By Amy Spooner
U-M Law
The first thing we do, let's replace all the lawyers with computers.
While even a modern-day Shakespeare might think such a paraphrase is science fiction, the legal profession is grappling with whether or not it could be true someday. Technology is changing our society in immeasurable ways, and the practice of law is no exception.
At a time when law firms face increased pressure to shake up the old business model, technology enables them to be more efficient and more innovative, and to redefine the value that their lawyers provide. Technology also is working to help diminish barriers that keep many from accessing legal services.
When IBM's supercomputer, Watson, went head to hard drive with Jeopardy! megachamp Ken Jennings, it was good theater. But when Watson proved it could perform e-discovery tasks substantially faster than human associates, it raised legal eyebrows. A 2015 ABA Journal story reported that only 20 percent of law firm leaders surveyed believe computers won't replace human practitioners, down from 46 percent in 2011.
So is technology a good thing for the legal profession or a threatening thing? It's a complex and big question.
FROM QUILLS TO KEYBOARDS
Dan Katz, a 2005 graduate of University of Michigan Law School, likens today's legal profession to the finance industry's evolution over the last 50 years.
"People used to go by hunch when picking stocks," he says. "Similarly, the law hasn't been rigorous from a quantitative standpoint. But if you think about what lawyers, especially BigLaw lawyers, are doing, many are solving risk problems, just like finance. And like in finance, the value proposition that humans can bring to legal services is shifting."
Coincidentally, the upheaval of the finance industry sparked the rapid change in the legal profession, Katz says.
"Before the market crashed, you could have an innovation in law, but it was difficult to sell that innovation. Most organizations (clients and firms) weren't interested in changing the delivery-of-services model, or in finding alternative solutions for the problems to which lawyers have been the solution."
As an associate professor at ChicagoKent College of Law and director of its Law Lab, Katz should know. He has been immersed in the legal start-up community for years. Katz is the co-founder and chief strategy officer of LexPredict, a legal analytics consulting and product company that helps lawyers make better decisions using predictive analytics. He also sits on the advisory board for Nextlaw Labs, the legal innovation arm of Dentons.
"Historically, if you were on the partner track, you could follow the formula and it worked out," says Katz. "The legal profession was anomalous, relative to the rest of the economy, in that respect. Now is a much more entrepreneurial time because there are fewer guarantees."
As corporate clients reevaluated their bottom lines after the Great Recession, many questioned the high hourly rates they were paying to law firms for routine work that could be done cheaper and faster using technology platforms. A 2017 study by the McKinsey Global Institute estimated that 23 percent of a lawyer's job can be automated, while a widely publicized study by Dana Remus at the University of North Carolina and Frank Levy at MIT said that using all existing legal technology would reduce lawyers' hours by 13 percent. Others argue that factoring innovations related to people, process, data, and technology together means even greater impact.
Law firms-and their clients-took notice.
"Being a subject matter expert doesn't hold much weight in our rapidly changing world," says Jayne Rizzo Reardon, a 1983 graduate of Michigan Law. "You can't take out your quill and legal pad and think that someone's going to pay you just because you went to law school." Reardon is executive director of the Illinois Supreme Court Commission on Professionalism and a proponent of "futurelaw" thinking. "We must quit throwing sand at each other in the sandbox and realize there are very few of us in this sandbox. The game is being played somewhere else." Under Reardon's leadership, the commission is examining the future of law, including hosting annual conferences on the topic. The 2017 conference had 490 registrants, up from 270 in 2016.
"We are almost past having to set the table with the imperative. Now lawyers are saying, 'I get that we need to think about these issues; help us figure out how,'" she says.
Reardon's career began in different times-before the advent of computers, much less the Internet. Still, "I was struck by the inefficiencies," she says of her high-volume insurance defense practice. "I had 150 cases that fell into a handful of categories. I thought there had to be a systems approach to handling them." Reardon recalls creating form books to share with fellow associates but says efficiency was not a priority for firms then. "The partners clearly conveyed that the more we drew out a dispute, the more money we made."
Two decades later, Adam Ziegler, a 2002 Michigan Law grad, felt similar frustration as a commercial litigator in Boston.
"The more my career progressed, the more I was drawn to questions of efficiency and quality, and the more I saw technology as part of the answer," he says.
Ziegler ultimately left private practice and is managing director of the Harvard Law School Library Innovation Lab. He says his metamorphosis wasn't born in the midst of a 100-hour workweek, surrounded by boxes of files.
"I did high-level advocacy. But every time we appeared in court, both sides ran in place and didn't get to the heart of the issue. I kept thinking, 'I care about what lawyers are known for and committed to, but I think our work can be enhanced in ways that are good for clients, for lawyers, and for justice.'"
