah Pearce says: “I'm speaking to a couple of general counsels (GCs) who are using AI technology as a means of comparing their legal advisers which they have on their existing panels – and using it to select their new panel.”

While these companies are in the experimental stages of using AI in this way, Pearce believes these techniques could be used across the market in the future.

“AI will likely be used more and more to assess quality and costs of legal advisers.”

“I think humans will always have the final decision, certainly in these circumstances for now, but AI will likely be used more and more to assess quality and costs of legal advisers,” say Pearce.

AI tech startup Globality – which cross-compares legal advisers and provides statistics on strengths and costs – claims that its technology can facilitate law firm selections for both individual pieces and legal panels, and could even replace the need for legal panels altogether.

Globality vice-president of legal, Paula Doyle, said: “Some GCs are still wedded to the panel system, while others think it's a cumbrance and too time consuming.”​​

Doyle believes that selecting firms using AI drives better competition: “Lawyers with good relationships with clients can't just sit back and be complacent in the selection process. Some clients are beyond these relationship-based choices already, while others are moving in that direction.”​​​

Some FTSE 100 companies have already evidenced this trend. Standard Life Aberdeen, for example, has abandoned a formal legal panel altogether.

While banks may be the vanguard, large corporate legal departments are also starting to test the AI waters.

BT general counsel Chris Fowler says that, while the telecoms giant is a long way from turning to AI to select its legal advisers, it has started using data “to evaluate how good [law firms] are in terms of quality of bids, ability to handle scope changes and accuracy of billing”.

He adds, however: “We're a long way off being able to use AI, or automate any type of procurement process but that's not to say it couldn't be done in the future if there is enough data.”

Most GCs Legal Week spoke to were open to the possibility of using AI in the tender process or for legal panel reviews, although some were more skeptical and doubted that human relationships would ever be fully taken out of the equation.

One GC at a large online retail company, who asked not to be named, said: “Choosing legal advisers comes down to the relationships you have with lawyers – those who know you and your business. And I don't understand how AI could take that into account.”

Similarly, Barclays' Grant conceded that the market has yet to deliver a system with sufficient sophistication for AI to be implemented at maximum capacity across the board.

However, there remains a general openness among corporations to using AI in some form or the other during the legal panel selection process.

One GC said that they can “see AI being added in to the panel review process as part of the panel assessment”, but said it is likely to be for “basic due diligence before starting a relationship with the firm”.

Another added: “I could see us adopting something akin to this in due course, but as an informational input to a judgement-based decision – rather than as an arbiter.”