AI in the legal profession is a hot topic. Corporate law departments are increasingly adopting new AI-powered tools in their daily work to “do more with less”, while clients are using a variety of self-service solutions automating the ‘boring’ work such as contract drafting and review. The traditional legal profession, where legal services were monopolized by law firms, has evolved into an open marketplace where the initiative to streamline legal work is often taken by software companies while old-school law firms, which still constitute the majority, are struggling to adapt to this new status quo.
To outline the trajectory AI is moving along in the legal services market, we invited Fredrik Svärd for an interview. Fredrik is the founder of LegalTech.Se, well-known LegalTech observer, pioneer in the legal technology journalism, and influencer in the legal startup community. He is also ELTA:s ambassador in Sweden and secretary-general at the Swedish Data Protection Forum.
– If you compare the pace of change in LegalTech now with what it was like a couple of years ago, is there a significant difference?
– I would say so, yes. At least in smaller jurisdictions such as Sweden. There’s been a dramatic shift in awareness and interest among Swedish lawyers the past 12-24 months. Many law firms have invested in AI systems, our conferences and meetups are well attended and new startups are founded and funded. More mainstream publications have started covering the development.
– Where most legal AI startups come from? Are there many in the Nordics, in Sweden?
– Law firms MAQS and Lindahl are working on an AI project with IBM and VQ. Other than that, many seem to choose suppliers such as Luminance or Kira that have built momentum in their respective home markets and now are targeting smaller markets. AI can be used for more than document automation of course. Clocktimizer, a dutch startup, is a great example. Trademarknow in Finland is another.
– In your view, in what areas legal AI will become the most useful?
– It seems legal tech has become almost synonymous with doc review/automation and e-discovery. That’s what the hype has been about, mainly. Now it’s shifting towards blockchain applications. Hype aside, I think predictions based on big data and machine learning will be huge in legal. I think courts could make great use of AI, and that we’ll see more and more AI-based tools aimed at consumers. AI can be used to create chatbots, to interpret contracts and other documents and to discover anomalies in various situations.
– What do you think will boost the adoption of AI by law firms and corporate counsel?
– Economic realities and client behaviour. US and UK firms have been stagnant for a long time now, and buyers are finally starting to put pressure on firms. They are also outsourcing and insourcing legal work. I think the legal ops movement has real potential. I don’t have a good guess as to why in house depts have been slow to adopt tech, but it seems more and more tools are developed specifically for them.
I also think AI tools need to mature a bit. When they become user friendly enough, it will be easier to actually implement them in the workflow. Many have bought systems, but I’m not sure to which extent they’re actually being put to use.
– Recently Amazon, Berkshire Hathaway and JP Morgan teamed up to build their own healthcare company. Do you think we could expect something similar in the legal services market?
– That crossed my mind too. I wouldn’t rule it out. The market for “alternative providers” is growing steadily, and we’ve seen big companies such as Google and IBM dipping their toes in the business of law before. I also expect already big legal tech “startups” such as LegalZoom to target the Nordic market in the near future. In the longer term, I expect the biggest providers of legal services to be other entities than traditional law firms.
– It is a great pleasure to speak with you, Fredrik, as always. It’s fantastic that you are joining us as a judge at the Global Legal Hackathon!
– Thank you for the invitation. We live in exciting times, and I follow Synch’s work in the legal tech area with great interest.