There's no question that efficiency now is a priority for firms of all sizes. Client belt-tightening demands it. But Dan Linna, a 2004 Michigan Law grad, says the solution is bigger than technology. Linna is Professor of Law in Residence and the director of LegalRnDThe Center for Legal Services Innovation at Michigan State University College of Law. He also will teach Legal Technology and Innovation as an adjunct professor at Michigan Law during the winter 2018 semester. Linna has created a framework and roadmap for innovation, as well as an index that rates law firms on their development of and openness to outside-the-box approaches.
"We shouldn't just rank firms on revenue. We need to shine a light on those who are innovating. It's good for clients and for lawyers, especially young associates. When you enter practice, you bet your career on the firm you sign with-because you want to make partner there or you want your time there to position you for what comes next. So you want to know that your firm is investing in the future," Linna says.
He stresses that efficiency stems from innovation. "We, as lawyers, need to be able to tell our clients that we are more than a cost on their bottom lines. We're not going to use technology-assisted review to lower the cost of diligence; we're going to use it to do better diligence and more diligence. And we need to show that we're going to help them avoid billion-dollar mistakes."
LET'S RUN THE NUMBERS
"You can't just throw technology at problems and get a solution," says Linna. "You've got to understand processes. You've got to manage projects. You've got to capture metrics and data."
The staggering increase in data has huge implications for lawyers-if they can harness it. According to IBM, 2.5 quintillion bytes of data are created every day, and 90 percent of all data was created within the last two years. Predictive analytics can gauge legal outcomes ranging from the amount of risk in contracts to judges' rulings. Katz, the professor at ChicagoKent College of Law, garnered media attention earlier this year when he and his co-authors published a study showing that their algorithm predicted U.S. Supreme Court decisions from 1816 to 2015 with 70 percent accuracy.
Far from just being a cool party trick, the results have real implications for both litigators and transactional lawyers. According to Katz, data-and technology platforms like his startup, LexPredict, which synthesize it-can help companies "de-lawyer" routine transactions, like some contracts. "Lawyers historically would want to review it a bunch of times because they think their job is to reduce risk to zero. But since business is inherently risky, the businessperson might not want to spend money to have a lawyer make micro changes that don't affect anything. That's only possible, though, if the business has a data model that supports the belief that this isn't a particularly risky contract."
LexPredict's customized software also can perform early case assessment for clients, to give a sense of a claim's worth and potential liabilities. "If I'm 7 percent better at predicting outcomes than my competitor at another law firm, it's not clear that I can win the market because other things like reputation will be factors," says Katz. "So we target places like a corporate legal department that faces all types of claims. They care about 7 percent."
The explosion of data also creates opportunities in legal research, says Ziegler, the managing director at Harvard Law Library's Innovation Lab. "Every time lawyers do analysis or work, everybody should get smarter as a result-whether it's in the context of our own careers, within our firms or corporate legal departments, or just generally across the profession. There are a lot of examples of crowd-sourced collaboration in fields like software engineering and programming, and it's time to bring that to the legal profession." The concept is born in the root of the profession itself, says Ziegler. "The common law system is based on each side presenting a view of the law that reflects well for its client, and a judge considering those inputs and making a decision. Each subsequent case builds on the previous ones, but that iterative nature can take decades and centuries to express itself. I want to combine that with the efficiency of technology so people can share knowledge and analysis quickly."
In 2013, Ziegler launched Mootus, a collaborative platform for legal analysis and knowledge. He and his co-founder built and launched a prototype, went through a start-up incubator, and, as Ziegler says, "We got quite a bit of interest. But from a business standpoint, it wasn't there yet." Ziegler now works with similar ideas at the Harvard Law Library-including an online casebook platform called H2O and the Caselaw Access Project, which is scanning and converting all the court decisions housed at the library into text files, and releasing the files for free online. "It's expensive to access the law. Even when you can afford to access it, you can't use it for big data analytics and large-scale research because so much still is only in books or behind other paywalls," Ziegler says. The Caselaw Access Project is a partnership between Harvard and Ravel, which LexisNexis acquired recently. "Eventually, we'll push the data into the practitioner world and begin to think about many new possibilities, like what might happen when any law firm can create its own custom online library of cases that are annotated by its lawyers," says Ziegler.
LEAN LAWYERING
Getting law firms to heed Linna's call for improved process and project management, and to embrace analytics, can be tough. One barrier is the investment challenge born of ethical rules prohibiting law firms and lawyers from sharing fees with non-lawyers-an issue that Reardon has been exploring at the Illinois Supreme Court Commission on Professionalism.
