Legal artificial intelligence (AI) was a major theme at this year’s International Legal Technology Association Conference (ILTACon 2017). At ILTACon, law firm IT and a small group of in-house lawyers, network, learn from each other, and attend educational sessions. It is an amazing opportunity to catch up on legal technology.
This year my radar was searching for an update on what is really happening with legal AI in law firms. Are law firms getting beyond the hype and using AI? What specific use cases are catching on? How does AI impact lawyers and staff? Here’s what I found out.
The Nitty Gritty On AI For Matter Budgeting And AFAs
Law firms have learned that AI tools are very good at finding key issues in billing narratives to support AFAs and budgeting, for one. This law firm use case was highlighted again and again in ITLA sessions.
Not surprising, since the Great Recession ushered in client demand for accurate forecasting and budgets from their law firms. General counsels also expect alternative fee arrangements (AFAs) from outside counsel, featuring flat fees, different prices for litigation phases, and even outcome-based fees. But what do firms base these new “must haves” on? Some lucky person must crawl through data from previous, similar matters to develop estimates based on prior experience.
Holy cow—the mental stress induced from reading old law firm time entries and the time sink alone should drive any sane firm to prioritize this AI use case. Much better to have a machine do this one.
Lovells’ Global Head of Legal Service Delivery, Stephen Allen, said clients’ need for better budgeting, along with the 89 billing codes in their finance system, propelled Lovells to find an AI tool for this process. Using natural language, their legal AI tool now supports budgeting with 30 second searches of their billing database.
Initial findings of a study by consultant, Neil Cameron, show a threefold improvement in law firm forecasting using AI. This should get law firm clients’ attention.
Rifling Through M&A Data
Neil Cameron develops AI algorithms using multiple factors from similar past M&A matters and the new matter. The AI tool helps estimates costs based on the number of documents to be reviewed during diligence. Neil recommends engaging clients in this exercise. Then, when another 100K of documents is found, the client can’t exactly complain.
AI can also be used to efficiently review M&A due diligence data.
Legal AI For On-Demand Forms
Chief Innovation Officer at Bryan Cave, Katie DeBord, summarized three AI use cases in practice today at the firm. One AI application generates standard, pre-approved term sheets based on a series of user questions. This solved the problem of rogue term sheets with countless variations. Client business lines also now save time with self-serve standard, compliant non-disclosure agreements (NDAs). This drastically reduces in-house and law firm time spent on NDAs. Another AI tool uses a questionnaire tool to automate compliant franchise disclosure reporting.
Sound more efficient than what you do today?
eDiscovery In Big Data Age
The planet’s digital data will grow 50-fold from 2010-2020. That’s now. The Lovells speaker simply stated that, “non-AI assisted review makes no sense with today’s giant data sets.” “Eyes on” lawyer review in financial services matters, for example, where data volumes are massive, is no longer practical or efficient. AI helps firms churn through massive amounts of data during regulatory audits or investigations.
The thing about AI is that it learns. AI tools get smarter the more they search case data, bringing you more and more precise case data to build your story. AI case data analytics help lawyers see data in new ways, with visualizations of custodian communication patterns and conceptual relationships created from a sea of bewildering data. AI data metrics can also drive more efficient review management by focusing lawyers on key custodians or data types likely to reveal highly relevant facts.
AI Legal Research
Long suffering law firm associates have welcomed in AI based legal research tools. As a former corporate associate and paralegal before law school, I say hallelujah to these new AI tools. What lawyer doesn’t want to do fewer repetitive, boring tasks so they can focus on strategy?
Has your firm found practical ways to use AI yet? Watch for more of my blogs on practical legal AI uses cases, along with perspectives on how lawyers will use AI in the future.