Artificial Intelligence Is Transforming the Legal Industry

The Legal Intelligencer

(by Christian Farmakis)

Artificial intelligence (AI) is adding efficiencies and transforming businesses everywhere, and legal practices are no exception.

General counsels who are hiring lawyers need to understand that this technology is available now, so they can make sure their lawyers are leveraging the latest technology tools. AI can increase speed, increase efficiency and lower costs for clients—if the law firm has the right tools, but more importantly knows how to use those tools.

The following are some of the common questions about advancement of AI technology in the legal space.

•  How is AI technology disrupting the legal industry?

AI is a term generally used to describe computers performing tasks normally viewed as requiring human intellect.

AI legal technology won’t replace lawyers, but these tools will drastically change the way lawyers provide services for their clients. While estimates vary, 23% to 35% of a lawyer’s job could be automated. As a result, lawyers will need to be more strategic and supervisorial, able to act as project managers and supervise the information being fed into systems, and knowledgeable about the assumptions underlying the machine learning algorithms.

So far, projects that classify data have been impacted the most, allowing projects such as e-discovery, due diligence, document management and research to be done faster and more efficiently.

Law firms can already pass these savings on to clients, but this is only the beginning of the transformation. Early law firm adopters are implementing artificial intelligence, machine learning and predictive analytics to legal contract review and document management, enhancing efficiency, intelligence and quality while reducing costs for clients.

For example, with the addition of artificial intelligence software, Babst, Calland, Clements and Zomnir can now deploy highly trained machine learning algorithms in its due diligence process resulting in faster, more intelligent contract or document review for clients. Whether the client has 100 or 100,000 documents for review, we can now rapidly review and identify key provisions within documents and agreements more quickly and accurately than ever before.

•  What will be the next wave of AI legal technology?

The next generation, which is starting to hit the market now, will be document automation and legal research and writing tools, as well as predictive technology tools. For example, a contract can be put through an algorithm in order to identify how risky it is. It could be used to determine how likely it is to go into litigation or if it complies with the company’s internal contract procedures and policies.

Another use is analytic tools that can measure efficiency and pricing of the legal services. E-billing and practice management tools could measure whether a service contract should cost $2,500, not the $7,500 that’s being charged. In other instances, AI could help firms do estimates for alternative fee arrangements.

•  Why is it so important for lawyers to use the right tool for the job?

AI technology is not going away. It’s here to stay, and it’s increasing exponentially. While the AI legal tech revolution is still in its infancy, the tipping point is around the corner. In 2016, the industry spent $8 billion on AI technology; that’s predicted to hit $46 billion by 2020.

However, many of these products are single-tasked products and not integrated tools that can perform multiple tasks. And many of the products’ pricing models do not yet meet the market needs.

While pricing adjustments are already starting to occur and integration should happen over the next five years, AI technology is nothing more than a tool. Just like other technology, purchasing the new tool is only a small part of what needs to happen to gain efficiency and lower prices. The organization has to be behind it, the employees need to know how to use it and the entire project must be managed properly.

For a variety of reasons, companies are demanding access to specialized services, greater efficiency and more insight from outside legal counsel, as well as more innovative resources to stay one step ahead in a time-sensitive, highly competitive marketplace. A state-of-the-art approach, along with a systematic process that applies artificial intelligence technology, provides clients with the latest, flexible solution customized to meet their specific legal and business needs.

Lawyers who have an open mind and an ability to use these new tools effectively are already passing cost efficiencies on to clients, and this should only increase in the future.

Babst Calland and its affiliated alternative legal service provider, Solvaire, is leveraging new AI technology and proven project management processes in its due diligence, discovery and document management projects resulting in faster, more intelligent contract or document review for clients.

Christian A. Farmakis is a shareholder, management committee member and chairman of the board of directors at Babst, Calland, Clements and Zomnir and president of its affiliated alternative legal service provider, Solvaire. If you have questions about the deployment of AI on large diligence, discovery or document management projects, contact Farmakis at 412-394-5642 or

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Reprinted with permission from the January 31, 2020 edition of The Legal Intelligencer  © 2020 ALM Media Properties, LLC. All rights reserved.