(Jul 8) What happened in Legaltech last week?
Generative AI redefines legal tech, with law firms embracing document automation, enhanced legal education, and AI-driven tools. Leadership shifts and regulatory changes also highlight industry transformation.
Welcome to your Law Tech weekly briefing covering what happened in legal tech last week.
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Key Stories
This past week has seen significant discourse regarding the integration of Generative AI (GAI) in the legal profession. The prevailing sentiment reveals a complex blend of optimism and caution. The article "Generative AI Risk in Legal Research: Is the Fault in the Technology or in Ourselves? Answer is Both" highlights the dual-edged nature of GAI in legal research. It underscores the importance of traditional legal research skills alongside GAI to mitigate risks like hallucinated cases. This positions enhanced legal research education as a critical step forward (Generative AI Risk in Legal Research: Is the Fault in the Technology or in Ourselves? Answer is Both - Dewey B Strategic).
In tandem, the role of document automation (DocAuto) amidst growing GenAI adoption is discussed by James Quinn. DocAuto ensures consistency with templates, while LLMs offer creative solutions when such templates fall short, pointing to a synergistic potential when these technologies are combined (Is There a Role For DocAuto In The Age of GenAI? - Artificial Lawyer). However, apprehension remains high, particularly in smaller firms, with a Thomson Reuters study revealing 77% of global professionals viewing GenAI as a threat to job security and unauthorized law practice. Only 14% of lawyers use GenAI, highlighting a stark divide in adoption rates between larger and smaller firms (Thomson Reuters Study: Plenty of Lawyers Still Fear GenAI - Artificial Lawyer). Meanwhile, a push to reframe "non-billable hours" to "investment time" aims to better acknowledge essential, albeit non-revenue generating activities, potentially improving morale and recognizing their vital contributions to firm success (There's no such thing as non-billable hours - Jordan Furlong).
All Other Stories
Beyond the key discussions on GAI, the landscape of legal technology continues to evolve at a brisk pace. The American Arbitration Association's strategic acquisition of ODR.com underscores a commitment to making alternative dispute resolution more accessible and cost-effective using AI tools (The American Arbitration Association: Strategy and Acquisitions - Legal IT Insider). Centari's innovative use of GAI to structure unstructured data for transactional law showcases the potential for AI in marketing, negotiation, and precedent searches (Knowledge Is Power + Firms Have The Data, It’s Just Unstructured - Artificial Lawyer). The necessity for standardized benchmarks for legal GenAI tools is also being addressed, with the LITIG group spearheading initiatives to promote transparency and consistency in this space (Why We Need Standards For Legal GenAI - Artificial Lawyer).
Legal technology partnerships and AI integrations are increasingly prevalent, signaled by Syncly's collaboration with Thomson Reuters to enhance data integration and compliance solutions (Syncly joins forces with Thomson Reuters in partnership to watch - Legal IT Insider), and Bird & Bird's trial of AI legal tech from Swedish startup Leya, anticipated to revolutionize legal tasks and processes (Bird & Bird kicks off Leya POC after firmwide upskilling programme - Legal IT Insider). Hebbia's foray into the legal sector, leveraging its Matrix feature for document analysis, highlights the sector's growth potential through advanced AI applications (Hebbia’s Plan to Target the Legal Sector – The AL Interview - Artificial Lawyer). Furthermore, the role of AI in legal education is increasingly evident, despite mixed survey responses on its integration in law schools (Recent Reports of Law Schools’ AI Adoption Have Been Greatly Exaggerated - LawSites).
Additionally, initiatives like Latham & Watkins' OpenContracts and Wordsmith's $5 million funding highlight the growing interest and investment in AI-driven legal solutions designed to improve efficiency and accessibility in legal practice (Latham’s Scrudato Creates OpenContracts – Open-Source Doc AI Tool - Artificial Lawyer, Wordsmith Raises $5 Million to Empower Lawyers to Scale Themselves with AI - Legal Tech Blog). The convergence of AI with Information Governance (IG) is also underscored as a significant trend, suggesting transformative impacts on compliance and operational efficiency (The power of convergence: Harnessing AI and IG for legal excellence – Part II - Legal Technology News). In summary, the legal tech ecosystem is rapidly embracing AI and automation, bringing about innovative advancements and strategic shifts aimed at improving efficiency, compliance, and overall practice management.
Links and summaries
Want to explore a story more deeply? Here are the original links to the stories, with summaries to aid review.
Key stories
The introduction of Generative AI to the legal field has exposed significant gaps in legal research education. The Schwartz case highlighted the dangers of AI-reliant briefs featuring fictitious citations, emphasizing the need for robust legal research skills to interpret and contextualize sources. Criticisms of generative AI products from Stanford’s HAI study further underscore these concerns. The legal profession must reconcile AI technology with traditional research methodologies to maintain high standards of accuracy and reliability. Law firms should prioritize legal research education, leveraging resources like law librarians and updated training protocols. This integration of technology and rigorous research training could mitigate AI-related risks and improve adoption rates.
