Legal Technologies

Lecture 1
The Future of Legal Services
An Overview of Legal Technologies

Danny Kan
 Today’s topics
1. About this course

2. New technology in a networked environment

3. Mapping how lawyers read and think

4. Automated functions in law

 1
About this course
 Course aims
• Overview of what’s going on and how it affects you as
future lawyers

• Information about the skills that could help you adapt to

the evolving environment

• Provide a view of an opportunity in which you can

become a founder as an alternative career path
 Course content

Art and
design

Math &
Business Stat
TECH
and
LAW finance
Data
science

Linguistics
 Course materials
• Richard Susskind discusses many changes in the legal
profession and is focused on how services will be delivered.

• Kevin Ashley is a lawyer and computer scientist, so he

provides very accurate information about data science.

• Selected articles will be provided on individual topics.

• Stay abreast of the latest market developments by setting

up a Google alert, reading trade publications and examining
the websites of legaltech providers.
 Course assessment
• Coursework is 100% of total mark.

• Topic to be decided mutually by early October.

• Your topic options:

1. White paper – presenting your concept for a start-up; or

2. Data analysis – demonstrating how a legal thinking or writing

activity can be automated.
A white paper: Precision finance

This is outlined in Professor David Donald’s paper on

Precision Finance, linked here.
Data analysis: How case law is overruled
 2
New technologies in a networked environment
 New technologies automate

• Reading – Google search?

• Writing – Lego? AI news reporters? See an example here.

• Predicting – Fortune telling? Weather forecast? Your

recommended Youtube videos?
 Some processes are easier to automate
• Many types of activities in industry sectors have the
technical potential to be automated
• But that potential varies significantly across activities

Source: McKinsey & Company (2016)

 Automation in law

• Digitized information (raw materials)

• Communication networks (pipelines)

• Computational capacity / power (refinery)

“Data is the new oil!”

Stages of automation of legal tasks

Source: Walters (2019), p.37

 Data extractive business models
Conversation in around 2002

• Kevin Kelly: “Larry, I don’t get it. There are so many search companies…Where does
[Google] get you?”
• Larry Page (co-founder of Google): “Oh, we’re really making AI.:
• “Each of the 3 billion queries that Google conducts each day tutors the deep-learning AI over
and over again.” - Kevin Kelly, The Inevitable (2016) pp.36-37

• Each day, we create more data than humanity did during its 5,000 years of existence.
• “Free” services like Google channel our use into training data, as we show computers how to
replace human actors.
 Data and AI

Structured and Process data

unstructured data
using computing
(e.g. historical stock
power and AI
prices, social media
posts, videos, algorithms to
photos) detect patterns
 Legal industry: What is the data? Where is the data?

• Law is information, written or unwritten.

• Since the 1990s, most records, decisions, statutes, rules, regulatory
guidances and commentaries on the same have been made available
digitally.
• Much of this data is proprietary, but the sale and processing of data
has become a major industry.
• Processing this data for every purpose is now an important industry
in many economies.
 Helping machines process the data
• In the 1950s, scholarship took a quantitative turn, so that for 70 years we
have been accumulating data by hand to establish relationships of
correlation and causation.
• Models have been built from the statistical probabilities expressed in this
empirical data and are programmable.
• The programmed models allow computers to process information in
documents (read), construct standard documents (write), and predict
behaviour of decision-makers (understand our inner computer).
• Securities trading led the way in the “quant” revolution, but law
enforcement, financial regulation and the practice of law are following.
Helping machines process the data

Which is a panda?
Which is a koala?
 Helping machines process the data

Source - https://jolt.law.harvard.edu/digest/a-primer-on-using-artificial-intelligence-in-the-legal-profession
 Helping machines process the data

Source - https://pro.bloomberglaw.com/predicting-appellate-outcomes-in-the-5th-circuit/
 3
Mapping how lawyers think
 Educated humans “artificially intelligent”
• “Algorithm” means instruction, or logical sequence.
• The process of becoming a professional means training one’s mind to
think in certain algorithms.
• “Mastery comes after someone practices one skill for 10,000 hours.” -
Malcolm Gladwell and Anders Ericsson
• If the algorithm is complete, it can be used outside the human mind, in a
simpler computer.
• Thus, the more specifically regimented we think, the closer we are to
being automated.

