New technologies are throwing out the book on law procedures, and Aussie legaltech startups are helping them do it

With Alexa drawing up documents and blockchain explainers going viral, there’s no question the legal community is waking up to the wonders of modern technology. But are these developments purely disruptive, or are there benefits for the legal system?

Either way, there are opportunities to be grabbed, and Aussie startups are at the forefront of the revolution.

Legaltech startup Smarter Drafter has launched a prototype of its ‘virtual lawyer’, built into Amazon’s Alexa, that allows lawyers to verbally input information, which is drafted into legal documents that are sent to their inbox almost instantly.

Smarter Drafter uses artificial intelligence to help law firms draft documents in a matter of minutes, rather than hours. Founded in 2016, it completed a funding round in 2017, and now has more than 100 law firms on board.

Adam Long, co-founder and chief of Smarter Drafter, tells StartupSmart the introduction of artificial intelligence (AI) into the legal profession “fundamentally shifts the way lawyers do their jobs”.

However, he maintains it’s “not all doom and gloom”.

Rather than creating an automated workforce coming to turf lawyers out of their corner offices, AI will serve to complement staff.

The rationale for making Smarter Drafter available to use through Alexa was to make the service more accessible for lawyers, and available in different ways.

It’s also intended to make the experience as much like working with a human lawyer as possible, with lawyers “rattling off key facts” in the car or as they make a coffee, to be drafted up for them later, Long says.

According to Long, AI and automation simply do everything lawyers do, but at faster speeds and more efficiently.

The law is simply a series of logical rules and processes, he says, and while his own background is in strategy consulting, Long surrounds himself with what he calls “unicorns”: the rare beasts that are lawyers with computer science experience.

“We map out legal processes in excruciating detail,” Long says.

Real-life lawyers consider the context of a case, the jurisdiction it’s in and any laws that apply to it, to identify the best legal path to take. All of that can be automated, he adds.

Legaler co-founders Stevie Ghiassi and Mike Hosseini. Source: Supplied.

The blockchain bandwagon

While Smarter Drafter is banking on an AI boom, elsewhere, the industry is in a spin about blockchain.

Over the Christmas break, Stevie Ghiassi, co-founder and chief of blockchain-for-legal startup Legaler, published an ebook, Blockchain for Lawyers, aimed at lawyers looking to learn about what the distributed ledger technology might mean for them.

The response, Ghiassi says, has been staggering, with shares and feedback serving to interrupt his would-be-peaceful holidays.

The ebook was shared on legal technology publication Legal IT Insider on January 11, and since then has received 1.7 million views, and prompted a Forbes follow-up article asking what this says about the industry.

From Ghiassi’s perspective, it shows there’s a shift in the way lawyers are looking at blockchain.

For the majority, their first introduction to blockchain was “from a nefarious aspect”, that is, Silk Road and the use of bitcoin for money laundering purposes.

But “the world has changed a lot”, he says.

For a start, more and more lawyers are focusing on blockchain-related business, whether that’s working on initial coin offerings and cryptocurrency projects, or representing companies based on the technology.

“There’s so much to talk about from a regulatory perspective,” Ghiassi says.

“[Blockchain] is causing ripples through every sector of the financial industry, and lawyers interact with all of that.”

But there is also growing interest in smart contracts and the areas in which blockchain could disintermediate the role of a real-life lawyer.

In real terms, the “core commodity of contracts probably hasn’t changed in 5,000 years”, Ghiassi says.

When it comes to contracts, a large part of a lawyer’s role is to act as an intermediary in a relationship.

“A lot of the hard work gets done before or after that,” he adds.

The rise of blockchain technology lands lawyers in a similar spot to the rise of AI. While they may have less of a role, that allows them to avoid monotonous tasks that take up too much of their time.

“Lawyers don’t want to do those [tasks], they want to do high-value work,” Ghiassi says.

Even if technology could eventually replace the junior associate trawling law libraries and pulling together case law, that’s a junior working their training wheels by doing something with a little more impact.

Power to the people

Whether lawyers like it or not, disruption is coming for them, and the consensus suggests they should get on board or get left behind.

In the future, every law firm will be operating with blockchain capabilities, Ghiassi says.

“That’s inevitable. It’s as simple as using the internet. Blockchain is just another network protocol that will essentially fade into the background.”

At law firms all over the country — and all over the world — millennials who have been surrounded by technology their whole lives are rising up the ranks, and rethinking the out-of-date systems and processes, he says.

At the same time, there is more and more pressure from clients to be efficient. The market is demanding fixed fees, rather than billable hours, and “the onus here is on the lawyers to be efficient within that range,” Ghiassi says.

Similarly, AI’s potential to speed up the drafting of documents and research-related tasks will mean lawyers can spend more time with their clients, ultimately providing a better service, Long says.

And while “it’s the lawyers that are adopting AI that are going to thrive”, there’s still a need for the human touch, Long says, and a pairing of automation with human intelligence and interaction.

“Humans working with computers — that’s the future of professional services,” Long says.

“Others need to adapt, or they’re very much at risk of being left behind.”

Finally, technologies such as AI and blockchain serve to empower a whole subset of people outside of the traditional law office.

According to Ghiassi, we could soon see some contracts and basic legal agreements completed without the help of a lawyer at all.

In fact, with contract templates already available to download and personalise, that’s already happening. Blockchain will only make the process “a bit smarter”, he says.

While developments like this may disintermediate lawyers entirely, Ghiassi notes that, according to the UN, some four billion people, globally, have no access to legal help.

“We’re looking at a $1 trillion industry that only serves a small portion of the world,” Ghiassi says.

“The only thing that can help that is tech, whether it’s automatic dispute resolution, creating access-to-justice platforms or marketplaces that are cheaper because they’re peer-to-peer,” he adds.

Lawyers may be being disrupted, he says, but there’s a lot of work that can be done for them to expand their clientele.

“There’s still a huge latent market of the average person who can’t access the legal system or legal help,” he says.

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