Oct 13, 2020

The Case for AI in Legal Tech

By Ardy Taylor • ,

Whether we’re ready for it or not, artificial intelligence (AI) is definitely taking over more and more of the to-dos in the business world. AI offers an invaluable way to streamline and automate repetitious, tedious tasks that would otherwise require lots of man hours — saving organizations time and money. But what is the future of AI technology when it comes to the legal industry?

39% of in-house counsel expect that AI will be commonplace in legal work within 10 years. But some concerns remain. A big question is whether AI will actually replace lawyers. And if so, are there ethical or moral dilemmas that should be considered?

Machine learning contract analysis software, KIRA Systems recently published this infographic article, weighing out a range of concerns of AI technology in Legal, and explains why the benefits outweigh the risk. Here are some key takeaways:

1. AI augments, but does not replace the work of a lawyer

For instance, in the time it takes for a human to edit an image and identify and label it, an AI algorithm can classify a million images.

But the fact remains that AI can’t think abstractly or apply common sense as humans can. Tasks that involve strategy, creativity and persuasion like advising clients, writing briefs, negotiating deals and appearing in court are still beyond the reach of computerization. In other words, AI can fill the gaps where Human Intelligence falls short — but it will not replace it.

2. The growing prevalence of AI will create jobs in place of what it will eliminate

There are valid concerns that AI-powered software is likely to endanger jobs that involve labor-intensive, routine work that can be automated. This includes jobs that heavily involve document searches, storage and review, as well as contract analysis, such as paralegal or freelance document review attorneys. 

For instance, Outlaw uses AI-powered Optical Character Recognition (OCR) to streamline legacy contract migration — the traditionally tedious process of migrating old, executed paper contracts onto a digital contract database. Typically, in order to make paper contracts digitally accessible and searchable in a contract system, a team of migration specialists is needed to convert scanned PDFs to text based agreements using normal OCR technology. Manpower is then needed to manually fine-comb through each document after, to ensure accuracy of the conversion. Outlaw’s native AI-powered OCR cuts all these human hours (and potential human errors) by converting uploaded image-based contract PDFs into text automatically and instantly. So while AI eliminates this portion of human intervention, it also saves hundreds of hours and potentially tens of thousands of dollars to carry out a legacy contract migration project. 

Even more fortunately, AI will also create jobs in place of what it will eliminate. This includes those developing AI (legal engineers), legal operators managing algorithms for AI, and counsel reviewing AI-assisted work. 

3. Lack of transparency and understanding regarding the inner workings of AI algorithms remains an issue

Duties of competence and diligence mean that if lawyers rely on AI and other technologies to serve their clients, they must be sure to understand how the technologies work in order to establish ethical compliance. David Curle, Legal Analyst at Thomson Reuters explains:

“If lawyers are using tools that might suggest answers to legal questions, they need to understand the capabilities and limitations of the tools, and they must consider the risks and benefits of those answers in the context of the specific case they are working on.”

David Curle, Legal Analyst at Thomson Reuters

But when it comes to AI, one of the most notable issues is the ‘black box’. When a lawyer submits a query to an AI tool, it goes into a ‘black box’ before presenting an outcome. Since lawyers are not advanced technologists, it can be difficult to understand what goes on in the ‘black box’, (i.e. how the AI tool processes data to reach an outcome). In addition, third-party providers of AI software often keep the details of their algorithms confidential due to legitimate concerns like intellectual property issues, further limiting lawyers from understanding the tool.

However, there are moves in the data community for “ethical” black boxes, and innovative frameworks for algorithmic transparency are gaining adoption. Despite the changes, the issue remains for legal professionals when wielding the AI sword. They must ask themselves where AI use is justified in their legal playbook and where the lack of transparency will prove to be a detriment.

4. Potential bias in AI technologies create unfair results, but there are ways to prevent it

AI requires data to work — data that is fed by humans. Correspondingly, if the data used to train the AI contains biases, the outcomes determined by the AI would also be skewed.

Luckily, there are ways to combat this. This include:

  1. Improving diversity in AI technology programs and professions
  2. Training data scientists and AI trainers to recognize and correct for bias
  3. Avoiding inputting sensitive personal identifiers such as race and gender into AI systems and
  4. Conducting regular reviews to ensure algorithmic accountability

The below infographic summarizes the above-mentioned points:

can-ai-be-problematic-in-th-legal-sector-embed (1).jpg
Source: Kira Systems


Incorporating a complex, advanced tool such as AI into day-to-day legal operations can feel foreign and uncomfortable. Especially when AI adoption also raises concerns such as ethical issues, as well as the impacts of potential bias in the system. 

However, there’s no denying that AI helps lawyers do more with less. In addition to helping them automate much of the rote, monotonous work, it also helps improve legal service delivery and enables legal teams to stay competitive.

That’s why legal tech adoption is ever accelerating — with investments in the space reaching $178 million in Q2 of this year alone. 

What matters then, is not whether or not legal professionals should adopt AI-powered technology in their work, but how they should be yielding this double-edged sword. Awareness about the potential issues, as well as responsibility in usage is key to taking legal service delivery to the next level, where AI is part of its world. 

Written by Ardy Taylor

More about Outlaw

Voted G2’s #1 Momentum Leader for contract management, Outlaw provides pioneering end-to-end contracting solutions for the fastest growing companies such as Intrado, BeyondPricing, and Democracy International. From dynamic template-based generation through in-app negotiation, lifecycle management and reporting, Outlaw automates and customizes contract workflows helping companies reach agreement faster. Outlaw has been recognized as a legal technology leader in 2020 by the National Law Journal.

In 2021, Outlaw joined Filevine’s legal tech platform to radically improve the future of legal work. Together, Filevine and Outlaw become the first and only end-to-end solution to dynamically link documents, contracts, and databases with their surrounding business processes, resulting in easier workflow customizations, instant automations, and better collaboration.

More information can be found at getoutlaw.com and filevine.com.

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