“Can machines think?” was the question posed by Alan Turing in 1950.
Turing hypothesised that a machine could be developed that would have the ability to generate human-like responses.
Seven decades later, we’re continuing to see this exploration play out in all industries from medicine, defence, automation, energy, finance, and now even law.
However, the concept of using machines in law is not a new one, Gottfried Wilhelm Leibniz, a German lawyer in the 1600s concluded: “It is unworthy of excellent men to lose hours like slaves in the labour of calculation which could safely be relegated to anyone else if machines were used.”
He went on to say “The only way to rectify our reasonings is to make them as tangible as those of the Mathematicians so that we can find our error at a glance, and when there are disputes among persons, we can simply say: Let us calculate, without further ado, to see who is right”
Building on these original concepts, we’ll elaborate on the questions of how AI can help law firms increase profit, reduce errors, improve customer experience.
AN INTRODUCTION TO AI
AI continues to be a hugely popular topic of late. However, amongst the excitement of buzzwords and the implied fear of job losses, it is difficult to comprehend the real benefits that AI can bring to the law industry.
With all the hyperbole flying around, why should law firms invest in AI technology when they don’t have a complete understanding about the positive impact and opportunities that AI will bring to their companies now and in the future?
This confusion in the market about AI prompted Imprima to discuss the real, tangible benefits that AI can bring to law firms.
WHY IS IT SO IMPORTANT TO ANSWER THESE QUESTIONS NOW?
AI is no longer a futuristic idea, or technology that only Google, Amazon, and Uber are using. It is happening now, and it is evolving at a rapid pace with law firms all over the world using it to process and understand huge amounts of data during the due diligence process.
As with any new technology uptake, some companies are investing heavily in AI whilst others are thinking they don’t need to worry about it for a few years.
The hard truth is that forward-thinking law firms are using it today to streamline tasks and processes, in turn reducing costs and increasing productivity.
And that means it’s time to get ready.
HOW WOULD IT WORK?
An AI platform designed for the legal profession should allow users to automatically collect, shift and filter agreements from non-agreements, analysing and classifying individual documents to provide immediate insight into contractual obligations, risks, and opportunities.
By analysing the content of documents when these are uploaded into a Virtual Data Room, and while in the VDR deal risks can be identified and resolved before, as well as during, due diligence.
Documents can be quickly organised in the structure required for the deal process.
HOW ACCURATE IS AI-POWERED DUE DILIGENCE?
In 2011, a scientific study performed by Grossmann and Cormack reiterated what lawyers have known for years – manual reviews of due diligence contracts often deliver subpar accuracy (recall) ranging between 50% and 85%.
Similarly, Imprima has performed our own experiments on our own proprietary machine learning tool which delivers a consistent accuracy rate (recall) of 95% or higher.
Furthermore, in contract review AI often takes seconds to perform the same review that humans take 90 minutes to achieve. These are very compelling benefits for forward-thinking law firms.
WILL THIS RESULT IN JOB LOSSES?
The evolution of AI provides an opportunity for lawyers to expedite their work. It is playing a significant role in augmenting the repetitive tasks performed by lawyers allowing them to focus on other tasks such as innovating services to offer clients, thus expanding functions within teams.
AI should be viewed as an opportunity and not a threat to jobs, as it evolves the practice of law and improves how teams manage and process information.
“Having the AI do a first review of an NDA, much like having a paralegal issue spot, would free up valuable time for lawyers to focus on client counseling and other higher-value work,” said Erika Buell, clinical professor at Duke University School of Law.
She went on to say; “I strongly believe that law students and junior lawyers need to understand these AI tools, and other technologies, that will help make them better lawyers and shape future legal practice…. I would expect that the general public, to the extent they want their lawyers to work efficiently on their legal matters, will be excited about this new tool.“
HUMANS AND AI – AN AMAZING COMBINATION
Technology has already drastically impacted the way law firms operate, from typewriters to computers, fax machines to email, every advancement has transformed the industry and made it more efficient.
However, the one thing that has been consistent for law firms since the Roman era is the amount of reading required during the due diligence process.
AI is solving this more than 2000-year-old manual labour task and helping lawyers regain their lost time. AI acceptance is reducing staff fatigue and bringing economic benefits to the bottom line.
With law firms evolving their approach to market by offering fixed-priced or capped contracts, these developments allow them to improve their offering and appeal to price-conscious customers.
AI algorithms give you better insights by making sense of data, progressively learning each time you use it to formulate insights that are easily understandable and actionable.
BREAKING DOWN THE FINANCIAL BENEFITS
AI can process complex due diligence data more efficiently than humans do which allows the automation of processes that junior lawyers currently perform manually.
This process is more than simply automating manual tasks, AI continues to get better, faster, and more accurate each day enabling you to make decisions with confidence, faster. When a complicated due diligence report is sorted automatically, legal departments can streamline their workflows and deliver services more efficiently.
AI-powered due diligence technology can lead to a smoother customer experience and fewer mistakes down the line.
According to Forbes, by 2035, AI technologies have the potential to increase productivity by 40% or more.
Predicting the future is always tough, however, one thing seems certain, AI will transform the industry and do it quickly. Law firms that implement it now could see themselves generate long-term momentum and one of the strongest competitive advantages in the future.
AI Is Here, and It Is Here to Stay.
Imprima is the leading data room provider, handling over $1 trillion-worth of transactions in over 160 countries. We have built up a highly impressive customer base of high-profile corporations, financial institutions, and advisors. Our clients rely on us when the stakes are high because we have the most secure, reliable, and easy-to-use data room in the industry.
Our expertise is founded on our 20-year experience with VDRs, as one of the pioneers in the field. The security of business-critical information is in our DNA, and today we apply this to our market-leading data rooms, the Imprima-VDR.
In the coming months, Imprima is releasing a set of AI-powered due diligence tools, that will drive efficiency results not seen before in the industry.