Research Paper

On

Artificial Intelligence in Law

Submitted by –

Malika Bajpai , 01

MBA-Law

SBM, NMIMS
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Abstract

Did you hear the one about the affordable yet efficient human lawyer and its robot counterpart?
One is complete myth and will never happen while the other might be just around the corner thanks
to artificial intelligence (AI).

For a long time, lawyers believed they couldn’t be replaced by machines.

It’s true: the legal industry over the past decade has amassed a graveyard of failed attempts to
innovate and few large exits. It’s also true that legal arguments can be highly case-specific and not
necessarily conducive to automation.

But asking whether individual lawyers can be entirely replaced by machines isn’t asking the right
question. Rather, can one lawyer, augmented by machines, perform the same work that five
lawyers used to do?

Easily. It’s already happening.

When considering the future of AI in the industry, a few things are for sure: First, those that do not
adopt and embrace the change will get left behind in some manner, and second, those that do
embrace AI will ultimately find themselves freed up to do the two things there always seems to be
too little time for: thinking and advising.

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Table of Contents
Sr. No. Particulars Page no.
1. Introduction 4
2. What is AI 5
3. Legal AI in India 6
4. Legal AI Applications 7
5. Due Diligence 8 -14
6. Future Job Market 14
7. Conclusion 15
8. Bibliography 16

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Introduction
Whenever a professional sector faces new technology, questions arise regarding how that
technology will disrupt daily operations and the careers of those who choose that profession. And
lawyers and the legal profession are no exception. Today, artificial intelligence (AI) is beginning
to transform the legal profession in many ways, but in most cases it augments what humans do and
frees them up to take on higher-level tasks such as advising to clients, negotiating deals and
appearing in court.

Technology in the legal industry is 20 years behind every other industry. It’s a conservative group
of people: it is literally the job of lawyers to follow precedent.

For a long time, lawyers believed they couldn’t be replaced by machines.

It’s true: the legal industry over the past decade has amassed a graveyard of failed attempts to
innovate and few large exits. It’s also true that legal arguments can be highly case-specific and not
necessarily conducive to automation.

But asking whether individual lawyers can be entirely replaced by machines is not asking the right
question. Rather, can one lawyer, augmented by machines, perform the same work that five
lawyers used to do?

Easily. It’s already happening.

This all sounds suspiciously like AI-enabled smart software that is taking the drudge work out of
legal research rather than some AI lawyer entity that can work on its own. But is the legal
profession about to smash the loom lest it takes replaces too many people? Should we be telling
students to reconsider a career in law if automation will slowly infiltrate most aspects of the job?

Let us find out .

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What is Artificial Intelligence?

Artificial intelligence mimics certain operations of the human mind and is the term used when
machines are able to complete tasks that typically require human intelligence. The term machine
learning is when computers use rules (algorithms) to analyze data and learn patterns and glean
insights from the data. Artificial intelligence is a large factor shifting the way legal work is done.1

Artificial intelligence and law (AI and law) is a subfield of artificial intelligence (AI) mainly
concerned with applications of AI to legal informatics problems and original research on those
problems. It is also concerned to contribute in the other direction: to export tools and techniques
developed in the context of legal problems to AI in general. For example, theories of legal decision
making, especially models of argumentation, have contributed to knowledge representation and
reasoning; models of social organization based on norms have contributed to multi-agent systems;
reasoning with legal cases has contributed to case-based reasoning; and the need to store and
retrieve large amounts of textual data has resulted in contributions to conceptual information
retrieval and intelligent databases.Today, AI and law embrace a wide range of topics, including:

• Formal models of legal reasoning

• Computational models of argumentation and decision-making
• Computational models of evidential reasoning
• Legal reasoning in multi-agent systems
• Executable models of legislation
• Automatic legal text classification and summarization
• Automated information extraction from legal databases and texts
• Machine learning and data mining for e-discovery and other legal applications
• Conceptual or model-based legal information retrieval
• Lawbots to automate minor and repetitive legal tasks2

