Global verein Dentons is on a mission to drive innovation in legal services and to transform the legal profession. With almost 8 000 lawyers in more than 50 countries, the firm is positioned to make RnD and tech investments that typically make sense for players like big accounting firms (who all use AI today) but perhaps less so for smaller law firms.
In may 2015, Dentons launched Nextlaw Labs, a platform through which the firm will develop, deploy and invest in new technology. Since then, the lab has invested in startups such as Hire an Esquire, Doxly and ROSS (keep an eye out for our upcoming interview with co-founder and CEO Andrew Arruda).
The question "Will robots replace lawyers?" invariably comes up at legal conferences these days, and Lexpo was no exception. How much of a typical law firm’s work can be automated?
- It really depends on a couple of factors. First, the nature of the work itself will determine how much can be automated. Significant chunks of repetitive work can be assisted or augmented with new tools, provided you have templates, workflow and the collective discipline to use them consistently, says Marie Bernard, Europe innovation director at Dentons.
- Another factor affecting the automation of legal practices is risk aversion. Clients and firms that want to avoid all risks at any cost often stick with what they know and what they can control, and so are more at ease with the work being done by a person - as if a document or output delivered 100% by humans is 100% perfect.
- But the perspective is changing. More and more, we are getting the message from our clients that automated processes may not be 100% perfect, but neither is manual work. And it’s only the beginning. In the future, when we have more experience and some legal guidance on potential liability of machine-powered output, we may see pricing models whereby clients can choose the degree of human interaction in their final product.
Do clients demand change? According to a study by Altman Weil, lack of pressure from buyers is one of the main reasons for the slow development.
- We’re constantly talking to clients, and I cannot recall a single conversation where someone did not ask: What can you do differently? How can you deliver better, faster, cheaper legal services? So I think clients expect their lawyers to keep up with the times, says Bernard.
- What we do see however, and what supports the study you refer to, is that there isn’t one large movement of clients crying out for legal tech innovation. First and foremost, they still want a lawyer they can trust to protect their interests and get the job done.
- In-house departments are also at various stages of their innovation journey, with an added constraint: not only do they have to embrace the changes in their core profession as lawyers, they must also keep on track with the digitalization of their industry and the strategic transformation of their own company. Over the past 12 to 18 months, I have witnessed a new shift, much more down to earth, between clients and law firms. It may not be “le grand soir” of disruption, but more the dawn of practical collaboration on process improvement and tool alignment.
According to a recent Swedish study it’s difficult to compete with digitalization as tools are readily available for all firms. Do you agree?
- Interesting one! I would agree that a number of mainstream tools – in particular those related to the business of law, such as automation tools and dashboards, are indeed available in most markets – at least as “first generation” tools. But I wouldn’t necessarily say that they are readily available to all firms. There are still a number of barriers to entry – cost, culture and technical issues in integrating new tools with legacy systems.
What AI applications will we see in the future, besides document review and automation?
- Statistical and predictive analysis is one of my favorites so far, as a few pilots we’ve been doing have demonstrated how intuitive and adoptable it can be.
- Its use depends on the availability of source data in your market, but where open legal data is available, predictive analysis could trigger good results in the not-too-distant future. We are currently looking at this technology to support litigation and arbitration, but fairly soon lawyers might also use big data to negotiate and draft clauses that will help prevent disputes in the first place.
- New technologies and practices are also dramatically changing the standards of compliance. We can now analyze huge amounts of data in search of patterns and trends. For example, I’ve see some very promising work using geolocation to provide a granular analysis of client risks.
Can predictive analytics help law firms offer fixed fees? I know Clocktimizer is doing interesting things with AI and time-tracking here in the Netherlands.
- We have been piloting a predictive analytics tool in several practice groups in Paris since the beginning of this year. Some benefits were immediately visible, and we’re still exploring others – as is often the case with innovative projects! By using available data, we can predict the success of a litigation, which will ultimately help us provide better quality legal advice. From there, predictability could also help us offer more accurate pricing and potentially even fixed fees – which are popular with clients.
How does AI affect the business model? Have you made any significant changes so far?
- So far, the biggest impact on Dentons’ business model has been the creation of Nextlaw Labs as a platform to develop AI and other new technologies. But looking further down the road, I would imagine that AI will have a wide ranging impact on our business model. First of all, there is a HR element. Since AI will automate routine tasks, lawyers will have more time to focus on value added work and client relationships. This will mean junior lawyers will need to develop client relationship skills and business acumen earlier in their career. It also means that all lawyers will need to be tech savvy.
- There will also be an impact on pricing and revenue models. On one hand, AI can boost profitability by improving effectiveness and efficiency. On the other hand, some work that lawyers bill for today will be done at a lower cost or even for free in the future. And of course, as AI develops in the legal sector, law firms will need to invest more time and money on innovation and technology.
What about NextLaw labs - any new projects this year?
- Nextlaw Labs is in its second year of existence, so our roster of technology partners is growing. Some projects are entering a maturity phase, while a new generation is entering the pipeline. In the last few months alone, we have announced investments in Beagle, which uses artificial intelligence to transform contract review; FileFacets, a data analytics and content migration platform; and most recently, ProFinda, an AI-powered expertise finding platform.
- While we keep on screening potential investments to further develop our portfolio, some of our own tools are now approaching a stage where we can soon bring them to market. Some of our lawyers are acting as beta testers, sharing not only their legal insights, but also user feedback about how lawyers and their will actually be using the tools. This feedback, based on our lawyers’ practical experience, means that we will be able to go to market confident that our products are truly fit for purpose.
Finally, what are your thoughts on Lexpo?
- There are so many legal tech events cropping up that we’re all becoming picky, so the events must be special to bend my travel plans! By a brilliant convergence of my agenda, Dentons is celebrating the launch of its Amsterdam office the this week. So it’s a win-win. I’ve had Lexpo on my radar for a while as an event not to be missed, even before the organizers contacted me to speak. Beyond the speakers themselves, I am really impressed by the Dutch legal tech scene.