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Law firms are increasingly using AI to ease the drudgery of due diligence and other processes. What could this mean for the legal profession?

Startups and big firms, particularly in New York and London, are using machine learning to dig up evidence, recognise clauses, identify anomalies, compare decisions and other data-heavy tasks. As James Ovenden of Innovation Enterprise explains, “Machine learning algorithms are capable of building computer models that make sense of complex phenomena by detecting patterns and inferring rules from data.” Algorithms can analyse more documents in much less time than humans. They can also be more reliable, notes Noah Waisberg. A former corporate lawyer, Waisberg founded Kira Systems, the maker of Kira, a software tool for contract analysis.

The arguments for using artificial intelligence to comb through mountains of documents in search of relevant data are compelling: Less time-consuming tedium could speed up preparation and free up time for more interesting work, such as developing litigation strategies. This could in turn help improve legal talent retention, a growing problem in the profession.

AI could also lower fees for clients. Due diligence typically accounts for as much as half of the fees charged for advising on deals, according to The Economist. At this early stage, it is hard to predict cost savings from using machine learning software, says Isabel Parker, Chief Legal Innovation Officer at Freshfields Bruckhaus Deringer, which uses Kira. Every case is different, but the time spent on document review can fall by as much as 80%.

Software firms are also developing machine learning algorithms for more sophisticated legal processes related to trial preparation. Lex Machina, a Silicon Valley startup now owned by legal information provider Lexis Nexis, uses earlier court documents to make predictions about a case, such as its time to trial, likelihood of success, and the potential damages it could win.

In the broader scenario, some tech firms are aiming for disintermediation in the legal profession, at least for certain tasks. LISA, a British AI tool, helps people draw up non-disclosure agreements. In addition to saving money, this eliminates the need to disclose confidential information to human lawyers. Others are focusing on drawing up relatively simple legal documents, such as rental leases and parking ticket appeals, to help people avoid legal expenses.

As in so many other industries, the inevitable question is whether artificial intelligence will hurt legal employment. This is a subject for debate. Some firms do anticipate hiring less legal talent, while others contend that if the technology allows them to cut fees, clients will consult their lawyers more frequently. On both sides there is agreement that, while many legal tasks readily lend themselves to automation, many others will likely always require human judgement.

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