1
Bernard Marr , How AI And Machine Learning Are Transforming Law Firms And The Legal Sector , available at :
https://www.forbes.com/sites/bernardmarr/2018/05/23/how-ai-and-machine-learning-are-transforming-law-firms-
and-the-legal-sector/#72a161da32c3
2
Applications of artificial intelligence to legal informatics, available at:
https://en.wikipedia.org/wiki/Applications_of_artificial_intelligence_to_legal_informatics

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Legal AI in India

When Cyril Amarchand Mangaldas (CAM) tied up with Canada based, Kira Systems,earlier
last year to develop customised AI machines programmed for executing legal tasks, it became
the first law firm in the country to publicly announce that it is transitioning to the use of this
cutting edge platform. In simple terms, tedious, time consuming tasks like collecting data,
searching records, going through old cases, fact verification, etc. currently done by junior
lawyers and paralegals will soon be left to AI machines to handle. “AI” will make law firms
more responsive and swifter. We don’t know about others, but we certainly believe in being the
first, and are the first, in embracing AI technology in India. In the West, only a few peer firms
have taken up this challenge. In many ways, we are pioneers, globally,” said Ashok Barat, chief
operating officer of Cyril Amarchand Mangaldas, to India Legal. While Barat may claim to be
the first to use cutting edge AI technology, a few top rung firms like Nishith Desai Associates
already use data management systems. But it is a recent development.
However, developing a dedicated and elaborate platform tailored to understand the
nuances of our legal system and to operate in the Indian environment is surely a first of its kind.3

3
GARETH ICKE, Artificial intelligence: The Bots Come Marching In, available at :
http://www.nishithdesai.com/fileadmin/user_upload/pdfs/NDA%20In%20The%20Media/Quotes/170613_Q_Artifici
al-intelligence_davidicke_12-06-2017.pdf

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Legal AI Applications

The growing interest in applying AI in law is said to be slowly transforming the profession and
closing in on the work of paralegals, legal researchers and litigators. Let us discuss the different
ways in which AI is currently applied in the legal profession and how technology providers are
trying to streamline work processes. AI’s current legal applications can be broken down into the
following categories of applications:

• Helping lawyers perform due diligence and research

• Providing additional insights and “shortcuts” through analytics

• Automating creative processes (including some writing) in legal work

Based on the assessment of the companies and offerings in the legal field, current applications of
AI appear to fall in six major categories:

I. Due diligence – Litigators perform due diligence with the help of AI tools to uncover
background information. This would to include contract review, legal research and
electronic discovery.

II. Prediction technology – An AI software generates results that forecast litigation outcome.

III. Legal analytics – Lawyers can use data points from past case law, win/loss rates and a
judge’s history to be used for trends and patterns.

IV. Document automation – Law firms use software templates to create filled out documents
based on data input.

V. Intellectual property – AI tools guide lawyers in analyzing large IP portfolios and

drawing insights from the content.

VI. Electronic billing – Lawyers’ billable hours are computed automatically.

In this research paper we will focus on the applications that facilitate the due diligence process.

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Due Diligence

One of the primary tasks that lawyers perform on behalf of their clients the confirmation of facts
and figures, and thoroughly assessing a legal situation. This due diligence process is required for
intelligently advising clients on what their options are, and what actions they should take.

While extensive due diligence can positively impact long-term shareholder returns (according to
a study by the City University of London), the process can also be very time-consuming and
tedious. Lawyers need to conduct a comprehensive investigation for meaningful results. As such,
lawyers are also prone to mistakes and inaccuracy when doing spot checks.

1. Kira Systems

Noah Waisberg, a former M&A lawyer who founded the software company Kira
Systems, thinks that due diligence errors by junior lawyers often occur for a number of reasons.
These include working very late at night or on the eve of a weekend, forgetting to perform due
diligence before the end of the work week, and failing to act on it when a deal structure is completely
revised.

He adds, “Many associates are in a certain negative mood about the efficacy of manual due
diligence. Lawyers, being human, get tired and cranky, with unfortunate implications for
voluminous due diligence in M&A.”

