Artificial Lawyer: Predictions We Got Wrong + Those We Got Right – Parts 1 and 2
“The great thing about making predictions is that no one ever goes back and checks if you were right,” a management consultant once told us. Well, now here’s a chance to fix that. Artificial Lawyer asked a range of people from across the sector the following question: Please tell us about one prediction/ expectation you had that never materialized, and one that did—and why you think it turned out that way. Here is what they said.
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Sacha Kirk, Co-Founder & CMO, Lawcadia
I (naively?) expected that the legal sector, and others, would not try to return to the previous “normal” working arrangements and expectations of working in the traditional office five days a week. I have been surprised by the passionate discussions that I have observed about getting staff back to the office. I suspect that those who engage with their staff and strike a reasonable balance will be able to find and retain staff and outperform those who refuse to be flexible. Let’s wait and see.
Seven years ago, people in the legal industry thought that we (Lawcadia) were crazy to try to introduce a structured digital process to the way that in-house legal teams engaged with their law firms on matters, scope of work, budgets, and spend. Fortunately, we were on to something, and that is one prediction that materialized. More and more in-house legal teams are now looking for ways to increase transparency, accountability, collaboration, and automate reporting and workflows.
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Alex Herrity, Director – Global Legal Solutions, Adidas
For a while I thought speech-driven virtual assistants would become prevalent in the legal tech space. Somewhere in between dictation and J.A.R.V.I.S. from Iron Man, but in my own experience, I’ve not seen much of anything in that space (even as a gimmicky feature) and in truth, things like Alexa and Siri seem to have taken a backseat. However, I do think tools that can collate, prompt, or otherwise surface appropriate information easily and on demand are a massive part of our current landscape and will continue to improve into the near future.
Low to no code platforms were on my prediction/expectation list and I’m really pleased they’ve landed with decent impact in the last few years. My view is that lawyers have plenty of good ideas, but the barrier to creating an MVP and/or exploring in a safe sandbox type of environment really stifled innovation. Now impactful and powerful solutions can be created and iterated all within the control of the legal team for a fraction of the price and time spent with developers.
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Anthony Widdop, Global Director, Legal Operations, Shearman & Sterling
Back in 2010, I wrote an article on network orchestration for law firms. This looked at how advances in technology through Web 2.0 and the development of the cloud could provide opportunities to construct external networks of partner organizations to increase value, create new capabilities, and reduce risk for clients. It was probably too soon at that time, but this is now starting to become more common in the market.
I always had a view that service providers such as law firms had a lot of untapped internal capabilities that could add value directly to clients. It is great to now see many more firms coordinating these capabilities under legal operations. This provides career opportunities and new pathways for internal talent and is a great way to add further value to client relationships.
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Carla Swansburg, CEO, ClearyX
I continued to be surprised at the lack of use cases for AI and, in particular, increasingly sophisticated language models. I believe the differentiation in the new models is their ability to “write” and while I am with the majority in saying that AI tools are not going to be taking over legal communication or drafting any time soon, I do see some use cases around the margins (summarizing/differentiating contract provisions, for example) where we haven’t seen any adoption. This includes fairly mature ML tools for things like contract review/data extraction, where the underlying models continue to be relatively stable, older language models. I get that AI is a large lump of raw material requiring significant work to become something useful, but the potential seems lurking under the surface!
I have predicted for a few years the consolidation of tools under a few more powerful platforms and we are indeed seeing that, not just with Thomson Reuters, but with Litera and others.
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Ben Allgrove, Head of Innovation, Baker McKenzie
I predicted a few years ago that the burgeoning legal tech ecosystem could not survive in its current form. The legal market was too fragmented. The problem statement’s not sufficiently precise. And the business case is often tenuous. That has come to pass, evidenced by the continuing consolidation (to put it politely) we are seeing in the legal tech space.
But I also predicted that there would be a much more advanced/progressed discussion about the standard setting required to underpin a truly digital legal supply chain. We’ve lacked a critical mass of clients and firms willing to work together to progress this crucial piece of infrastructure and enabler.
