AI Will Transform The Field Of Law
The law touches every corner of the business world. Virtually everything that companies do—sales, purchases, partnerships, mergers, reorganizations—they do via legally enforceable contracts. Innovation would grind to a halt without a well-developed body of intellectual property law. Day to day, whether we recognize it or not, each of us operates against the backdrop of our legal regime and the implicit possibility of litigation.
At close to $1T globally, the legal services market is one of the largest in the world. At the same time, it remains profoundly underdigitized. For better or worse, the field of law is tradition-bound and notoriously slow to adopt new technologies and tools.
Expect this to change in the years ahead. More than any technology before it, artificial intelligence will transform the practice of law in dramatic ways. Indeed, this process is already underway.
The law is in many ways particularly conducive to the application of AI and machine learning. Machine learning and law operate according to strikingly similar principles: they both look to historical examples in order to infer rules to apply to new situations.
Among the social sciences, law may come the closest to a system of formal logic. To oversimplify, legal rulings involve setting forth axioms derived from precedent, applying those axioms to the particular facts at hand, and reaching a conclusion accordingly. This logic-oriented methodology is exactly the type of activity to which machine intelligence can fruitfully be applied.
Within the field of law, a few areas stand out as particularly promising for the application of AI. Exciting progress is already being made in each of these areas.
Contracts are the lifeblood of our economic system; business transactions cannot get done without them. Yet the process of negotiating and finalizing a contract is today painfully tedious.
Each side’s lawyers must manually review, edit and exchange red-lined documents in seemingly endless iterations. The process can be lengthy, delaying deals and impeding companies’ business objectives. Mistakes due to human error are common—no surprise given that attention to minutiae is essential and contracts can be thousands of pages long.
There is a massive opportunity to automate this process. Startups including Lawgeex, Klarity, Clearlaw and LexCheck are currently working toward this vision. These companies are developing AI systems that can automatically ingest proposed contracts, analyze them in full using natural language processing (NLP) technology, and determine which portions of the contract are acceptable and which are problematic.
“We believe legal professionals should be able to leverage large datasets to make more informed decisions in the same way that marketing and sales professionals have been doing for years,” said Clearlaw CEO Jordan Ritenour.
For now, these systems are designed to operate with a human in the loop: that is, a human lawyer reviews the AI’s analysis and makes final decisions as to contract language. But as NLP capabilities advance, it is not hard to imagine a future in which the entire process is carried out end-to-end by AI programs that are empowered, within preprogrammed parameters, to hammer out agreements.
While this may sound futuristic, large businesses like Salesforce, Home Depot and eBay are already using AI-powered contract review services in their day-to-day operations. Expect adoption to go mainstream before long.
“These solutions are helping legal teams offload the mundane aspects of reviewing and redlining contracts so that they can focus on more high-impact work,” said Lawgeex CEO Noory Bechor. “AI technology will ultimately broaden the lawyer’s role from a narrow focus on risk mitigation to more strategic engagement on company initiatives.”
Negotiating and signing a contract is only the beginning.
