‘The Big Legal Shake Up!’ — How Hype is Funding LegalTech

Disclaimer: The views expressed in this article are strictly personal to the author, and are in no way endorsed by UCL Law for All Society.


Dylan reads BSc History and Philosophy of Science, and is the sitting president of LfA. He is an aspiring barrister and budding entrepreneur. He received the Freshfields Stephen Lawrence Scholarship in 2017, and has interned at Freshfields, Linklaters, Matrix Chambers, Goldman Sachs and the European Bank for Reconstruction and Development. His passions include law tech, public speaking, interdisciplinary learning, beard grooming, speed reading, and youth development.


The science fiction (Sci-Fi) genre can teach us many things about humanity. Namely, new technologies usually either terrify us as we imagine the dystopian consequences that may accompany them or fill us with boisterous optimism about the revolutionary benefits they hold. Sci-Fi is a genre of ideas, speculation and in a sense hyping about what’s next.


Legal technology (LegalTech) is no exception.


*Cue the anecdote*


Last year I had to write a report and deliver a presentation on what I thought a top-tier law firm will look like in 30 years’ time. The group project was part of my legal scholarship at Freshfields Bruckhaus Deringer — a leading commercial law firm — and gave me the opportunity to interview a suite of experts regarding their views on the future of law.


The experts included partners and other executives at Mckinsey and Company, Goldman Sachs, Deloitte, Bank of England, as well as Freshfields. Contrary to the ‘scary robots will take all our jobs’ narrative that has been peddled by the futurist, Ray Kurzweil, in ‘The Singularity is Near: When Humans Transcend Biology’ (2005), these experts gave nuanced accounts about the potential impacts of technological innovation on the legal industry.


After hearing from these experts and engaging in some scholarly debate of our own, the group concluded that LegalTech and artificial intelligence (AI) capability has been hyped, really hyped.

One year later, I find myself wondering why it is that the hype around LegalTech doesn’t show any signs of slowing down despite what the informed experts had to say. Hardly a week goes by without a new claim in the media about a robot lawyer spelling the end of traditional human lawyers.


In my last post, I made the point that technologists tend to possess an unbridled optimism towards the prospects of new technologies. What I didn’t explore were the political and social factors that give rise to their hyperbolic claims.


This blog is not intended to breathlessly chase the headlines regarding law firms’ latest innovation efforts. Instead, I’m interested in how hype and promises legitimise and constrain present actions for better and for worse.


What do I mean by ‘hype’?


I’m writing this blog one month after The Legal Geek conference — the world’s first LegalTech start-up event. The conference is a reflection of the explosion of LegalTech events. It included sessions on how AI can differentiate firms from their competitors.


The conference emphasised AI’s time-saving and scalability through practical workshops. Examples of LegalTech include BCLP’s Sharedo, which verifies property details against public records, and Freshfields’ Kira, which leverages proprietary machine learning technology to automatically identify and extract relevant information from contracts.


Clearly, the current meaning of AI in law is far removed from science fiction concepts. Yet there’s such a strong temptation to characterise the emergent field of LegalTech as revolutionary and inevitable, rather than as an incremental advance on existing technologies and techniques that may or may not have huge dividends.


Until the technologies mature and the processes are fine-tuned, the pervasive optimism that underpins the marketing and speculation surrounding LegalTech will remain largely in the realm of fiction.


Why the hype?


A major factor is the ability to attract investment. LegalTech is becoming a household word in the commercial world at least partly in response to clients’ demands for the death of the billable hour. But also, the global competitiveness and unpredictability of the legal market. No law firm aspires to be the next Nokia or Blockbuster by failing to respond to the shift in legal service delivery.


By boldly declaring that LegalTech is a revolutionary field of technological innovation with exhilarating prospects for the world of law, LegalTech providers and start-ups generate a flurry excitement among investors and law firms.


As Selin explains, hype is ‘active, shaping and constructive’ and it has an impact on day-to-day ‘decision-making, alliance building and resource allocation’. We can see this in evidence by the growing number of law firms forming partnerships with LegalTech start-ups. Take Neota Logic. It recently partnered with the Irish law firm, McCann Fitzgerald with the promise to offer brand differentiation and higher return on investment (ROI) by providing the firm with a digital extension of their business.


There’s also a recent trend in law firms encouraging their current lawyers and future pipeline to learn how to code. Both Slaughter and May and Clifford Chance have even begun offering legal-tech focused training contracts.


Paradoxically, the expectations of LegalTech seem to be at their strongest even though the technology is still at its infancy. Hype around LegalTech, and AI generally, has established a narrative of inevitability, the myth that LegalTech is an unstoppable force which is guaranteed to fundamentally alter the way lawyers do their jobs.


A similar law-like inevitability was attributed to the exponential growth in the processing power of computers through Moore’s Law. But recent studies have shown that the law which promised us that processor performance would double every two years is, to put it crudely, dead.


The reality is that corporate strategy gives impetus to LegalTech. There’s no perceivable law in nature which states that LegalTech will define the future of the legal industry and yet the hype around it would have you believe otherwise.


In this sense, hype is a handmaid of technological determinism. It would have you assume that LegalTech and legal AI will determine the development of law firms’ structure and values in a primary and all-encompassing way. Hype is rhetoric at its most powerful. As Van Lente (1993) notes, hype as promises has the ability to construe ‘forceful fictions’ that are implicated in the innovation efforts of law firms.


