Marc Andreessen quipped in 2011: “Software is eating the world”.
The legal profession is not immune from this development. Law has a high information component. In a large sense, law is information or as Bill Palin, the young lawyer who won the ABA’s Legal Hackathon at last year’s ABA Annual Meeting, says, Law is Code.
We are already seeing how Andreesen’s prediction is working its way through the legal profession.
If you want to learn more about an impending tsunami of legal disruption read John O. McGinnis and Russell G. Pearces’ law review article in Fordham Law Review, titled, The Great Disruption: How Machine Intelligence Will Transform the Role of Lawyers in the Delivery of Legal Services.
Predictive coding continues to make inroads in eDiscovery demonstrating that software analysis is more accurate and faster that hordes of associate lawyers clicking on documents on screens. Companies such as Recommind are leading the way.
New Smart Legal Software Applications from Legal Start-Ups
A group of new companies enable intelligent analysis of contracts and what I call “Smart” contract management. Here is a list of some of these disrupters:
LegalRobot– Artificial Intelligence for Legal DocumentsDiligen – Automated Legal Due DiligenceBeagle – Graphic Contract Analysis
LawGeex– A.I. Contract Review
ContractCatch– Intelligent Review of Agreements and Contracts
I would predict that application of forms of artificial intelligence will become the foundation for many legal software applications, increasing lawyer productivity or reducing employment of associates in large law firms, depending on your perspective.
The Latent Legal Market for Legal Services
On the other end of the legal spectrum from Big Law, there is about a $40 billion latent market for consumer legal services yet to be served by lawyers.
In 2013, two-thirds (66%) of a random sample of adults in a middle-sized American city reported experiencing at least one of 12 categories of civil justice situations in the previous 18 months. The most commonly reported kinds of situations involved bread and butter issues with far-reaching impacts: problems with employment, money (finances, government benefits, and debts), insurance, and housing.
Most consumers handle these problems on their own, or do nothing. Moderate income people rarely seek assistance from lawyers to deal with these legal problems. Either legal fees are too high or they do not understand their problems to be legal. 80% of the U.S. consuming public can’t afford legal fees. This is the often discussed Justice Gap in America was the focus of the ABA Presidential Commission on the Future of Legal Services. [See Final report Here ].
Figuring out ways to have more lawyers serve this latent market at affordable prices has proved to be a challenge. Scalable solutions must be software solutions.
There is ample evidence that software alone can solve the legal problems of everyday consumers. Last year 600,000 users assembled legal documents and resolved their problems without lawyer assistance in over 40 states with the support of the U.S. Legal Services Corporation through Law Help Interactive and legal services programs in those states.
This number will continue to increase. Private legal software companies, such as ShakeLaw, RocketLawyer, and our own SmartLegalForms continue to eat away at the market and the market share of solos and small law firms.
Defining the Practice of Law
The reaction of the organized bar to software as a solution to people’s legal problems may be reactionary.
I often hear lawyers say these solutions are inferior. I recently attended an American Bar Association School on UPL and participated in a panel on UPL and new technology. I argued that since the legal profession wasn’t serving 80% of consumers anyway so we should continue to experiment with legal software solutions. There was push back from this group, with some participants arguing that automated legal advice could be the unauthorized practice of law. I argued that in the interest of access to justice we should have a safe harbor that encourages legal software development for consumers, if there were sufficient warnings to the consumer they were not dealing with a lawyer, but a software application.
One state, Texas, has famously passed such an exception to their definition of the practice of law which reads:
‘In this chapter, the “practice of law” does not include the design, creation, publication, distribution, display, or sale, including publication, distribution, display, or sale by means of an Internet web site, of written materials, books, forms, computer software, or similar products if the products clearly and conspicuously state that the products are not a substitute for the advice of an attorney.’
I pitched to this group of UPL officials the idea I would like to see this exception to the definition of the practice of adopted in every state. My rationale is that it would remove a potential barrier to innovation and encourage the development of Internet-based software applications that could help close the Justice Gap. The response was underwhelming.
Heads in the Sand
Despite these constraints, legal software will continue to eat away at the lawyer’s market share. Where there is demand, entrepreneurs will find a way. IBM’s Watson has demonstrated that it could beat the two world Jeopardy champions- not a trivial matter.
Lawyers who deny the power of these software applications to solve legal problems, and the exponential rate of change, have their heads in the sand,