QUESTION
Select a legal services technology and describe its impact on the way legal services are provided. Based on your analysis, provide recommendations regarding whether the technology you have chosen should be implemented. This assignment takes the form of a formal LEGAL MEMORANDUM (memo) to a senior professional, for example in a law firm, a government legal team, a community legal centre or general counsel in a corporate context.
The use of the legal technology will be in a context of your choosing.
This written assignment has a maximum of 3,000 words (including all footnotes and references/bibliography).
SOLUTION
________________________________________________________________________________
MEMORANDUM
TO: Senior-Managing Partner
FROM: Legal Associate
SUBJECT: Use of AI powered software for Legal Document Management
DATE: XXXXX
WORDS: 2952 words
________________________________________________________________
I. Executive Summary
The ability of lawyers to understand and employ new legal technology is recognised by NSW Law Society as one of the seven essential skills for the successful practice of law in future.[1] Artificial Intelligence (AI) is one of the technologies which is widely used to mechanise legal services such as document review, legal searches, discovery etc. The objective of this memo is to assist the addressee to arrive at a decision regarding adoption and implementation of an AI powered document management software in the law firm. This memo explores the possibilities and benefits of artificial intelligence in the management of legal documents, addresses the likely challenges to its implementation, and provide recommendations to effectively implement an AI-powered document management software. Various document management software options are also suggested in this memo, along with a strategy to choose and implement the most suitable one.
II. INTRODUCTION
As technological innovation accelerates, the real story for the legal profession is not about doing the same work efficiently; it is about changing legal work altogether. To ensure that the legal profession is ready to provide legal services using current technologies as well as to advance the rule of law and the provision of legal services in the face of the exponential social, commercial, and political disruption anticipated in the ensuing decades, it is essential that lawyers have strong digital capabilities.[2]
What are Legal Technologies?
[1] The Law Society of New South Wales, FLIP Report 2017: The Future of Law and Innovation in the Profession (Law Society of New South Wales, March 2017).
[2] Richard Susskind, Tomorrow’s Lawyers (Oxford University Press, 2nd ed, 2017).
The term legal technologies mean the technology of the practice of law or technology mediated practice.[3] Legal technology, according to Julain Webb, is the use of digital information and communication technologies to enhance decision-making for legal service providers, automate or partially automate legal work processes, and give clients and end users with direct access to legal information and advice.[4]
What is Artificial Intelligence?
Numerous technologies fall under the banner of AI, many of which are pertinent to the automation of law. Though there are many ways to comprehend AI, it can be summed up as ‘a branch of computer science that deals with the simulation of intelligent behaviour in computers’.[5] The various disciplines of AI include machine learning, natural language processing, expert systems, vision, speech recognition, and robotics. Lawyers who don't comprehend computer code can interact with and teach legal technology software to help them with their work owing to a combination of artificial intelligence, machine learning, and natural language processing.[6]
III. Impact of Artificial Intelligence (AI) on Document Management in a Law Firm
In a full-service law firm, where the lawyers deal with lengthy and voluminous documents relating to the complex legal transactions and proceedings, much of the time is spent on managing, indexing, and organising those documents into different categories such as primary and secondary legal materials, advisory documents, papers of court proceedings, correspondences with clients, other lawyers, government departments, bills, invoices, receipts, etc. It is often a tedious task for lawyers to manually skim through large piles of hard copies and locate the required document within a limited time. However, since 1990s, the lawyers, courts, businesses, and government departments have shifted to digital means of communications, transactions and documentations. The digital trend was again accelerated by Covid-19.
[3] The Digital Lawyer, Chapter 5, The Global Lawyer, 124.
[4] Julian S Webb, Legal Technology: The Great Disruption? Melbourne Legal Studies Research Paper Series No. 897, 2020.
[5] The Digital Lawyer, Chapter 5, The Global Lawyer, 124.
[6] Alex Heshmaty, Use of AI in law firms to predict litigation outcomes. Lexis Nexis, 01 February 2022, .
The shift to online correspondences and documentation resulted in reducing the time taken to administer the documents physically and it helped small sized law firms to tackle storage issues. However, merely storing the documents online never mitigated the mundane tasks of analysing the voluminous documents and extracting the relevant data from the same. To tackle this stagnant issue, finally, AI-powered document management software solutions has been introduced in the legal market.
What is AI powered document management system?
