Smaller legal outfits must find time to explore technology-driven opportunities
9 May 2017
Artificial intelligence should be seen as a leveller allowing smaller and mid-sized firms to be more efficient and compete with their larger counterparts, technology pioneers have said.
Most legal AI developments tend to be associated with Top-100 firms working on big-ticket deals and with deep enough pockets to invest in technology, but ‘the capability we offer is more of an equaliser rather than something for big firms,’ said Peter Wallqvist, co-founder of RAVN, one of the first applied AI systems companies to have invested in the legal sector.
Set up in 2010, RAVN counts about 70 firms as clients, including BLP, DLA Piper, CMS Cameron McKenna, Howard Kennedy, and Mcfarlanes. ‘We work with large firms because they have the capacity to create groups whose job it is to find out about tech solutions,’ Wallqvist said. ‘That’s not so much the case for smaller firms.’
However, Wallqvist continued, where bigger firms once had the upper hand and could ‘snap their fingers’ to rush in hundreds of paralegals at short notice to review large contracts, small firms could now take advantage of size-neutral technology that can potentially deliver benefits to all lawyers.
‘Robots don’t work better in a big firm than in a small one; it feels like there ought to be an opportunity for small firms to exploit that,’ he said.
Wallqvist was on a Future Lawyer Summit panel last week, which looked at the adoption of AI in legal services and considered the extent to which size mattered in the deployment of technology. With much of the current AI talk focusing on the obvious benefits for large-scale contract review, how would the technology be relevant for small firms dealing with humble leasehold documents, asked a member of the audience.
‘Return on investment is obvious if you deploy the system across a huge transaction, but you can use it with just two documents, that’s a minimum to get started,’ Wallqvist responded. But the challenge for small firms, he continued, was to find the time to consider it, rather than using it.
Legal tech consultant and Artificial Lawyer editor Richard Tromans, who chaired the panel, said technology other than document analysis was available for smaller firms to readily embrace. One example was ROSS, which conducts AI-driven legal research, and can make a difference for small firms.
Tromans said one two-partner firm he knew of in Florida was using ROSS in this way, ‘for work that would require two or three paralegals whom they couldn’t otherwise afford’. ‘But what smaller firms keep saying,’ he went on, ‘is that they don’t have the time or staff to go out and test systems, because everyone’s engaged in billable work that takes up everybody’s time. It’s not that small firms can’t do it, but they have to find the time and commitment.’
Cost may at one time have been an issue but most AI systems now came with pricing options within the reach of smaller firms too, according to another panellist, Luminance chief operating officer Donna Opzoomer. The company, which has backing from Slaughter and May, provides due diligence software which is available as pay-as-you-go via the cloud, with firms paying for the content they upload on Luminance’s data room.
RAVN offers similar options, allowing clients to buy a set amount of processing as an alternative to an ongoing contract.
Solicitor-turned-tech-entrepreneur Chrissie Lightfoot also pointed to European law firms, which tended to be much smaller than their City counterparts but vied for the same work and were embracing AI. ‘These firms are classed as medium sized but they are in the same league as City firms, and they want to compete and be smart about their business model.’
Regardless of size, firms are also becoming equal in respect of another key feature: pricing. More and more clients are now looking for prices that reflect value and are less happy with the basic billable hour approach.
‘Clients are becoming aware of AI and they know which firms are using it,’ Lightfoot commented. And it’s the firms that are open about it that will secure clients, especially when pitching for tenders, she added. ‘All firms get asked how they would do things differently. The successful ones are those that can say they will get the time down and put the lawyers on the strategic level that clients need support with. That’s what moving from billable hour to value-to-client means.’
This story was first published on Solicitors Journal on 9 May 2017 and is reproduced by kind permission