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Karl Chapman, CEO, Kim Technologies
Demise of the hourly billing model
When we set up Riverview Law in 2011 with a fixed-priced service delivery model, we thought that the hourly billing model was time limited. How could it not be? It transferred risk to the client, embedded inefficiency (why would lawyers be efficient if they can recover the hours they work?) and took no account of value. It was only logical that the customer (who holds the purse strings and has the power to drive change) would get fed up and demand pricing innovation. While there has been some change, 11 years later, hourly billing is still alive and kicking. As long as customers tolerate it and law firms reward people on the number of hours billed, hourly billing will take a long time to become the minority method of billing.
Legal Managed Services and the Rise of the ALPs
The move to outsourced legal managed services, the rise of the Alternative Legal Providers (ALPs), the focus on technology and data, and the entry of the Big 4 accounting firms into legal were not difficult trends to identify. These were trends seen in many other functions and while new to legal, outsourcing is a well-proven model over many decades. It’s why we set up Riverview Law in 2011. Eleven years on and this trend is still largely in the foothills, but the actions of the Big 4, the number of law firms who have set up managed service units and the performance of the independent ALPs tells the story. The rise of legal technology as a segment also tells its own story and it is now rare to have to make the case for the power of actionable data and how it can help legal (as it helps every other function/sector).
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Haley Altman, Litera/partly doing other things
I thought we would see much greater adoption of technology broadly, but more so in the collaboration/workflow space. With a move to hybrid work, these tools can enable management of complicated matters across geographic regions. With the rise of the use of Teams, you would think it would translate more to collaborating in other environments. There seems to be pockets of strong adoption, but the value that can be driven from the tech hasn’t completely translated to broader usage.
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David Carns, Chief Evangelist, Casepoint
I assumed machine learning would be used more to improve the UI/UX of legal technology systems in order to anticipate user needs/actions/behaviors and offer recommended next steps, but that never materialized—at least not yet. My suspicion is that those sorts of improvements will come to fruition once some of the “bigger ticket” improvements are completed in those platforms.
I did predict that document classifier AI (aka TAR) would finally hit the mainstream. Arguably, it has become a “table stakes” feature in most eDiscovery platforms today. I suspect the fact that the technology finally became low cost and easy to use had everything to do with its adoption versus appreciating the overall cost-benefit analysis.
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Electra Japonas, CEO at TLB and co-founder of oneNDA and Claustack
One of the predictions I made was about how advanced AI would be by now, particularly with respect to how contracts are managed. It is in fact nowhere near as advanced as I’d hoped. I believe this is because of the fact that contracts are completely unstructured in the way they’re created. This simply hinders the power of AI and what it can do to transform the world of contracts. It also hammers home how important standardization is in terms of enabling technology to offer advanced solutions, the capabilities of which are currently wasted to an extent.
A prediction I made that did come true is around how user-centricity will consistently become more and more important in the practice of law. We are seeing that in the tech solutions that are on the market, particularly those that are native to existing tools already used by lawyers and that meet the user where they are. There’s high demand for process and document design services and the overall language that people are using much more widely when it comes to the application of design thinking principles to law.
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Kelly Harbour, SALI Board Member, also at Goulston & Storrs
I have spent quite a bit of time working with the SALI Alliance over the last few years, both as a key stakeholder in Goulston & Storrs’ adoption of the Legal Matter Specification Standard and subsequently as a member of the organization’s volunteer operations team. The SALI Alliance is a not-for-profit organization that comprises legal industry professionals from legal operations, law firms, and solution providers with the goal of developing open, practical industry standards for efficient and innovative legal services. I have been waiting for a groundswell of adoption to indicate that the standard was taking hold, and it arrived in 2022. In the last year, there has been a huge uptick in implementation, including among big names like Thomson Reuters, Intapp, Litera, iManage, and NetDocs, an increasing number of law firms, and law departments at Microsoft and Intel. These are incredibly important milestones that indicate to me that the standard is being used as intended—across all parties in the ecosystem for mutual benefit. In an industry where the first question is often, “Who else is using it?” there are truly impressive names involved that will cause quite an increasing number of law firms to take notice.
I attribute the uptick in adoption this year in part to the sophisticated, data-driven business professionals at law firms who need accurate and complete data to do their jobs effectively, from pricing to business development to legal project management, and more. These professionals are willing to invest the time to ensure they have rich, reliable data to achieve their (and the firms’) goals. With law firm professionals pushing for the standard, the service providers in our industry have listened and responded, making significant strides to incorporate the standard into their solutions. And, of course, some of these companies are forward-thinking and see implementation of the LMSS as a benefit to their current and future customers, whether they are being pushed for it today or not.