A software programme that uses AI technology to automate and streamline the document management process is known as an AI-powered document management system. The system's functionality includes digital document capture, storage, management, organization, and retrieval. Advanced algorithms are used by AI-powered document management systems to analyse documents, extract information, and automate processes.
The features and benefits of AI powered document management system
1. Filing
The AI-powered document management platforms contain the features of creating folders and subfolders, analysing metadata of documents upon arrival, automatically classifying the documents into various categories, and assigning tags and keywords to documents. This will save considerable time spent by the clerks and junior associates in manually allocating the documents to different files.
2. Entity Extraction[7]
The AI technology can scan each document and pick out important information including names, companies, locations, and contact information for individuals.[8] This will assist lawyers to not only extract the data according to the party details but to expeditiously check the conflict issues also. Paul Wyatt opines that it would be “enormously valuable in a busy firm”.[9]
3. Create Linkage Maps
The software can create a map showing the link between the documents upon submission of large volume of documents to the tool. This feature is also called document clustering[10] which enables the users to compare and identify the relationship between the documents.[11]
4. Document search, review, and analysis
There are two kinds of data- structured and unstructured.[12] Structured documents are set up using a template that is well defined. Excel sheets, KYC forms, Insurance certificates are examples. They are easy to sort and analyse. However, unstructured data such as contract documents, invoices, applications, and email correspondences are difficult to define, review and process due to their complex data structure.
[7] Paul Wyatt, How artificial intelligence is streamlining document management, Lawyers Weekly, 26 June 2017,
[9] Ibid.
[10] 5 ways AI in document management benefits hybrid workplaces, KYOCERA Document Solutions, 24 September 2020, .
[11] Ibid.
[12] All about Document AI, Xtract Insights,.
AI-powered software search and retrieves these unstructured data with the help of other features like filing and auto classification mentioned above. Once the document is located, the AI tool can review and analyse the unstructured data by automatically highlighting important information, noting potential problems, and identifying inconsistencies or errors. This will help lawyers to boost the legal research and access to information in daily practice.
5.Time tracking and billing
The AI-integrated system records the amount of time taken to search, review, and analyse the documents stored. Time recording is typically done using a timer or manual entry system which uses machine learning technology of recognising patterns in the processes. Based on the time tracked and recorded, these software solutions create custom templates for invoices and automate the distribution of the same to the clients. This AI solution enables the lawyers to get rid of the tedious task of billing the clients.
6. Enables a Hybrid Style of Working
As the online document management system provides remote access to documents and assist in collaboration, the law firms can effectively introduce a hybrid style of working which draws upon a broader range of lawyers from diverse backgrounds. The flexible work arrangements also enhance the work-life balance of the lawyers working in a law-firm which further contributes to the overall productivity of the firm.
7. Improves Office Efficiency
With the reduction in time spent on manual and repetitive tasks and with better timekeeping and billing arrangements, the legal services can be carried out with improved efficiency. Instead of focusing on routine administrative chores, lawyers can concentrate on higher valued aspects of practice like advising the clients or brainstorming on complex business problems.[13] Adopting a client-focused practice model will result in providing better services and experience for clients. As Thomson Reuters opines, AI will free up lawyers for thinking and advising rather than lagging on taxing manual tasks.[14]
8. Cost Reduction
With the use of an effective AI system, the law firm can minimise the costs of handling and storing the documents physically. Additionally, the costs of manually doing the routine administrative tasks can be reduced. For example, a law firm using manual administration of documents will require a greater number of clerks or juniors to handle the documents. If the same is automated using an AI-powered software, the cost of such manual labour can be reduced.
IV. Challenges in Implementation of AI-powered Legal Documentation
1. Initial Costs
The initial costs of installation of the software system and its integration with the existing system may incur considerable expenses. After the initial setup, there is the price of technical support too. Therefore, it is often considered that AI is not affordable to relatively smaller firms which do not have enough financial resources to implement AI technologies.[15]
2. Complexity of Integration with existing model
Since the law firm has already invested in legal systems which are co-existing with the workflows and are indispensable to the daily administration of works, integrating the AI-powered model with the existing model can be challenging. The issues such as data migration, risk of non-compatibility, user adoption, lack of access to training, threat of data loss, etc. may hinder the effective implementation of the new document management system.
[13] How Law Firms and Legal Teams Are Using Artificial Intelligence And Machine Learning Today, Net Documents, 7 June 2022, .
