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7 Applications of AI in Law Industry

  • Mallika Rangaiah
  • Jul 10, 2020
  • Updated on: Jun 23, 2021
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The law is the force that ensures that there remain propriety and decorum in our society. There’s definitely no portion of the business world that hasn't been influenced by the law. From selling to purchasing, mergers, acquisitions, partnerships, and so on everything involves a legally determined contract. 


There’s no scope for any sort of progress or innovation in the absence of a solid structure of intellectual property law. In each of our operations, the legal system lurks in the background, as a constant foreboding force.


Being such an immensely powerful sector, the legal field is definitely not exempt from the power of technology now paving its way steadily across all its areas. The advancement of technology in the law field has definitely led to an evolution in the operations of legal professionals.


As legal operations become increasingly automated, this has propelled legal professionals such as lawyers and paralegals to acquire proficiency in operations such as word processing, telecommunications, presenting data, and so on.


Law technology has touched every part of the legal field, be it law firms and corporate practices to courtroom operations and handling of documents. Advancing technologies like artificial intelligence and big data enable modern software to go through legal documents, simplify communications as well as discover suitable casework for law professionals. 


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McKinsey has estimated that around 23% of the work executed by lawyers can be automated through existing technology. 



AI in the Law Field


Artificial intelligence has paved its way across all professional sectors, effectively revolutionizing its operations. Along with overtaking paperwork and handling of data, it is also aiding the industry towards becoming more consumer-centric. 


Apart from the operations which still continue to rely on experience and judgment, the remaining operations are slowly being overpowered by technology. According to Deloitte, “Over 100,000 jobs in the legal sector have a high chance of being automated in the next twenty years” 


Artificial intelligence (AI) has been paving its way towards emerging as the backbone factor in the legal profession. In various scenarios, this technology is adopting algorithms as well as machine learning to execute the services that were formerly carried out by entry-level lawyers since both the field of law and Machine Learning technology seek the aid of historical instances to ascertain rules for applying to new scenarios. 


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Applications of AI in the Law Field


Within the Law Field, a couple of aspects have been highlighted that prove to be promising for the application of Artificial Intelligence. There has also presently been some progress in this direction. 


The image shows the applications for AI in the Law Sector, namely contract review, contract analytics, litigation prediction, legal research, predictive coding, chatbots/lawyer bots and accelerate due diligence

Applications of AI in the Law Sector 


1. Contract Review


Contracts serve as the backbone of our economic structure, they are indispensable for any business transaction. However, the whole procedure of mediating and yet the process of negotiating and settling a contract is a dreary hassle. 


The lawyers from both parties are required to manually inspect, refine, and swap red-lined documents in a repetitive manner. This procedure can prove to be tedious, leading to deferment of deals and a hindrance in accomplishing the company’s business goals. In addition, it also has the possibility of mistakes, with the crucial stress on minute details and the long length of the documents.  


This whole stretched process provides huge potential for automation. For instance, various startups including Lawgeex, Klarity, and Clearlaw have been making headway towards achieving this. These firms have been creating AI systems that can automatically absorb proposed contracts, examine them properly by adopting natural language processing (NLP) technology, and decide which aspects of the contract are agreeable and which of them pose an issue. 


Presently these systems have been developed with the idea of keeping a human involved in overseeing and reviewing AI’s examination and making the final verdicts. Yet this can definitely change in the future as these technologies advance further with AI programs being involved in the full process from start to the finish. Various extensive businesses such as eBay, SalesForce, and Home Depot have started employing contract review services that are powered by AI in daily lives


“These solutions are helping legal teams offload the mundane aspects of reviewing and redlining contracts so that they can focus on more high-impact work. AI technology will ultimately broaden the lawyer’s role from a narrow focus on risk mitigation to more strategic engagement on company initiatives.” - Lawgeex CEO Noory Bechor.



2. Contract Analytics


Post the signing of the contract, overseeing and supervising it can prove to be a pain.  Especially in the case of big firms that have extensive pending contracts and a wide number of counterparties across various divisions. 


Various NLP-powered solutions have started being developed which derive and appraise crucial data across a firm’s core of contracts, simplifying the firm’s business commitment nature for its stakeholders. Examples of firms developing these platforms are Seal Software as well as Kira Systems


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These technologies will enable sales departments to flawlessly stay updated on when contracts are ready to be renewed, allowing them to seek an edge on revenues and promote opportunities. It will also allow procurement departments to keep track of current agreement details, enabling them to remediate if required. 


Meanwhile, finance departments can ensure they are always prepared for mergers and acquisitions M&A and regulatory departments can cultivate an extensive outlook on a firm’s operations for the purpose of compliance.



3. Litigation Prediction


Various AI teams have started developing machine learning models for predicting the results of imminent cases by taking into account the factual pattern of the case as well as the bulk of relevant paradigms. Various law firms and businesses have started adopting these models to properly prepare their litigation approaches, speed up settlement negotiations as well as reduce the number of cases that get required to be forwarded to trial. 


For instance, Blue J Legal is one startup that is creating a legal prediction engine, powered by Artificial Intelligence, with a starting fixation on tax law.



4. Legal research


The large online legal data resources like LexisNexis as well as Practical Law have regularly been enhancing their search algorithms to aid lawyers in discovering appropriate case-related material. Additionally, a couple of AI tools even aid lawyers in forming a case approach on the basis of former results in likewise cases such as Lex Machina



5. Predictive coding


This is an advanced aspect of AI that has presently been roped in the legal industry. This supplies a review that is assisted by technology to aid in speeding up the procedure of e-disclosure.


The Predictive coding software is a search algorithm that practices classifying according to the document’s relevance on the basis of the former training session in which the algorithm is adjusted by the lawyer. The software is then used on a wide number of documents to conclude which one of them is most appropriate for the aim of the disclosure.  



6. Chatbots / Lawyer bots


Bots can prove to be highly effective in offering legal help and in providing the masses with easy access to services.  A lawyer bot is basically software that has the capacity of carrying out automated tasks which generally get performed by lawyers. These bots are useful for boosting the speed of the work and in offering an enhanced experience by enabling the clients to self-serve themselves online.


A couple of the best Lawyer Bots include DoNotPayAutomio,and BillyBot


Aside from this purpose AI chatbots are also effective in predicting case outcomes, preparing the documents swiftly through automation, formulating the invoices for clients, as well as for a range of other tasks. 



7. Accelerate due diligence


Uncovering background information through the due diligence process is another time-consuming process that legal practitioners spend their time on. The AI-powered platforms can assist in accelerating the process and in cutting down time. 


Acceleration of the due diligence process would have a considerable impact since it would aid in verifying current figures as well as facts from the prior cases. The due diligence procedure is generally a hassle for humans and AI would play a massive role in boosting the accuracy. 





“AI is a tool. Having a better tool doesn’t mean we’re going to have fewer people doing an ever-increasing amount of work,” said Lillquist. “Enabled by technology, lawyers are more productive, allowing more legal matters to be represented around the world.” - Lane Lillquist, the co-founder and CTO of legal tech company InCloudCounsel


While Artificial Intelligence in the legal industry has garnered a lot of focus and spotlight the technology still remains in the initial stage giving it the scope to invite both opportunities as well as challenges. 


The large size of the legal market gives a compelling opportunity for value generation. With technologies like artificial intelligence and NLP, constantly advancing, they have the potential of unleashing significant opportunities to revolutionize and rejuvenate the law industry in the near future.

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