At the same time, legal departments have not been as quick to adopt the Legal Matter Specification Standard as I would have thought. The benefits to in-house teams seem to me, perhaps, the most meaningful and impactful, so I thought they would be the first off the blocks to adopt the standard, thereby driving change among law firms and service providers. In reality, many legal departments are over-extended just keeping up with the work being done internally and by law firms. It is difficult to allocate precious resources to an effort that stands to provide transformational benefits down the road but will not provide immediate relief from day-to-day demands. The adoption of the standard by Microsoft and Intel may be an indication that in the coming years, we will see more uptake among legal departments as well.
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Conan Hines, Legal Tech Advisor, Clifford Chance (New York)
I never thought blockchain would be disruptive in legal, and that has pretty much played out. I also thought legal innovation would gravitate more toward IT in order to scale, but it seems the trend is more toward BD/marketing. I think this goes to show that firms really want to promote the innovation they can’t deliver.
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Karl Harris, CEO, Lex Machina (part of LexisNexis)
Alongside the growth and usage of technology and tools, I’d have thought mid-tier law firms would experience more growth in business that allowed them to compete more evenly with the major top-tier law firms. Instead, it appears that the top-tier law firms have consolidated their power and elite statuses even more. For example, revenue and profits per partner in the top corporate law firms have continued to expand at a pace not matched by law firms in the tier below.
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Anthony Seale, CEO, Legatics
I thought 2022 would be the year of greater transition to the cloud. It seemed to me that law firms had fully bought into the idea, long after most of their clients had. While COVID did induce the start of a number of cloud transition projects, their scale meant that it’s taking firms many more years to complete than I originally thought, even with the knowledge that these things take longer than expected. There are also a few firms, predominantly in the U.S., who are still holding back.
Going into the year, I expected to see a shift from technologies that had received a lot of hype, which were often heavily AI-based, toward simpler but highly adoptable and useful workflow technologies. This came true. Law firms realized that the lowest-hanging fruit was most often simple but needed advances in organization, project management, and routine automation. The market rightly moved on from the overexcited discussions around AI replacing lawyers to finding some easy and more practical wins.
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Jack Shepherd, iManage
I predicted that most of the major transactions would be completed through a transaction management tool, rather than Microsoft Word. I thought these tools would ride the wave of changes in work processes driven by the pandemic. There has been a gradual increase in adoption of these tools, but not perhaps to the extent I had envisioned. To get over the curve, clients should be aware of the operational, efficiency, and quality benefits of using structured processes to do day-to-day tasks. It seems crazy in 2022/23 that our primary way of managing complex projects is using a word processing tool, and that the way we collaborate on documents often comes down to Word documents being exchanged by email.
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Nick Watson, CEO, Ruby Datum
I think increased collaboration was always a prediction of mine, and I am very pleased to see this happening more now, especially thanks to initiatives such as the Centre for Legal Innovation, ILTA, ELTA, Law School 2.0, and many more. Lawyers are very interested in tech now and working together across firms and across departments to collaborate.
One that didn’t? I thought more consolidation would happen, but then the pandemic happened, and instead we saw more new tech companies start up as the Great Resignation happened—Litera seems to have gone quiet also. Bring back exciting M&A deals again, please.
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Jerry Levine, Chief Evangelist, ContractPodAi
What didn’t materialize:
I expected to see more consolidation in the legal technology space, but instead, we’ve seen a bigger shift toward platform solutions. This has created more room for everyone to work together and the growth of end-to-end solutions and portions that can plug into such solutions. The “enterprise-ification” of legal technology vendors that have recognized the value of the solutions for contract lifecycle management (CLM) and other items that can be used across the enterprise will likely continue into the new year. In addition to the lack of consolidation within the legal technology space, we haven’t seen legal departments invest in new technology as much as initially planned for 2022, which is not surprising, due to the current economic landscape. With law department leaders forced to reconsider their technology budgets in light of the recession, legal leaders were inhibited from investing as much as they maybe should’ve in new technology.
