Can we learn from the legal sector in other jurisdictions?

The UK legal market continues to be a trailblazer for its robust, profitable legal profession that other jurisdictions seek to emulate. So is there anything the profession can learn from innovations and developments in other jurisdictions?

Tony Williams, principal at Jomati Consultants, who says innovation and lawyers is a contradiction in terms, comments that while the UK is an innovative legal sector, the one that was out there first is Australia because it was quite a small and consolidated market. He comments: ‘They were probably foremost in terms of client relationships, client development, key client programmes, and the use of information technology (although I’m going back 15 years).’ He says most others have caught them up and, indeed, overtaken them—now, there are a number of courts around the world that require only online filing of documentation, ‘which is almost standard in the markets now’.

Looking to Asia-Pacific

Frank Maher, partner at Legal Risk, says that while the UK is ahead of the game in many respects, he also singles out Australia for its approach to risk management. He states:

Many of the statutory schemes are particularly proactive in assisting firms in improving their risk management. In Queensland, for example, they visit every firm to put on interactive workshops; they publish risk materials and templates for firms to use; and they have a programme of stress testing files in high risk areas.

What about the legal market in Asia? Williams says:

Places like Singapore are positioning themselves as very much the Asean legal centre. SIAC, their arbitration centre, is really pushing hard. You have an alignment between the legal profession and a government which is clearly pushing things, though whether that is exciting or innovative might be pushing the envelope.

‘But,’ adds Williams, ‘when you look at people trying lower cost centres, people trying project management or pricing plans—lots of that is happening here’.

Technology is the great facilitator and the means of much of the innovation that is taking place within the international legal sector. Whether it’s the New Zealand Courts’ recent foray into Twitter, or reports that Kenya now has one of the most sophisticated legal sectors in Africa (there is, reportedly, pressure being put on the Law Society of Kenya to open up Kenya’s legal market to foreign players)—technology is behind it.

The advent of artificial intelligence

Maher cites the use of artificial intelligence (AI) as ‘perhaps the most exciting development’ in the legal sector abroad. He says a number of firms are working on this, including Dentons with NextLaw Labs and Riverview Law. He comments:

The systems are under development, but will be able to undertake initial research which would have required input from a trainee or associate. There will be risks in this, of course, but they should be mitigated through senior fee earner involvement. Perhaps the biggest risk, though, is the question of where the next generation of partners will come from if the work of junior lawyers is gradually eroded.

But is the US already ahead of the game? Professor Richard Susskind’s prediction of an internet society with greater virtual interaction with professional services, including lawyers, is already starting to become a reality. Ross Intelligence in the US are already using AI in the legal sector through ‘Ross’, ‘an artificial intelligence lawyer’. Ross is built on IBM’s Watson technology, with its first client—BakerHostetler (a firm with more than 900 lawyers across the US)—announced in May 2016.

So how does it work in practice? According to its website, Ross ‘improves upon existing alternatives by actually understanding your questions in natural sentences like: Can a bankrupt company still conduct business?’ It then provides an instant answer with citations and suggests highly topical readings from various content sources.

Will the UK follow? The likes of Ross, the robot lawyer, have not yet been emulated in the UK. However, Dentons (through NextLaw Labs) has invested in Ross, and it’s therefore likely a case of when, not if, AI becomes a reality in the UK legal sector.

Challenges to innovation

However, there are serious legal issues to consider. Jonathan Smithers, president of the Law Society, gave a speech to the Union Internationale des Avocats (UIA) Conference in October 2015 on the use of AI in the context of the legal profession, the challenges of which he described as ‘global, fast-paced and overwhelming’.

He highlighted the legal challenges—for instance, the implications for privacy and data protection. While acknowledging the reality that lawyers are using—and should continue to use—AI to improve their work, Smithers said no algorithm exists to replace lawyers and the work they do. ‘Just because an algorithm might perform efficiently it does not mean that it will be correct. People do not want to be judged by an algorithm,’ he said.

Maher says that what we are seeing both here and abroad is a gradual shift to new ways of working: ‘Partners breaking off from large firms to set up niche practices; firms identifying opportunities to move the non-regulated parts of their service into lower cost; unregulated environments; online and other unbundled services; and the emergence of virtual law firms.’

What's holding us back?

So if there’s a perceptible shift, rather than a marked rise in new ways of working, what is holding back innovation and development? Williams believes that one of the big things that is holding back change in the legal market is that it is still very profitable. He comments:

You have an innately conservative group—the suppliers, the law firms, the buyers, the general counsel. A lot of industries have gone through major transformations because they saw their market changing in front of them. Law is blessed by the fact that most of the change, although it may be accelerating in pace, tends to be evolutionary rather than revolutionary. There is not the equivalent of the iPhone that comes along and blows everything else away.

As Richard Susskind said: “It’s hard to convince a room full of millionaires that they’ve got their business model wrong.”

Interviewed by Nicola Laver. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.