See Behavourial psychology and neuroscience

Contracts vs. Computer programs – similar structure
Structure of a computer program
 Computer programs embed decision logic readable by machines

LOGIC FLOW

Source: https://www.artificiallyintelligentclaire.com/beginner-python-program/
 Contracts embed decision logic readable by humans
• Algorithm is built in contracts and software
applications.
• Contracts are simply a set of logic agreed upon
between two or more people.
 If X happens (e.g. you tender title to your car
to me),
 then Y happens (e.g. I will pay you $300,000).

• Conceptually, software applications are no

different.
 If X happens (e.g. the user presses the return
key),
 then Y happens (e.g. a line break occurs).
 Contracts embed decision logic readable by humans
1. Definitions
“Buyer” means LegalTech Co, Limited, a company incorporated in Hong Kong.
“Seller” means CarOwner Co., Limited, a company incorporated in the Cayman Islands which
holds the legal and beneficial title to the Property.
“Property” means the car with specifications set out in the appendix to this Agreement.
“Consideration” means HK$200,000.
LOGIC FLOW
2. Operative Provisions
2.1 If the test drive to be conducted by the Buyer is successful, then
the Buyer shall purchase the Property and pay to the Seller the
Consideration.
2.2 If the test drive to be conducted by the Buyer fails, then the Buyer
shall have the option to terminate this Agreement immediately or
to conduct another test drive on another day.
 Law is specifically channelled information processing

• Law school (a) passes on information, and (b) conveys legacy techniques for
processing that information.
• Logic, protocol and procedure are all words that law and computer science
share, to say nothing of codification.
• If you can understand the structure of the techniques you have been
taught in law school, you can speak with a data scientist about reproducing
these structures.
• There is strength in data accumulation and sharing, but much legal data is
proprietary; this is a major future issue.
Channelled action / artificial focus support
 Legal knowledge can be broken into smaller building blocks / data points

Source: Morrison & Foerster

Legal reasoning consists of computational inputs and outputs

Source: Ashley (2017), p.19

Humans building expert protocols
 4
Automated functions in law
 Why automate?
• Automation has been used in all fields to reduce transaction costs, primarily
labor costs, and law is no exception.
• Automation can also increase regularity and speed of performance, which is
probably desirable in document review.
• Automation eliminates jobs at the middle of the employment spectrum (see
here), creating more lower-level positions and paying the higher-level positions
more. It also creates a winner-take-all economy.
• Automation has tended to jump during economic downturns. Companies feel
they need to cut costs by slashing jobs and trying out new technologies. (see
Martin Ford, Rise of the Robots: Technology and the Threat of a Jobless Future,
p. 39 (2015))
 The main “legal” activities
• Discovery: Relativity, https://www.relativity.com/ (covered in week 3)

• Due Diligence: Luminance, https://www.luminance.com/ (covered in week 3)

• Contract Assembly: Thomson Reuters Contract Express,

https://legal.thomsonreuters.com/en/products/contract-express (covered in week 4)

• Litigation Planning: Premonition, https://premonition.ai/ (covered in week 6)

Data analytics in legal practice makes one old, wise and large
 Who will you engage as your lawyer?
I am 20,000 PQE! I am 20 PQE!

I’ve reviewed 100,000 share I’ve reviewed 100 share

purchase agreements during purchase agreements throughout
machine learning! my legal career!

My team of lawyers can review

My team of robots can 200 documents in 3 days!
review 200,000 in 3 minutes!

We are more Robots have their limits – they

are just as good as how we
accurate! train them! They are math and
stats with assumptions and
errors! We can offer better
Source: https://fossbytes.com/lawgeex-ai-beats-us-lawyers-nda-high-accuracy/ customer service.
The hive-mind effect for improvement will
rapidly outstrip skill of individual humans

After 244 years, the Encyclopedia

Britannica went out of print in 2012.
 Skills that could help you

• Working in a modern law firm - Basic understanding of data

analytics potential
• Jumping above the machine - More readiness for problem-solving
while facing client
• Mastering theoretical knowledge - Better understanding of logical
steps in making and applying law
• Entrepreneurial - Keep eyes open for new applications and
services that may be automated
The legaltech market is evolving and is still at the beginning
Types of legaltech applications (2020)
 Suggested readings

• Susskind (2017), Tomorrow’s Lawyers, Chapters 1 to 4, 6

• Materials posted on Blackboard