What did materialize:
As the idea of a hybrid work environment became even more concrete across industries and for legal teams in those industries, we saw widespread adoption of new tools that supported hybrid work. Technology has not only helped with productivity, accessibility, and collaboration with colleagues remotely, but it’s also assisted in reducing employee burnout and stress. This is another trend that will continue into 2023 as our strange and confusing employment environment continues. It’s a complex and competitive job market, and businesses and legal will be better equipped to attract and retain talent in the new year by making smart investments in technology to help teams avoid burnout and stress.
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Helena Hallgarn, VQ Virtual Intelligence + Standards Monitor
I thought we would move away from the billable hour much more than has happened so far. The reason for this might be the lack of standardization. So far, at least here in Sweden, we haven’t really started using standards such as SALI Alliance to standardize how we define legal matters. And if we cannot agree on these definitions, we cannot compare the cost between different suppliers. This is a true obstacle toward more fixed prices.
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Olga Mack, VP at LexisNexis and CEO of Parley Pro
I envisioned, hoped, and dreamed that many more talented, mission-driven, enthusiastic professionals would enter the field of law by now. After all, the rule of law and civil society are mission-critical for a functioning democracy and peace. Law anywhere—private or public sector, in a country or organization, on the streets, or at home—is law everywhere. Law is a public good. All multi-talented, diverse hands-on-deck is how we get there in our lifetime. In 2022, we saw three powerful and traumatic examples— the war in Ukraine, the Iranian women crisis, and the fall of FTX—of what happens when lawlessness is the norm. It is simply not enough for lawyers to do their best at modernizing and digitizing law and legal experiences. We as legal professionals must proactively invite other professionals to make the law more accessible.
The great news is that some key tech advancements are ahead of schedule and market expectations. Specifically, at the beginning of 2022, many people expected meaningful AI/ML progress in three to five years; it was widely regarded as an optimistic expectation. However, change is arriving and it is practically here—significant tech progress was recently made, and more is coming. In the classic Gate’s Law manner, we underestimated the change that occurs in the long term. So yes, bring popcorn to watch the world change, including the practice of law. But also bring your open mind and put your active learning hat on as new tools will emerge, some skills will become obsolete, and new skills will be required. Finally, remember that change is not always easy, even when exciting and promising. If you lead a legal team or department or provide services, make sure everyone joins and fully participates as the practice of law changes. After all, the change is only good when the benefits are shared with everyone.
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Richard Mabey, CEO, Juro
As a business leader, I had an expectation that the collapse in market sentiment and investment over summer would mean that lawyers would struggle to find time for legal tech projects. What we found instead was that the efficiency gains that prospective customers were looking for from Juro went from “fairly pressing” to “absolutely mission-critical”—if there is existential strategic risk to the business, the last thing a GC wants to be worrying about is routine paperwork that anyone could do. Just automate it and save your headcount asks for higher-value work.
Looking inwards for a moment, one prediction that turned out to be right, thankfully, is that the flexible ways of working we were forced to adopt during COVID are here to stay. Instead of forcing people back to the office, we kept things choice-first, and offering that flexibility both in terms of existing employees and also the new execs we hired has been great for our culture and employee satisfaction.
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Michael Grupp, CEO, BRYTER
It looks like I was right that in-house legal teams will find use cases that can be solved through automation and that lawyers can provide self-service support toward their organizations for standard requests that are coming in frequently. And it is true that law firms develop some of those solutions for their clients. So legal teams do want to change, and they are interested in doing this themselves, with their own technology.
But I was wrong about who is doing the building: “No Code” enables literally everyone to build, including the lawyers in law firms and in-house. In the beginning, we put a lot of effort into user experience and the functioning of our platform so that they could. But it turned out that for being serious about building digital solutions, it is a full-time job of someone fully owning it. Especially for more valuable use cases, it is the legal engineers, legal ops, and innovation teams that are driving development. Sure, lawyers are involved, and it is great if they can have an active, collaborative role, but real change still involves specialists. And we learned that these builders don’t hesitate to use powerful features, so our product direction was quite impacted by this.
