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Daniel Martin Katz Gives Innovation Keynote at ABA Tech Show

Last Friday at the 2018 ABA Tech Show our own Daniel Martin Katz gave the keynote address on Six Vectors of Legal Innovation.

And of course, as always, the place to start was, say it all together now, robots are not replacing lawyers. Rather, humans and computers continue to integrate their strengths in increasingly more productive ways. But technology is only one area of innovation in legal, said Katz. He divided legal innovation into six interrelated realms.

I.    Market Changes

One of the biggest stories in recent news is that the Big Four accounting firms are muscling in to legal services. This is a huge indicator of change, but only one of many. More and more companies are providing services centered around legal tech. Legal process outsourcing (LPO) has become a viable alternative to the old way of doing business.

There are lots of startups in legal tech and in legal services. Not only are the Big Four getting in on the game, but corporations are shifting their legal spend to in-house resources. An oft-overlooked element in the changing legal market, though, is the changing needs and expectations of clients. Clients are now demanding that lawyers use more tech tools and analytics. Along with this, less emphasis is being placed on billable hours, instead favoring process improvement techniques such as legal project management.

II.    Products, Not Just Services

Law firms traditionally provide legal services to their clients. One disadvantage of the law firm model, though, is that profits cannot be shared with any non-lawyers. Increasingly, other legal service providers are employing non-lawyers. This partially explains why a lot of innovation comes from other companies outside the law firm model.

Legal tech innovators are beginning to recognize the great potential of a product-oriented approach. R&D from the likes of the Big Four, all the way down to smaller startups, is paving the way forward for legal innovation while law firms continue to play catch up. For an easy example of these R&D efforts outside of traditional firms, look no further than ContraxSuite.

III.    Process Improvement

We know innovation involves process improvement. Katz used the examples of Lean thinking and the Sig Sigma methodology to help illustrate the advantages of process improvement in firms, in-house departments, and other service providers. And the good news is that process improvement doesn’t have to replace that bespoke, ‘artisanal’ approach to other aspects of legal. Instead, standardization of data processes, workflow methodologies, and software tools can enhance the way an organization functions. A process map, for example, can reduce waste and friction, increase team coordination and communication, and make overall workflow more efficient.

IV.    Artificial Intelligence

Look no further than LexPredict’s products and services for ways providers are changing the game. Organizations can benefit greatly from utilizing AI concepts such as natural language processing, and decision trees for case management. Powerful AI tools are brought to bear everyday in predicting relevant documents (e-discovery); predicting contract terms and outcomes; predicting ‘rogue behavior’ and managing risk; and predicting regulatory outcomes.

V.    Expert Systems

Katz also explained the role expert systems play in legal innovation. Expert systems “encode the rules that govern a decision-making process and turn it into software.” TurboTax is perhaps the most famous example of this. In the legal sphere, Neota Logic is a well-known, highly successful expert system. A2J Author is another example of the power of expert systems to positively impact access to justice for the whole population.

VI.    Intelligent Monetization

Finally, Katz mentioned a more systemic change occurring throughout the tech world. Society, and the market that drives it, has achieved a critical level of complexity. The finance, insurance, regulation, and legal spheres are all converging around the tech that unites them. He stressed that due to the breaking down of barriers separating these professions, education must change to meet new needs. Science, law, mathematics, and everything in between are more interrelated than in previous generations. And technology is both the driver of, and the solution to, the problems that spring from all of this cross-pollination.

 

Katz also emphasized that legal still needs more research (and less marketing) in all of these six areas. A growing number of academic papers are exploring these new ideas, but much remains undone. Machine learning as a service (MLaaS), and the broader open source movement, are changing the landscape as well, with Google, Amazon, IBM, and many others all getting into the action. It’s important to be optimistic about the future. But our work today will determine what that future will look like.

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