Is your staff using analytics, blockchain and OCR yet?
Corporations are ever-focused on their legal spend and demand more value from their outside counsel. Further disrupting the legal field are alternative legal service providers fueling the competitive landscape to become more crowded and innovative. As a result, Thomson Reuters’ 2018 Report on the State of the Legal Market surmised that declining profit margins, weakening collections, falling productivity, and loss of market share to alternative legal service providers are chipping away at the foundations of firm profitability.
To counteract these market pressures and to differentiate themselves from competitors, law firms are embracing technology to improve operational efficiencies and transform the way attorneys and their firms interact with clients, answer their questions, and tackle their legal challenges. The law firms that embrace technology as a means to provide more cost-effective services to their clients will have a competitive advantage. For example, digitization and automation technologies have emerged that streamline internal processes and reduce workloads, so lawyers can spend more time advising clients and less time with administrative work.
Tech Market Readiness
The 2017 International Legal Technology Association (ILTA) Technology Survey found a growing market readiness for artificial intelligence (AI) and/or machine learning technology. More than a third of its survey respondents expect these technologies to create a significant change or be a major factor in the legal technology profession within the next three to five years. When you consider US legal services reached $437 billion in 2017 (2% of US GDP according to Thomson Reuters Legal Executive Institute), the potential for AI-enabling technologies to disrupt a legal practitioner’s every day is huge, and just around the corner.
AI will transform how attorneys work from contract review to compliance analysis and discovery.
Text Analytics for Contracts
For most organizations, manual review of contracts is time and resource consuming. Fortunately, advances in AI-enabling technologies, such as semantic algorithms and new machine learning capabilities, enable natural language processing systems to understand and extract entities, facts, and relationships from complex contracts.
Text analytics has the ability to speed read documents with human-like understanding. Powerful server recognition, data capture and natural language processing, with third-party, micro-services identify key sections, clauses, entities and facts from contracts and other complex, sectioned business documents. Contracts and leases are sectioned documents containing titles or headers for each section and give us the clues we need to make sense of otherwise disparate streams of text.
Contract terms, obligations and opportunities locked within them are the critical input for a limitless number of systems, including contract lifecycle management systems, accounting, procurement, logistics, HR, and more. Contract analytics services leverage AI and natural language processing to extract the critical business intelligence required by other systems of record.
Likewise, obligations that were once well understood—and entered into many enterprise systems of record – are changing. That means any client that leases property, whether land, storefronts, equipment or vehicles, now has a looming deadline to get everything right. All leases will need to be reviewed and the obligations within identified and analyzed. For small clients with just a few leases, it can be done manually. But for major clients, some of which have thousands of leases, manual review isn’t likely to meet deadlines. In this context smart, efficient contract analytics is required to automatically identify and highlight obligations quickly and easily. Intelligence gained through the use of text analytics provides a needed lifeline to comply with new regulations while being a catalyst for delivering business value.
A second technology that will transform the legal field is blockchain. A blockchain records data across a peer-to-peer network. Every participant can see the data and verify or reject it using consensus algorithms. Approved data is entered into the ledger as a collection of “blocks” and stored in a chronological “chain” that cannot be altered.
One of the main buzzwords associated with blockchain is smart contracts. Smart contracts are self-executing agreements based on blockchain technology. With it, execution of legal agreements is done automatically. They automatically trigger actions or payments once conditions are met. In the near future, smart contracts will use real-time information, such as asset GPS data, to trigger an event, such as a transfer of ownership and funds.
Other areas, such as intellectual property and chain of custody, are also improved by using blockchain, especially with the use of digital files.
The third technology transforming day-to-day activity in law firms is the use of OCR and PDF software for increasing business productivity when working with documents. These tools access and modify information locked in paper-based documents and PDFs. This is extremely helpful during litigation when documents are collected and reviewed by attorneys prior to presenting to opposing counsel. The ability to perform text searches to identify potentially responsive documents is critical. If not done thoroughly, opposing counsel can challenge the process used to determine what documents were provided to them, which could result in possible delays, sanctions or potentially losing the case.
Even though digital transformation initiatives are in full swing at most law firms, the amount of paper involved in the total volume of documents will remain high. OCR and PDF software make life easier when converting and comparing documents. Case records, writs, pleading, patents, contracts and mandate files can all be digitized and managed and can extract or use text passages without having to retype them out or reformat them.
By embracing cutting-edge technology, e-discovery and case processing times are shorted. Client inquiries can be addressed quicker. And, law offices can transform the way they use associates, paralegals and billable hours. AI-enabling technologies applied to any formatted document enable a completely defensible document review strategy.