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Peter Baumann, CEO, ActiveNav
One expectation that did not occur was an end to “User-Centric Compliance.” The risk of data spillage has only grown more acute (and the consequences more dire) as the broad adoption of the “work from anywhere’ movement continues to present a host of new security challenges. I would imagine everyone in the industry knows the heavy burden of data spillage risks.
Heading into 2022, I had hoped that corporate legal departments would take a larger role and work hand-in-hand with their IT teams on prevention methods that will keep their organization’s data secure, prevent legal ramifications and reputational damage, and avoid fines. However, thus far and despite the many newsworthy breaches, we continue to see a heavy reliance on user-based tagging for managing compliance. With the massive amount of data being produced, this is simply no longer feasible and surely inadequate.
Why is user-based tagging still a main pillar of compliance? I can surmise that it’s a combination of the following:
- Lacking centralized software to do it efficiently
- Lacking designated employees whose sole job is to manage compliance of sensitive data
- Other priorities consistently pushing this “more difficult” behemoth initiative to the back burner
Of course, one can always point to a deficiency in leaders who either recognize this imperative or are willing to wrestle with how great a pivot that non-user-based compliance entails.
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Tim Pullan, CEO, Thought River
In 2019, I predicted we would see less talk about AI and more focus on real challenges the legal services industry is addressing: automation and digitization. Actually, I was completely wrong. It’s still about the AI and I think that’s because what we can now do is simply way beyond what we thought possible in 2019 and it’s going to go a lot further still. Even as an insider I am continually surprised.
In the same year, I predicted large, new players entering the market and that’s now happening with companies, such as ServiceNow, turning their attention to legal process. That was easy, though.
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Horace Wu, CEO, Syntheia
I have always been bearish on blockchain technology as applied to the legal profession. I expected progress to stall because there are, in my view, no real problems big enough or painful enough in legal that could ONLY be solved by blockchains. So far, I have not seen much traction in blockchain technologies in legal, and I think we will see even less of it in 2023.
On the other hand, as much as I was bullish on AI and NLP (Natural Language Processing) technology, I was not bullish enough! ChatGPT and recent advances made generally in the NLP field are staggering. Legal is seeing the tip of the iceberg. There are so many brilliant data scientists and engineers working on AI and NLP problems (e.g., the sheer number of papers showcased at NeurIPS this year) that even if only 10% of these advances are relevant to law, we will see a massive uplift from this class of technology. There are still some hurdles to the adoption of this class of technology in law (like the security of data and the perception of security), but these are adoption problems that will be overcome in 2023 through 2025.
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Shilpa Bhandarkar, CEO, CreateiQ, part of Linklaters
Going back to 2020, I had predicted that innovation was going to be all about the “people” piece of the people-process-technology triangle, with an emphasis on design thinking. Sadly, while there has been some interest and focus on this area, I don’t think mindsets have changed in any material way in recent years—at least nowhere as much as I had hoped. I suspect partly because it is difficult to measure the ROI of a change in approach (versus the introduction of a new process or tool) and partly because people still generally associate design thinking with only visual design.
On the flip side, I had also predicted that data analytics and technology tools would serve as enablers to a differentiated customer experience for our clients and our lawyers. I think this one is definitely playing out in the industry, slowly but surely. The focus on automation and efficiency, combined with the raft of repapering triggered by regulatory changes (e.g., CSA repapering, IBOR reform, Brexit, etc.) and a post-pandemic acceptance of more digital ways of working have all played their part in enabling that change.
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Serena Wellen, Sr. Director at LexisNexis
Two promising technologies that did not materialize in 2022 were the metaverse and blockchain. With the pandemic forcing people to spend more time online for work, academic, and personal use, I had hoped to see significant advances in metaverse development. Despite billions of dollars invested in R&D, the metaverse still has not gotten much traction, user engagement, or better experiences.
Similarly, the blockchain has failed to deliver significant value to the legal industry in 2022 due to limited applications and legal use-cases. Even for smart contracts, the blockchain has a number of technical restrictions and drawbacks, such as scalability, long transaction processing times, user verification, and privacy issues. Until such applications and use-cases are developed and defined, blockchain will continue to be a technology in search of a solution.