"The legal profession's regulations don't allow lawyers to form joint ventures with technologists, project managers, or other business professionals, so it can be difficult to harness the expertise to build the systems we need," she says. Reardon recently wrote an article for St. Mary's Law Journal advocating for alternative business structures that would allow lawyers and non-lawyers to enter into business partnerships. Forty-nine percent of practicing attorneys are solo or small-firm practitioners, Reardon notes, and the demographic's income has declined 30 percent in the past 25 years.
"Inefficiencies are costing lawyers their livelihoods," she says. "How do we get around those inefficiencies? We have to bring technology into law firms."
With upper-management's buy-in and the cushion of a bigger revenue base, some large firms have begun making substantial inroads toward disrupting their business model. Among the lead pack has been Seyfarth Shaw LLP, an AmLaw 100 firm based in Chicago. In 2008, the firm launched SeyfarthLean Consulting LLC, a spinoff firm dedicated to helping clients to drive efficiencies in the practice of law and improve performance. Seyfarth Shaw recently received the 2017 Innovative Law Firm of the Year Award from the International Legal Technology Association for two advances in the use of robotics software with SeyfarthLean Consulting: deployment of robotic process automation software in the legal industry for the first time, and development of the "Ask Lee" chatbot for the firm's client collaboration platform. The firm also won the award in 2013.
"Technology has revolutionized my practice," says Julia Sutherland, a 2004 graduate of Michigan Law, a partner in the firm's international department currently working in London. She specializes in international trademark law, handling clearance matters and managing disputes worldwide. Sutherland joined the firm in 2007, just as the global economy began its slide. Seyfarth was led then by J. Stephen Poor, who wanted the firm to rethink its billable-hour model and explore ways to deliver client services more efficiently. Poor championed the rollout of alternative fee arrangements and embraced Six Sigma, a data-driven approach to streamlining processes. Sutherland's intellectual property group was part of the pilot, in part because of its acquisition of groups of lawyers from different firms, each of which had their own methods for handling internal processes such as mail flow and docketing. "Managing mail flow and docketing are crucial to a robust trademark practice," says Sutherland. "Information needs to get to docketing, the correct deadlines need to be entered, and mail needs to go to the attorneys immediately so that they can get ahead of the deadlines. For it to work effectively, everyone needs to be on the same page."
As the only trademark associate in the Chicago office and manager of the Chicago office's trademark docket, Sutherland represented her practice group in the pilot. Seyfarth's implementation of Six Sigma principles to increase its own effectiveness garnered a lot of press, especially given the economic climate. Clients and potential clients asked the firm to help them do likewise. SeyfarthLean Consulting LLC was born, combining the statistical focus of Six Sigma with more conceptual philosophies on waste reduction in a system called Lean Six Sigma.
One of Sutherland's biggest trademark clients, Wolverine Worldwide Inc., hired Seyfarth Shaw because of its application of Lean Six Sigma principles to the management and enforcement of global trademark portfolios. Sutherland and Jay Myers, a trademark partner in Seyfarth's Atlanta office, were part of the team that spoke with Ken Grady, Wolverine Worldwide Inc.'s then general counsel and an outspoken legal futurist, to ink the deal. A big selling point was the technology that Sutherland, Myers, and Seyfarth Shaw's project managers had developed to manage large volumes of trademark clearance, filings, and disputes around the world. They created seven process maps for trademark work, such as filing applications and taking down websites selling counterfeit products. "He loved that we were thinking about these issues and using this technology," says Sutherland of Grady, who later became CEO of SeyfarthLean.
Wolverine Worldwide Inc. became the first large, global trademark client for which Seyfarth customized a portal grounded in Lean Six Sigma principles. The portal, now called SeyfarthLink, allows the client and the firm to monitor deadlines, track projects (including strategic and high-level projects that are not captured by current docketing software), and warehouse data concerning enforcement successes and failures. The portal also consolidates data so that Seyfarth lawyers and paralegals don't have to keep asking clients to provide information for a new matter that the client provided for similar matters previously-a win-win under Seyfarth's fixed-fee structure.
"Under the billable-hour model, attorneys are incentivized to go to clients repeatedly for the same information," says Sutherland, who, with her team, could be handling as many as 220 active matters for Wolverine Worldwide Inc. alone at any given time. "By keeping a document repository-a data room-of everything related to every trademark dispute around the world, a technological solution is addressing a proven pain point for our clients."
For another client, United Health Group Inc. (UHG), Seyfarth developed a clearance intake tool powered by artificial intelligence (AI) to communicate clearly and directly with UHG's lawyers and internal business contacts on the risks associated with 80-some new product and services names that UHG launches, on average, each month. "Under the old system, a lot of paper went along a lot of different touch points. It was ripe for the development of client-facing technology," Sutherland says.
