International In-house Counsel Journal Vol.2, No. 5, Autumn 2008, 687–692

International In-house Counsel Journal ISSN 1754-0607 print/ISSN 1754-0607 online

The future of the legal advisor – impact of technology

IAN MCDOUGALL Legal Director - ECLA, LexisNexis, UK

A brief history

The modern law office is an amazing place when compared to the law office of the past. If we go back only a little way, the modern law office may well seem like something out of Star Trek. For much of the past, the most complicated piece of technology most law firms had was a typewriter. Research was a process of reviewing a mountain of books, periodicals and statutes. Indeed, an important part of the legal advisor’s skill was just being able to retrieve the relevant area of law. In the distant past, law offices would employ “scribes” to carefully copy important documents, when the ability to write was a skill in itself.

Of course, the introduction of printing machinery led to the commoditisation of those writing skills. “Commoditisation” is a word I will be returning to in this piece as it continues to have an important impact on the development of the provision of legal services.

So, printing took the place of the scribe and, gradually, technological wonders such as the telex machine and photocopier were introduced, quickly followed by the word processor. When telex and word processors were introduced, the operators of telex and word processors were able to capitalise on that skill and commanded salaries for that work. But the ability to use such technology, in turn, became widespread. This technology was also gradually superseded by the introduction of multi function computers with LAN systems and, eventually, the internet.

The legal profession has been, until now, notoriously conservative in the area of change and new developments. However, once the Information Technology world focused its gaze upon the “back-office” functions of law firms, it became clear that a degree of commoditisation was possible here. In addition, many companies have in-house counsel roles; “poacher-turned-gamekeeper”. In other words, unless the law firm could drive down its costs, or provide some kind of value added service, a fair proportion of the work would be done by the “client” itself. The cost –v– added value debate is also a subject I will return to.

Current Technology in the Law Office

A law firm has, effectively, three components in delivering its services to clients; • The provision of advice. The most fundamental and value added service of all. But one

which, for reasons I will explain later, is the latest to come under pressure to change; • Back office & knowledge management systems. That is, providing the tools to support

or enable the advice to be given and systems which enable the firm to manage its business - billing is the most obvious example.

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As I mentioned above, the first impact that IT has had on law firms is the second of these components; back office systems. IT is particularly good at taking standard and repetitive tasks and giving them to a computer. An example of this impact is time recording; the introduction of simple database technology allowed this development. Such functionality, linked to a system for monitoring the status of a file (now known as “matter management systems”) provided tools for both law firm and client alike. It enables the firm to plan and monitor. It enables, with the appropriate connectivity, a client to monitor as well. Such a system can then be easily linked to an automated billing system. LexisNexis® “Counsel Link”® technology is an example of a system which does exactly that. Such information can be drawn directly from the law firm’s internal matter management and time recording systems.

It is possible to see a number of things from this. Firstly, technology allows the capability to gather and present vast amounts of information in readily accessible ways. But, just as importantly, it fundamentally changes the nature of the way that clients interact with the law firm. This technology enables the client to set billing rules, automatically reject bills which do not comply with those rules, and speedily approve those which do. The client can also monitor how the case is developing and how the costs are mounting. One can see how the billing process, from the law firm’s perspective, is “commoditised”.

However, the interesting and continuing developments which should be of interest to all legal advisors is how the provision of the legal advice itself will be changed in the law office of the future. If you had asked our law office of the distant past, or indeed even of the 1970’s, what they thought of a “computer” actually giving advice to a client, they may well have thought the idea pure science fiction. But let us examine how further commoditisation is even affecting the provision of actual advice.

Let’s take a contract. The construction of a contract is considered an area where drafting expertise is the value added service. But does it continue to be so once a

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systematised version is created? There are systems which can automatically ask questions and then deliver draft contracts with no legal advisor being involved in the conversation!