[14] Ibid.
[15] Lyle Solomon, The Advantages and Disadvantages of AI in Law Firms, Venture Beat, 6 April 2022.
3. Data Privacy Concerns
The kind of data being processed by law firms are highly sensitive and confidential. Furthermore, it is a professional obligation for the Australian lawyers to keep the confidential information of the clients in a secure manner. The use of AI for storing and managing legal documents raised the concerns with respect to compliance with data protection regulations, unauthorized access to confidential information, transparency, etc.
4. Bias and Errors
Every decision-making mechanism is susceptible to mistakes. This holds true for all types of decision-making, including traditional approaches that heavily rely on human involvement, the most advanced AI system, and everything in between. Algorithmic bias is a term commonly used to describe the kind of errors that an AI system makes.[16] This threat of bias and error is a serious challenge to adoption of AI integrated systems.
V. Suggested Solutions for the Challenges of Implementing AI Legal Documentation
1. Cloud based solutions
The high costs of procurement and installation of an AI software can be mitigated by adopting a cloud-based solution which offers zero hardware, software installation, licensing, and staffing costs. The cloud provider administers the hardware and infrastructure and offers flexible subscription-based payment structures which eliminates the need of an upfront software license.
[16] Finn Lattimore et. al., Using artificial intelligence to make decisions: Addressing the problem of algorithmic bias, Australian Human Rights Commission, Technical Paper, 2020.
2. Assessment of Existing Systems
A proper assessment of existing document management system can counter the risk of non-compatibility and complexity of integration. This will also minimize the disruptions in the existing workflows while integrating the new model with the existing one.
4. Encryptions and authentications
Implementing stringent data security measures to ensure the compliance with data protection requirements is of utmost importance while adopting an AI based document management platform. This can be done by introducing encryptions and multiple authentication procedures which prevents unauthorized access and data breaches.
5. Proper Training and Testing
Algorithm bias can be prevented to some extent by giving the software adequate training and by undertaking multiple tests using different sets of data. These exercises will help in identifying bias or errors if any.
VI. Steps involved in Choosing a Suitable AI Software for Legal Document Management
To fulfil the client’s responsibility efficiently and economically or achieve their goal, the lawyers must understand what solutions each technology offers.[17] Therefore, the decision as to which platform is suitable for a law firm is of utmost significance. It is imperative to identify a solution that cater to the needs of the law firm[18] as the legal documents are highly unstructured and voluminous.
[17] Michael Legg, New Skills for New Lawyers: Responding to Technology and Practice Developments, in “The Future of Australian Legal Education”, UNSW Law Research No. 18-51 (Thomson Reuters, 2018) .
[18] Kelly Mills, AI revolutionizing Legal Document Management: What does Legal Practice Management software looks like in 2023! (February 2023), .
The following steps may help in finding an apt platform for the purposes of document management of the law firm.
1. Identify the types of documents to be managed
The first step towards selecting a document management tool is understanding the nature of documents to be managed by such system. This can be done by reviewing the existing document management system or by conducting a document audit in the law firm. The documents can be categorized as contracts, pleadings, and briefs, as well as administrative documents such as emails, invoices, and memos. This can be further grouped based on different practice areas such as litigation, corporate, real estate, or intellectual property law.
2. Determine the features required
All the document management systems will not cater to the needs of a law firm. The decision maker must ensure the availability of various tools such as specialised search tools for litigation documents, data clustering, simplified integration, multi-factor authentication, collaboration tools, data encryption, individualized record retention, strategic management of emails, numbering convention, precedent management, time recording, and role-based access control to ensure confidentiality.
3. Explore various AI legal documentation services providers.
The following table represents various AI solutions which are used by Australian law firms.