Sutherland, Myers, and the firm's project managers also developed the Watch App, which allows Seyfarth lawyers and their clients to monitor applications for potentially conflicting trademarks around the world and quickly and efficiently make decisions about whether to challenge them. Previously, the firm subscribed to a weekly paper service that listed global trademark filings. The firm scanned the PDF, sent it to clients for review, and clients advised the firm if any filings piqued their interest.
"Ken [Grady, Worldwide's GC] hated this process," says Sutherland. "He wanted something he could view on his iPhone at his kids' soccer practice, something that with the press of a button could start a series of steps. So we built it. Much of our way of thinking involves listening to clients and collaborating with them on technological improvements to reduce their everyday pain points."
Sutherland, Myers, and their team were recognized for their innovative application of technology to the practice of trademark law, including the development of the Watch App, in the Financial Times U.S. Innovative Lawyers Report 2012. Seyfarth also was named as an industry standout-the highest award given by the publication. Sutherland says the rise of artificial intelligence and technology has enabled Seyfarth to further customize tools for clients, including providing access to real-time spend data, and to increase productivity in the organization.
"Technology has freed me to focus on more complex matters," says Sutherland. "Even in a commodity-driven practice like trademark law, there's a huge strategic aspect that is not driven by reducing efficiencies. You're always going to need a lawyer to give a legal opinion."
Ziegler, at Harvard, agrees.
"It might chill the spines of my fellow lawyers, but some activities essential to good lawyering can be done better by computers, and therefore they should be. Lawyers are at their best when they can translate substantive knowledge or situational experience into human terms-when we can provide protection, advice, and peace of mind."
Technology also is making major inroads in litigation practices, including at Goodwin, where David Hobbie, a 1997 Michigan Law graduate, is a director of knowledge management. A former litigator, Hobbie became intrigued in the then nascent field of knowledge management (KM). In 2005, Goodwin hired him as the first full-time litigation knowledge manager in the Boston area, although the firm had dabbled in the field as early as the 1990s.
"They saw legal knowledge management as a key aspect of their competitive advantage and something they needed to do to provide better client service," Hobbie says of Goodwin's leadership, "even in the pre-recession era when the legal market did not provide a huge emphasis on efficiency."
Hobbie's role is crucial to the firm's ability to demonstrate value to clients because he helps litigators access previous work products more efficiently and effectively and organize information about their matters and their people.
"My overall goal is to help attorneys access the collective wisdom of our firm better so that they can practice law better."
With 10 offices and more than 1,000 lawyers, it is impossible for lawyers at a firm like Goodwin to maximize efficiencies on their own, Hobbie says.
"You can't know that many people, and you can't know what everybody is doing, so knowledge management provides tools to help get the right information and connect with the right people. Then we work on tools that enable the attorneys do their work better, which might be a drafting tool, a document assembly program, or an artificial intelligence engine that helps attorneys perform due diligence more effectively, analyze contracts, and so on."
For a firm like Goodwin, whose client roster includes many startups, Hobbie's work-and that of his business-law KM colleagues-also enables lawyers to speak their clients' language more fluently.
"Some of our clients are living and even driving technological changes, and to the extent that we're representing them, we have to understand that so we can bring the best tools to bear to solve their problems," says Hobbie.
In addition to being a constant presence at practice group meetings and training sessions, he seeks endorsements from key leaders.
"I can say it's the greatest tool ever, but that's my job. If the practice leader or the business leader says the same thing, it carries more weight," he says.
Hobbie, who is co-chair of the International Legal Technology Association's 2018 and 2019 ILTACON conferences, also works with Goodwin's practice management and business development/marketing teams to aid in his firm's rainmaking efforts. For instance, through his business intelligence tool Goodwin Litigation Intelligence, an online visualization database recognized by the Financial Times, Goodwin lawyers can identify appearances by the firm in all U.S. courts-searching by type of work, class action, and status-and see the firm's work history and outcome on each case. They then can use the data to convince prospective clients of the firm's ability to meet their needs.
"There are huge opportunities in working with financial and experience data to help us better estimate what the outcome might be and how much it might cost. It allows us to be more transparent with our clients," Hobbie says.
Amid the opportunities, however, Hobbie says another important part of his job is to ensure that the firm's knowledge management path remains on solid ground, instead of just jumping onto the next technological bandwagon.
"I see myself as a buffer and a filter for the changes that are happening in legal technology, and I try to mediate them so that I can provide the best, most relevant services to the attorneys at my firm," he says.
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(Next week, Part II: "Show Me the Money" and "Democratizing the Law.")