One technology breakthrough that has materialized this year was Large Language Models (LLMs). Technologists have found ways to make these once-opaque data “black boxes” more transparent and easily verifiable (a prerequisite for legal use) by fine tuning them on legal data sets, honing the output with models trained for specific legal use cases, and evaluating output accuracy based on known legal “truths.” As a result, LLMs are getting smarter and more accurate and reliable. There are still a number of issues that need to be addressed before we see this technology implemented more broadly, but the advances in 2022 were significant.
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Prashant Dubey, Agiloft’s Chief Strategy Officer
Last year, I predicted that the enterprise would find a way to enable their sales teams to avoid elevating so many of their contracts to legal. While that transformation is underway, it seemed we had one more year of empirical data that most contracts are not bespoke and end up at the same endpoint. With that insight, we see a huge number of “hockey stick” prospects looking to make that endpoint the new starting point without the need for deep legal review on every agreement, while also providing sales teams pre-approved fallback provisions. This will provide sales teams more negotiation flexibility and immediately accelerate contracting cycle times for the sales process, reducing the need to get legal teams involved.
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Jenifer Swallow, Legal Tech expert and former boss of LawtechUK
For 2020, I predicted that General Counsel will have an “Avengers Assemble” moment, when they use their individual and collective power to demand change: alternative resourcing models, standardized tools/platforms, and more.
We have seen some individual cape-wearing and great pockets of collaboration since then, but no full “Avengers Assemble” mode. COVID drove GCs into crisis, deprioritizing important-but-not-as-urgent work and stripping the time and appetite for evaluating and re-engineering infrastructure, processes, and resourcing. There is now a proliferation of GC forums, with several that are very active and useful in different ways, but none yet moving toward a common “Avenger” goal, and these things do need driving. Maybe in the end the shift will be purely incremental: GC by GC, digging deeper on strategy and unapologetic execution, but the opportunity of harnessing that collective power is so clear; e.g., reframing the law firm/client service model and employer/client dynamic, eradicating fake bespoke work, and sharing data insights to serve clients and the public interest in volatile times.
For 2021, I predicted that regulators will take a more active role in sector innovation, and strides will be taken toward unlocking legal data, perhaps paving the way for the establishment of a legal sharing economy. So maybe I cheated on this one, as I had every intention of personally assuring this would come to pass. Bringing the legal, finance, and privacy regulators together into a single forum precipitated an increased regulatory focus on sector innovation, its criticality for the effective practice of law, and the practical support that regulators can provide to lawtech businesses building in this space. There is still a way to go before regulator data is available via API; digital competency is a requirement of study and legal practice, and misconceptions around confidentiality stop being used as an excuse not to share data access, but the foundation has been built and further steps are being taken. The success factor from here—as with all things—will be leadership.
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Hugo Seymour, Chief Operating Officer at Della
Last year, I hoped that firms would play a more active, consultative role on the legal and technical aspects of running a business. Step forward Shearman’s legal operations unit, which launched to much acclaim in October, following ClearyX going live in June. This is an attractive move for firms. Consultancy of this form can be sold to their existing client base, allowing them to use what was previously a cost center to generate revenue, and is sufficiently complex that it doesn’t impinge on the firm’s image.
I half-heartedly predicted the death of the billable hour. That was a mistake. The billable hour will never die.
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Thanks again to everyone who took part. Very stimulating thoughts.
Additionally, something else people may want to have on their radars are two great Legal Innovators conferences taking place in the U.S. and UK next year:
Legal Innovators California – San Francisco, June 7 and 8, 2023
And
Legal Innovators UK – London, November 8 and 9, 2023
I will be chairing both of the two-day conferences as usual and also will be publishing updates on Artificial Lawyer throughout the year, featuring conference details, speaker profiles, and more. Keep an eye out for those next year! I look forward to seeing you in London and San Francisco in 2023!
Richard Tromans, Founder, Artificial Lawyer and Legal Innovators Conference Chair
Sources:
Artificial Lawyer (2022, December 20). Predictions We Got Wrong + Those We Got Right – Part https://www.artificiallawyer.com/2022/12/20/predictions-we-got-wrong-those-we-got-right-part-1/
Artificial Lawyer (2022, December 21). Predictions We Got Wrong + Those We Got Right – Part https://www.artificiallawyer.com/2022/12/21/predictions-we-got-wrong-those-we-got-right-part-2/