|
Sl. No. |
Platform |
Web address |
|
1. |
Legal Practice Management (LEAP) |
https://www.leap.com.au/ |
|
2. |
Open Practice |
https://dyedurham.com.au/solutions/open-practice/ |
|
3. |
Elite3E (Thomson Reuters) |
https://legal.thomsonreuters.com.au/products/elite-3e/ |
|
4. |
Intapp Time |
https://www.intapp.com/intapp-time |
|
5. |
Sharepoint (Microsoft) |
https://www.microsoft.com/en-au/microsoft-365/sharepoint/collaboration |
|
6. |
ByLawyers (precedents) |
https://bylawyers.com.au/ |
|
7. |
Softdocs (includes Lawdocs) (forms and precedents) |
https://softdocs.com.au/ |
|
8. |
iManage |
https://imanage.com/solutions/law-firms/ |
|
9. |
CLASS (Community Legal Assistance Services System) |
https://clcs.org.au/services/class/getting-started/ |
|
10. |
Smokeball |
https://www.smokeball.com.au/ |
|
11. |
Law in Order |
https://www.lawinorder.com.au/ |
|
12. |
Mattero |
https://www.mattero.com.au/ |
|
13. |
eBrief Ready |
https://www.ebriefready.com.au |
3. Proper configuration and optimization
Once the software is identified and installed, it must be correctly configured and optimised to determine if any issues or incompatibilities are related with the same. It must be assessed whether the software serve the purpose for which it was procured and compatible with the existing workflow. The process of optimization is a continued process in which the performance of the software is regularly reviewed and updated.
VII. Conclusion
As per the reports, the Australian legal technology industry is ‘kaleidoscopic’.[19] If applied in regulation, AI can be a real value for lawyers, especially for smaller law firms with fewer staff who lack the resources of large legal firms. By giving information, just like a team member would, AI may support small legal practitioners.
[19] Australian Legal Technology Association, Australia 2020: A Report on the Business of Legal Tech (2020).
However, a solicitor must make choices freely and without interference, so relying too much on AI may impair a lawyer's capacity for autonomous thought and action. Additionally, utilising AI to forecast case outcomes may affect the lawyer's judgement. Similar to how a lawyer must maintain client confidentiality in all cases, machine learning technology may raise privacy concerns. This is because all data will need to be sent to the machine, which could endanger confidentiality.[20] Therefore, the adoption of an AI system does not eliminate the need for the judgement by lawyers, as rightly pointed out by Michael Legg.[21]
[20] John Bui, “Ai in Law Firms Down Under? Australian Law and The Rise of Legal Tech”, Robotics and AI Law Society (18 July 2022) .
[21] Michael Legg and Felicity Bell, "Artificial Intelligence and the Legal Profession: Becoming The AI-Enhanced Lawyer." (2019) 38 (2) The University of Tasmania Law Review 34, 54.
BIBLIOGRAPHY
A. Articles/Books/Reports
5 ways AI in document management benefits hybrid workplaces, Kyocera Document Solutions, 24 September 2020
All about Document AI, Xtract Insights
Australian Legal Technology Association, Australia 2020: A Report on the Business of Legal Tech (2020)
Bui, John, Ai in Law Firms Down Under? Australian Law and The Rise of Legal Tech, Robotics and AI Law Society (18 July 2022) https://blog.ai-laws.org/ai-in-law-firms-down-under-australian-law-and-the-rise-of-legal-tech/?cn-reloaded=1.
Heshmaty, Alex. Use of AI in law firms to predict litigation outcomes. Lexis Nexis, 01 February 2022
How Law Firms and Legal Teams Are Using Artificial Intelligence and Machine Learning Today, Net Documents, 7 June 2022
Lattimore Finn et. al., Using artificial intelligence to make decisions: Addressing the problem of algorithmic bias, Australian Human Rights Commission, Technical Paper, 2020
Legg, Michaek and Felicity Bell, "Artificial Intelligence and the Legal Profession: Becoming The AI-Enhanced Lawyer." (2019) 38 (2) The University of Tasmania Law Review 34
Legg, Michael, New Skills for New Lawyers: Responding to Technology and Practice Developments, in “The Future of Australian Legal Education”, UNSW Law Research No. 18-51 (Thomson Reuters, 2018)
Mills, Kelly, AI revolutionizing Legal Document Management: What does Legal Practice Management software looks like in 2023! (February 2023)
Solomon, Lyle, The Advantages and Disadvantages of AI in Law Firms, Venture Beat, 6 April 2022
Susskind, Richard, Tomorrow’s Lawyers (Oxford University Press, 2nd ed, 2017)
The Law Society of New South Wales, FLIP Report 2017: The Future of Law and Innovation in the Profession (Law Society of New South Wales, March 2017)
Webb, Julian S. Legal Technology: The Great Disruption? Melbourne Legal Studies Research Paper Series No. 897, 2020
Wyatt, Paul, How artificial intelligence is streamlining document management, Lawyers Weekly, 26 June 2017
B. Legislation
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015