Is There a Role For DocAuto In The Age of GenAI? (Artificial Lawyer)
The intersection of document automation and Large Language Models (LLMs) in legal tech presents a promising synergy rather than a competitive landscape, as elucidated by James Quinn, CEO of Clarilis. Document automation, with its adherence to templates and consistency, offers reliability in producing error-free legal drafts. However, its dependence on pre-existing templates can be limiting. LLMs, like GPT-4, bring creative flexibility to drafting, producing initial content that can spark further refinement by expert lawyers. The fusion of these technologies could leverage LLMs to fill template gaps or generate innovative clauses which, after review, enhance automated templates. Thus, a hybrid approach integrating the best attributes of both can significantly optimize legal document preparation, balancing innovation and reliability.
Thomson Reuters Study: Plenty of Lawyers Still Fear GenAI (Artificial Lawyer)
The Thomson Reuters study highlights significant apprehensions about generative AI (genAI) within the legal profession, with 77% of respondents viewing it as a threat to unauthorized legal practices and 42% fearing its impact on firm revenues. Despite advancements and positive messaging about genAI, only 14% of surveyed lawyers currently use it, and 40% have no plans to adopt the technology. Concerns about job security persist, with 59% seeing genAI as a threat. The cautious approach is more prevalent among smaller firms, which often rely on open-source models like ChatGPT for occasional legal needs. This underscores the heterogeneous nature of the legal market and indicates that Bar organizations must better educate and reassure legal professionals about the benefits of genAI.
There's no such thing as non-billable hours (Jordan Furlong)
The critique of the term "non-billable hours" underscores a critical issue within legal practice: the undervaluation of essential but indirect activities that contribute to a firm's success. By categorizing tasks such as business development, administration, and training as "non-billable," firms perpetuate a harmful hierarchy that devalues these contributions and diminishes lawyer morale. Reframing these efforts as "investment time" acknowledges their crucial role in sustaining and growing the firm’s business. This shift in terminology can enhance both the mental and emotional engagement of lawyers, ultimately fostering a more supportive and productive work environment. As legal technology advances, especially with the rise of Generative AI, the industry is moving towards models not purely based on billable hours, making this terminology overhaul even more pertinent.
All the rest
The American Arbitration Association: Strategy and Acquisitions (Legal IT Insider)
The American Arbitration Association acquired ODR.com to boost its online dispute resolution services. This move aims to make alternative dispute resolution more accessible and cost-effective with AI tools. AAA plans further expansion through development, licensing, and additional acquisitions.
Centari, a US legal tech startup, uses generative AI to help transactional lawyers with marketing, negotiation, and precedent searches. Co-founded by Kevin Walker and Bryan Gilbert Davis, the platform structures unstructured data for various uses. With $1.7 million in pre-Seed funding, Centari aims to develop a comprehensive transactional law platform and explore tools for contract negotiation.
Why We Need Standards For Legal GenAI (Artificial Lawyer)
The article highlights the need for standardized benchmarks and transparency in assessing generative AI tools in the legal industry. The LITIG group, backed by Artificial Lawyer and Legal IT Insider, is launching a project to address these issues. Potential solutions range from informal talks to establishing a regulatory body.
The Sedona Conference Names Longtime Deputy Director Ken Withers As Executive Director (LawSites)
The Sedona Conference has named Kenneth J. Withers as its new executive director after Craig W. Weinlein's passing. Withers, previously the deputy executive director, will serve a two-year term to ensure a smooth transition. His goal is to uphold the organization's mission and ready it for future leadership.
Syncly joins forces with Thomson Reuters in partnership to watch (Legal IT Insider)
Syncly has teamed up with Thomson Reuters to integrate HighQ with document management systems and Microsoft 365. Led by former HighQ executives, Syncly offers seamless data integration and compliance solutions. This partnership aims to enhance legal tech and improve data governance for law firms.
Bird & Bird kicks off Leya POC after firmwide upskilling programme (Legal IT Insider)
Bird & Bird is trialing AI legal tech from Swedish startup Leya to automate tasks in its UK, Germany, Spain, and Nordic offices. The six-month proof of concept will evaluate Leya's capabilities. Leya, founded in 2023, recently raised $10.5 million and appointed Jakub Makowski as head of UK operations.
Screens Doc Review Marketplace Launches AI-Powered ‘Boosts’ (Artificial Lawyer)
Screens, a contract AI platform, has introduced 'Boosts', custom AI functions for automating contract review in Microsoft Word. These features include redrafting, summarizing, and negotiating contract text. Founder Otto Hanson states that Boosts aim to make contract review more intuitive and efficient for legal professionals.
Bird & Bird To Run Major POC With AI Startup Leya (Artificial Lawyer)
Bird & Bird is running a six-month trial with AI legal tech startup Leya to automate legal tasks and improve processes. The trial involves 20% of the firm's fee-earners and aims to enhance client value and upskill staff. Leya, which recently raised $10.5 million in a Seed round, seeks to refine its AI tools for legal applications through this partnership.