But we can’t assume the present position of LegalTech is some kind of absolute that doesn’t warrant further probing. Just like any business trying to survive the acrimonies of the corporate jungle, LegalTech start-ups care about their bottom line. Law firms, too, need to convince clients they are innovating to preserve client relationships.


What’s the big deal?


Social bubble


The LegalTech market is highly fragmented. But the hype around LegalTech that is currently gathering headlines tends to conflate diverse technologies under the single umbrella term of AI which creates a speculative social bubble. Even legal AI as a subset of LegalTech consists of various solutions.


On one end, legal AI solutions like Kira, LawGeex and Luminance make the lives of lawyers easier and more productive by performing contract review and analysis. On the other end, we have Lisa and Neota Logic that supposedly threaten to replace the role of lawyers entirely as they capture and automatically replicate the expertise of lawyers through machine learning.


By conflating these technologies, the hype around LegalTech makes it hard to disentangle fact from fiction, the mundane from the extraordinary. It’s not that either side of the spectrum is theoretically invalid. It’s not impossible, for example, that AI systems will perform better than human lawyers at some tasks. At least that’s what we can infer from the AI program called Case Cruncher Alpha that beat commercial lawyers at predicting whether the Financial Ombudsman would allow a claim of mis-sold payment protection insurance (PPI) after being given the basic facts of hundreds of cases.


But the conflation makes it hard to reflect on the inherent qualities of the various technologies across different contexts. As Cambridge law lecturer Felix Steffek and Ian Dodd from a company called Premonition note, had PPI experts been doing the predicting, the AI program probably would not have outperformed the humans. The lesson we can take from this example is that we do ourselves a disservice by taking the sci-fi-inspired leap of logic in concluding that AI software like Case Cruncher Alpha are the doom of lawyers. Instead, we must keep a critical eye regarding the nature of LegalTech and legal AI under various conditions.


Without clarification and clear definition of what LegalTech providers mean when they weave their accounts of futures and ‘revolutionary’ technologies, uncertainty and political agenda give way to biases.


Factions


Not everyone is buying into the hype. A 2018 report by Jomati, a legal profession consultancy, found that the keenness of firms to adopt AI solutions has been exaggerated as many firms have adopted the ‘watch and wait’ approach before choosing to invest. Richard Susskind expressed a similar sentiment in Tomorrow’s Lawyers’ where he explains that AI systems are costly to build and maintain (p186). Some have gone as far as asserting that most forms of LegalTech are ‘glorified excel spreadsheets’. There are other concerns with LegalTech and AI broadly, too, that are dividing opinions.


For example, facial-recognition technology has become so advanced that it has the potential to detect someone’s sexual orientation. In the wrong hands, such technology could lead to outrageous privacy violations. Law-enforcement officials across the globe will use AI to identify criminals but may also encroach on ordinary citizens. Countries with a stellar record of surveillance and human-rights abuses, including China, are already using AI to monitor political activity and quash dissent. AI can be biased when it comes to criminal conviction, sentencing and prediction of crime.


There’s also the prospect of legal AI contributing to the rise of monopolies in the legal industry, which would stifle innovation and consumer choice. Retailing is an example of how AI can help huge corporates gain a lion’s share in the market. Amazon, which makes extensive use of AI, controls around 40% of online commerce in the US, helping it build moats that make it difficult for rivals to compete.


Hype has the potential to distract us from these other forms of LegalTech even though they could have cataclysmic effects on civil liberties and resource allocation.


Perhaps we need to hype them up, too?


Novelty trap


The other side effect of hype is that it could lead LegalTech providers and recipients to fall into what Rayner (2004) describes as the novelty trap. As I established in the last section, the LegalTech project being propelled by firms and start-ups has inevitably invited suspicion. But the response that some firms have taken is to assert that some continuity will be maintained.


For example, law firms are joining standards-setting organisations that will produce the technical standards which seek to maintain the conventions and traditions that law firms typically promise their clients.


But most standards are voluntary in the sense that they are offered for adoption by industries without being mandated in law. It’s only when regulators start breathing down law firms’ necks that the standards become legal requirements.


How can we be sure that the damage won’t have already been done by the time this happens? Plus, a pivot back to standards and traditions seems suspiciously at odds with the revolutionary aspect of the LegalTech promise that made it so attractive to begin with. What is so appealing about LegalTech if it is dramatically altered in the course of actual implementation in law firms through standards and traditions?


That’s classic novelty trap stuff right there.


We can draw analogies with other controversial technologies that promised revolution before recoiling when subject to scrutiny. For example, GM crop advocates went from claiming that GM crops would ‘feed the whole world’ to the whole project being about ‘plant breeding’. Nanotechnology went from being ‘a new industrial revolution’ to ‘just chemistry’.


These implications give credence to the importance of hype in the material construction of reality — past, present, and future — and provide a justification for thinking about the future and LegalTech’s place in it.


What now?


It’s not very clear how we resolve the issues to which hype gives rise. Is the hype still justified despite its neglect of the impingement on fair and equal treatment? Does this neglect constitute an erasure or flight from truth? Whose view ultimately matters?


I feel like there isn’t an ultimate solution. We’re dealing with uncharted territory, so of course, it’s not going to be straightforward.


But I don’t think we should rely on distorted fictions to drive innovation.


Principles matter, especially when it concerns the law.


#LawTech #Technology #LegalTech

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