Why law firms must embrace ‘the cloud’ to realise the value of AI and other new technology

Law firms across all segments of the market claim to view technology as a key enabler for creating differentiation and driving profitability.

However, leadership in the same firms continue to express significant frustration that their ever increasing technology spend is not delivering the promised business value.  It may be true that infrastructure and core systems are more stable, reliable and performant than they were ten years ago but where is the true innovation?  Why do so many firms still have the same long lists of projects that have repeatedly failed to deliver?

It is clear that technologies able to support the increased business demands of the legal sector are available.  Some have been developed specifically for the legal industry, while many have been proven by other types of business but are now being recognised as offering significant value to law firms.

Along with most of the industries main strategic commentators, Richard Susskind highlights the transformational role that artificial intelligence (AI) will play in law firms.  In his new book, The Future of Professions, he suggests that technology and specifically AI will have a fundamental impact on the legal industry and the role of lawyers in the future.  The book explains how increasingly “‘capable systems’ – from telepresence to AI – will bring fundamental change in the way that the ‘practical expertise’ of specialists is made available in society”.

One technology that is currently receiving a significant amount of interest under the artificial intelligence banner is RAVN ACE (Applied Cognitive Engine).  RAVN ACE is an information processing platform that has the ability to perform tasks that demand cognitive computing functions and machine learning. In essence it can derive structure from unstructured data in an intelligent way.  It can then be configured to perform specific business processes that in the past has been performed manually i.e. “routine cognitive” tasks like reviews and audits on massive data sets.

RAVN have a number of examples where the use of their technology has delivered dramatic efficiencies.  One matter involving contract law was predicted to take about six months for two junior lawyers to bulk review about 20,000 employment contracts.  Using RAVN ACE that review process actually took about one week providing more accurate results than manual tests achieved.  Another law firm has stated that their ACE driven process now in place is about 10 million times faster than the manual property title deed review process it replaced.   More amusingly, a top 10 firm performing  a “bake-off” to compare their current review process (outsourcing using an LPO) to RAVN ACE, must have realised they were dealing with something transformational when RAVN completed the whole process before the LPO had actually signed the order to begin the work!

Going forward RAVN expect ACE is to become an ingrained part of the daily business for law firms and corporations. Within legal, the technology has mainly been applied to specific transactions and matters, but the firms that are able to look further forward are aiming to construct their entire business processes around ACE and streamlining many of the most arduous aspects of their practices.

So the technology is available, the demand is there and the most respected commentators continue to predict that fundamental change will occur.  So why is this change so slow to happen?

So the technology is available, the demand is there and the most respected commentators continue to predict that fundamental change will occur. So why is this change so slow to happen?

There is a huge dichotomy between the typical law firm IT Director struggling to ‘keep the lights on’, commissioning more and more storage as the demand for data grows exponentially while under pressure to justify spend by managing partners determined to get better value for money, and industry commentators predicting an imminent shift in the role of lawyers driven by the adoption of AI, cognitive computing and other new technologies.

Neither position in isolation is wrong.  Law firms must have reliable and secure infrastructures on which to run their personal productivity and business applications, while it is clear that new technologies like RAVN ACE must be exploited in order to develop the industry and meet the demands of law firm clients.  So how do we bridge the gap and shift the focus of IT departments ‘180 degrees’, away from being internally focused, to one that is market facing constantly seeking to add business value through technology, while still maintaining reliable and secure IT infrastructures.

Firstly, recognising the capability of technology is only half the story, “lawyers could be replaced by robots” is an unhelpful headline – it simply reduces the debate to a series of ‘soundbites’.  Secondly, it has to be understood that IT budgets are finite and throwing money at the issue isn’t desirable or sustainable.

For most firms the investment in technology infrastructure is a continuous process, often with large-scale re-investments every 3-5 years.  This has a number of consequences:

  • unless drastic action is taken the trend of operational IT costs only go one way – up
  • the cost of IT investment is fixed, and doesn’t flex as the firm changes shape

As a result law firm IT departments typically spend their time focusing on keeping the lights on, with around 80% of spend and 85% of resources concentrated in operational activities. This means that only 15% – 20% of the focus of an IT function is directed towards activities that will exploit technology to generate business value.  This is a fundamental reason why law firms struggle to achieve real innovation through technology.

Cloud based IT services offer the opportunity for IT departments to fundamentally change the above model and shift the focus of their teams to where their firms want it to be – finding ways for IT to make their lawyers more productive.   By adopting a cloud approach and accepting that infrastructure is commodity and can be delivered as a utility, more IT resources can be allocated to creating business value, understanding business need, and aligning IT to legal requirements.  Instead of being experts in servers, operating systems, storage and email, the IT department can become experts in the way lawyers need and want to work.