It is not difficult to see how this can be expanded by a “decision tree”, using answers given by the lay users, to construct the relevant clauses into a contract. The creation of an automatic contracts generator effectively “commoditises” the contract drafting process. Systems such as HotDocs® can do this already.

But the change in process does not stop there. We can speculate that any legal advisory process which can be reduced to a series of fixed (albeit numerous) considerations and steps in a process can be automated. To take a further example, the LexisNexis® KnowHow service in the area of employment law can do just this;

It is increasingly possible for an automated system to “hand-hold” a lay client through most systematised legal, or quasi legal, processes. By taking the legal information, integrating it with technology into a workflow process which leads the user to the answer, the basics of legal advice are pre-analysed and therefore commoditised. It would seem that all of the elements are now in place to commoditise much more of the provision of legal services, and even actual provision of first line legal advice. Knowledge management systems, back office systems, technology and integrated workflow solutions are available already to a greater or lesser extent. Therefore, the drive in the provision of legal services must be to either move the value added component higher up the service chain or compete for services on cost. This will mean that law firms will have to, as they did in the past, find new ways to add value.

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A speculation into the future of legal services

So far we have looked at the past and the present. Let us now consider the future. Sometimes we have to make great leaps of imagination (and risk ridicule) to try to plot a path into the future. Who would have predicted, even as recently as the 1970’s, that an legal entire case could be created, managed (matter management system), documents sourced and arranged (“Applied Discovery®”), lodged with the court (“File & Serve”®) completed and billed (“Counsel Link”®) without a single piece of paper being used? The technology is available to do this now. Although it is not the norm in many areas just yet, it is becoming increasingly widespread and will continue to do so. Who would have thought, say in the 1960’s, that it was anything other than science fiction that a computer would be able to ask you questions and, from those questions, generate a contract?

Indeed, who would have thought that you could talk to a computer and get it to follow instructions? Or that the computer could actually talk back! But voice recognition software is reasonably well developed and synthesised computer voices sound more human than ever.

It is worth briefly mentioning the current trend in the legal industry for “outsourcing” to places such as India. Why outsource? Because it is a low cost environment that allows lower level legal work to be done more cheaply. But, to take our first look into the future, if work is “commoditised” to India (or elsewhere), then it is not too much of a predictive leap to say that it is only a matter of time before such work moves to the next level, that is; to a computer. The point of commoditisation, through systemisation, is that repetition and reduction of a process to a fixed system frankly asks to be computerised. These are the strengths of computers. In the world of global IT communications, it doesn’t matter where that computer is located.

We may also predict the eventual abandonment of traditional legal treatise publishing as we have known it. The single authoritative work covering the whole of a specific topic may eventually become a thing of the past. Instead, commentators, PSL’s and other experts will contribute snapshots of legal theory into the workflows of legal systems and tools. Presently, these are starting to appear as blogs. However, those works will eventually be written specifically for the purpose of inclusion into a topic area of a workflow solution. A lawyer will no longer look through a great tome for research. That will already have been sorted by the system. Instead, the lawyer will simply need to know how to ask the system the right questions to get to the right research answer. Which means that the race will start for providers to provide “authoritative” and quotable systems rather than publications. Instead of saying “Harvey on Industrial Relations says…..”, one would say “the XXX employment e-system says……” for example. Therefore, the challenge for the current group of legal publishers will be converting their existing reputations for authoritative publications into reputations for authoritative legal e-solutions.

So where does this take the role of the legal advisor in future? I must, of course, briefly mention one of the leading writers in this area, Richard Susskind, and his speculations on this subject in his book “The Future of Law: Facing the challenges of Information Technology” (Oxford University Press 1996). He refers to a new type of legal service provider called a “legal information engineer”. I think that, although expressed in different ways, the trends I have identified above point to something similar. But it is not the whole story. The ability to design, manage and update such technology, of course, requires skilled technicians. As with all technological developments throughout history, the replacement of human intervention in one element of the service chain usually creates

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other, but different, human intervention skill requirements in other parts of the service chain.

