Using AI and Blockchain in LegalTech

Blockchain and artificial intelligence (AI) are technology disruptors that people talk about, but few organizations understand the applicability, benefits and risks. While only 8% of respondents to the 2018 Gartner Legal Technology and Analytics Survey are currently using artificial intelligence (AI), 47% plan to use it in the next three years so it becomes important to understand this better. (Murphy, 2019, p. 3) For many companies, deploying AI is slower and more expensive than it might seem. AI is expected to transform the economy by making new products and new business models possible, but that could take longer than hoped or feared. (Bergstein, 2019)

Technological innovation abounds in the legal market, and advancement of emerging technologies continues to accelerate. Thomson Reuters noted a 484% increase in global patents relating to new legal service technology, growing from just 99 patents in 2012 to 579 at year-end 2017. Many of these advancements leverage AI in its various forms. Many involve advanced data and analytics as organizations are able to capture big data and exploit cloud scalability. (Murphy, 2019, p. 6)

 AI is a technology that “learns” from data, language processing, rules, algorithms, etc., and applies this intelligence to solve problems and make decisions. Corporate law departments are embracing AI tools that can reorient unstructured data into a structured template that facilitates user access, thereby generating efficiencies — for example, the creation of repetitive contracts such as non-disclosure agreements.

 Software as a service (or SaaS), built on cloud computing architecture, is a way of delivering applications over the Internet as a service. Instead of installing and maintaining software, you simply access this service via the Internet, freeing yourself from complex software and hardware management. The Legal Cloud Computing Association (LCCA), a consortium of the leading legal cloud computing providers, recently released standards for protecting law firms and client data hosted online. (The Legal Tech Buyer’s Guide, 2019, p. 15)

 What makes the best AI projects stand out is that they allow for solutions that previously would have been impossible to conceive, because they include what seems like human insights but at a volume human could never achieve. AI can be seen as converting such overwhelming information and data flows into granular insights on which AI-driven systems may take automated actions. In some cases, high-tedium and medium-value work, such as searching for all documents about a client organization every time an interaction takes place, will occur more reliably with the automation process's AI-driven improvement. This would be more likely to surface the most relevant documents. (Andrews, 2019)

Source: Current Stages of AI Adoption Strategy, (Andrews, 2019)

Current AI applications in legal departments include mining documents in discovery and due diligence, answering routine questions, sifting data to predict outcomes, and drafting and reviewing contracts. Studies have further confirmed that AI can be both faster and more accurate than experienced corporate lawyers on everyday legal tasks. (The Legal Tech Buyer’s Guide, 2019, p. 9)

Source: Mitratech. n.d.

The use cases for blockchain are extremely narrow right now. Some examples include professional services firm E Y, which has launched a new smart contract and blockchain platform for the insurance sector with a focus on global shipping. This Includes the ability to create and maintain asset data from multiple parties, to link data to policy contracts, and to receive and act upon information that results in a pricing or business change. Insurance giant AXA has also launched self-executing contracts covering flight delays for consumers. (The Legal Tech Buyer’s Guide, 2019, p. 15) A consortium of global law firms recently invested in ReynenCourt, which is building a block chain enabled services automation platform to deploy a range of computing applications without exposing firm or client content to third party cloud environments and allowing for inter-operability.

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