Hebbia’s Plan to Target the Legal Sector – The AL Interview (Artificial Lawyer)
Hebbia, a genAI document analysis startup, is expanding into the legal market. The company’s Matrix feature enables efficient comparison and data extraction from complex documents. With new Head of Legal Ryan Samii, Hebbia aims to leverage its technology for legal applications and expects significant growth.
Recent Reports of Law Schools’ AI Adoption Have Been Greatly Exaggerated (LawSites)
A recent ABA survey found that 55% of responding law schools offer AI classes, but only 29 out of 200 schools replied. This low response rate makes the findings unreliable as a measure of AI integration. However, the survey indicates a growing trend of AI incorporation in legal education.
Law.com Radar now employs SALI Alliance's standardized taxonomy to tag new civil filings from over 2,400 U.S. courts. This enhances search precision and custom alerts using a proprietary machine learning model for consistent case-type labeling. ALM's adoption of SALI establishes it as the industry standard for legal data classification.
The article discusses the integration of Information Governance (IG) and Artificial Intelligence (AI) in law firms. It highlights challenges such as resistance to change, data silos, and regulatory compliance, and suggests strategies to address them. The piece underscores that AI technologies, like Machine Learning and Natural Language Processing, can enhance IG, leading to more efficient and compliant law firm operations.
Bird & Bird is starting a six-month trial with the AI platform Leya across its international offices. The trial aims to automate tasks like analyzing laws, drafting contracts, and reviewing documents to optimize legal processes and enhance client value. This initiative includes a customized training program and aligns with Bird & Bird's broader AI strategy in legal services.
Smith, Gambrell & Russell LLP has selected iManage Cloud to support its cloud-first strategy and improve collaboration and security. The firm will leverage iManage's AI-powered tools and Microsoft 365 integration. SGR aims to complete the migration with Harbor's assistance and go live by early 2025.
ABS back on track in Scotland (The Time Blawg)
The Law Society of Scotland's AGM backed Alternative Business Structures (ABS) despite opposition. President Susan Murray stressed the importance of strong regulation to manage ABS-related risks. Uncertainty persists about needed changes to the Regulation of Legal Services (Scotland) Bill and the timeline for ABS implementation.
Robin AI hires Microsoft principal research manager as VP of AI (Legal IT Insider)
Robin AI has appointed Carina Negreanu as VP of AI, leveraging her experience from Microsoft. She will lead research and development to align machine learning and generative AI with company goals. This hire is part of a broader trend of senior appointments aimed at enhancing product development in the legal sector.
Professor Richard Susskind has been named Special Envoy for Justice and AI to assist 56 Commonwealth nations in achieving equal access to justice by 2030. He will evaluate current technology use in these countries and believes AI is key to addressing justice challenges. This initiative aligns with UN Sustainable Development Goal 16.
Latham’s Scrudato Creates OpenContracts – Open-Source Doc AI Tool (Artificial Lawyer)
John Scrudato, Director of AI at Latham & Watkins, developed OpenContracts, a free, open-source AI tool for legal document analysis. It utilizes LlamaIndex for efficient querying and data extraction. Key features include document management, automatic vector embeddings, and a human annotation interface.
Meet CompetitionAI, Created By Clifford Chance Lawyer Daniel Schwarz (Artificial Lawyer)
CompetitionAI, launched in November 2023 by Daniel Schwarz and AI engineers Jonathan Halpern and Andrew Davidson, is an AI-driven tool for competition lawyers. It quickly searches and generates answers from thousands of pages of competition authority guidance across multiple jurisdictions. The startup has attracted over 600 sign-ups and is currently fundraising to expand its team.
The Italian Legal Tech Scene: Where Tradition Meets Innovation (Artificial Lawyer)
Italy's legal tech scene is emerging but still in its early stages, with fewer than 100 startups and modest revenue. Adoption is slow due to the complexity of the civil law system, language barriers, financial constraints, and traditionalist views. However, growing interest in AI and digital transformation indicates a promising future.
UK law firms are prioritizing business continuity over cyber security amid rapid Legal Tech evolution and staff pressures. An e2e-assure report highlights that 77% of firms faced cyber attacks and 69% have underperforming security teams. The report urges immediate action and collaboration with providers to mitigate risks and enhance resilience.
What The Euros Can Teach Us About Building Winning Legal Teams (Artificial Lawyer)
The article compares building a successful football team to forming an effective legal team, emphasizing strategic talent selection and deployment. It highlights the necessity of balancing data-driven decisions with the human touch in both fields. The author is optimistic about the future, stressing the importance of diversity and mentorship in developing future leaders.
The article outlines the "rule of thirds" for attorney compensation, allocating one-third of revenue to payroll, overhead, and profit each. It classifies attorneys into Grinders, Minders, and Finders, recommending tailored compensation based on their roles. The main point is to balance individual motivations with firm profitability, ensuring the owner's profit remains sustainable.
Wordsmith Raises $5 Million to Empower Lawyers to Scale Themselves with AI (Legal Tech Blog)
Wordsmith, an AI legal assistant platform, raised $5 million to boost efficiency for legal professionals. The platform automates routine tasks, integrates with existing systems, and maintains high security standards. The funding will expand the team and broaden market reach.