One can point to the rise of the “Professional Support Lawyer”; a fairly new type of “back-office expert” who is tasked with supplying research and distilled raw data to the front line advisor. I suggest that, in the medium term, the most radical change to the way law is provided will be felt by the PSL’s. Their jobs will evolve into that of the “legal information engineer”. They will not be required to provide distilled raw data to legal advisors. Their role will be to provide distilled raw data and some commentary into computerised legal systems.

But does the development of the legal information engineer mean either a lessening of the status, or the numbers, of people who would call themselves “legal advisors”? Perhaps. However, I think, on the basis of our discussions above, we can make a number of further predictions.

i. It seems clear that if technological development, and thus commoditisation

continues, then more and more legal advice functions will be carried out by computers. (And Professor Susskind’s prediction of the legal information engineer becomes more likely.) Accordingly, the importance to the profession of the legal solutions providers becomes even more pronounced.

ii. This leads to the notion that more legal work will be done by the client themselves; that is by lay administrators who can simply follow the process laid out for them by the automated process.

iii. But, beyond this, the client will still need a person skilled in interpreting the law in the light of the facts of each individual case. In my view, we are nowhere near an artificial intelligence being able to perform that function. So the real transformation may be in the reduction of the number of people giving direct legal advice, and an increase in those creating core content and technical functionality. Such delivery systems, or workflow solutions, will still require legal content to be created to enable them to work, and those creative tasks will still require humans to a greater or lesser extent.

iv. I think we can safely say that there will be a continuation of the trend in stripping out back office and support staff.

Taking this a step further, could technology mean the eventual demise of people such as the legal secretary? If a legal advisor has a computer which can combine all of their complex workflow problems and functions, as well as respond accurately to voice commands, could we have the following conversation (which is only fiction at the moment!); Legal Advisor: ... Computer, please create an e-letter in the matter of Johnson –v- Smith

Computer: .......... Please state addressee

Legal Advisor: ... Client

Computer: .......... e-letter in Johnson –v- Smith, addressee Miss Johnson, created. Please state body text.

Legal Advisor: ... I have received a letter from the Claimant……

Computer: .......... [interrupts]….. Query, no letter on file from Claimant in last 14 days.

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And so on. Fantastical as this conversation might seem, it may not be so far away. All this example shows is the combination of all of the systems I have previously mentioned plus an advance in the sophistication of voice recognition. Yet the effects are spectacular.

However, beyond the mere continuation of the trend to remove support functions from the supply chain, technological innovation in the legal services market will also necessitate a transformation in the types of services provided, as well as the manner in which such services are provided. This brings us back to the choice faced by the legal profession as a result, namely additional value added services and diversification, or the alternative of going “down market” and simply competing on fees. At the smaller end of the market, cost competition may well be the path for many, especially in areas of easy systemisation. One thinks of the potential impact of “Tesco’s Law”. But a logical move in the “value added” direction at the higher end of the market would be that law firms will cease to be just law firms. Eventually, many will merge with other professions (accountants, management consultants, public relations, payroll administration etc.) and provide “one stop shop” solutions. The next challenge, therefore, for the providers of legal systems will be the broadening of their solutions systems to cater for the one stop shop.

However, all of these trends (transformational though they are) do not lead me to the view that we will see the demise of the classic legal advisor. As I said above, there is one thing that computers will always find impossible to commoditise without genuine artificial intelligence; in the words of former British Prime Minister Harold MacMillan, “events, dear boy, events”. Ian McDougall is a Barrister and Legal Director for LexisNexis in EMEA region. Formally, Chief European Counsel for Hughes Electronics and Group Head of Legal for PayPoint Plc. Speaker at conferences and also previously published in European Lawyer magazine. LexisNexis is the leading online legal, tax and regulatory publisher and supplier of workflow solutions for knowledge based professionals. In addition, it provides one of the largest online News & Business aggregation services and includes such offering as “anti-money laundering” and customer background checking (“Know-Your-Customer”) services.