Kira Systems asserts that its software is capable of performing a more accurate due diligence
contract review by searching, highlighting, and extracting relevant content for analysis. Other team
members who need to perform multiple reviews of the content can search for the extracted
information with links to the original source using the software. The company claims that its system
can complete the task up to 40 percent faster when using it for the first time, and up to 90 percent
for those with more experience.

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2. Leverton

Leverton, an offshoot of the German Institute for Artificial Intelligence, also uses AI to extract
relevant data, manage documents and compile leases in real estate transactions. The cloud-based
tool is said to be capable of reading contracts at high speeds in 20 languages.

In 2015, IT firm Atos sought the help of real estate firm Colliers International, which used leverton
in performing due diligence of a company that the former was about to acquire. Through the use of
leverton’s AI, information such as payable rent, maintenance costs and expiration dates were
extracted from thousands of documents and then organized on a spreadsheet.

3. eBrevia

However, lawyers can be burdened by reviewing multiple contracts and they may miss important
edits that result to legal issues later on. This is the same problem that Ned Gannon and Adam
Nguyen, co-founders of eBrevia, experienced when they were still working as junior associates.
They built a startup in partnership with Columbia University with the intention of shortening the
document review process.

eBrevia claims to use natural language processing and machine learning to extract relevant textual
data from legal contracts and other documents to guide lawyers in analysis, due diligence and lease
abstraction. A lawyer would have to customize the type of information that need to be extracted
from scanned documents, and the software will then convert it to searchable text. The software will
summarize the extracted documents into a report that can be shared and downloaded in different
formats.

On its website, eBrevia claims that it can analyze more than 50 documents in less than a minute,
10 percent more accurate than a manual review process. The company also offers bespoke
solutions by training its software to customize specific requirements of firms that require thousands
of documents for rapid review. Baker McKenzie rolled out the software in 11 offices in Asia,
Europe and North America in August 2017.

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4. COIN- JP Morgan

Other organizations such as JPMorgan in June 2016 have tapped AI by developing in-house legal
technology tools. JP Morgan claims that their program, named COIN (short for Contract
Intelligence), extracts 150 attributes from 12,000 commercial credit agreements and contracts in
only a few seconds.

This is equivalent to 36,000 hours of legal work by its lawyers and loan officers according to
the company. COIN was developed after the bank noticed an annual average of 12,000 new
wholesale contracts with blatant errors.

5. ThoughtRiver

Other AI industry players include ThoughtRiver, which handles contracts, portfolio reviews and
investigations for improved risk management. Its Fathom Contextual Interpretation Engine was
developed together with machine learning expertsauthorities at Cambridge University.

The company states that it designed the product to automate summaries of high-volume contract
reviews. While users users read content extracts, they can also read the meanings of clauses
provided by the AI. The system is also said to be capable of flagging risky contracts automatically.

6. LawGeex

LawGeex claims that its software validates contracts if they are within predefined policies. If they
fail to meet the standards, then the AI provides suggestions for editing and approval. It does this by
combining machine learning, text analytics, statistical benchmarks and legal knowledge by lawyers
according to the company.

The company also claims that with their tool, law firms can cut costs by 90 percent and reduce
contract review and approval time by 80 percent (though these numbers don’t seem to be coupled
with any case studies). The firm lists Deloitte and Sears among some of its current customers.

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7. Legal Robot

On the other hand, Legal Robot, a San Francisco-based AI company, currently offers Contract
Analytics, its answer to the growing contract review software market. Currently in beta, the
company states that its software is capable of changing legal content into numeric form and raising
issues on the document through machine learning and AI. How the software works states that it
builds a legal language model from thousands of documents. This knowledge is used to score
the contract based on language complexity, legal phrasing and enforceability. With the issues
flagged by the software, it then provides suggestions on improving the contract’s compliance,
consistency and readability by evaluating it on best practices, risk factors and differences in
jurisdiction.

8. Ross Intelligence

Every lawsuit and court case requires diligent legal research. However, the amount of links to open,
cases to read and information to note, can overwhelm lawyers who have limited time doing
research. Lawyers can take advantage of the natural language search capability of the ROSS
Intelligence software by asking questions, and receiving information such as recommended
readings, related case law and secondary resources.

BakerHostetler, in what seemed like a break in tradition, employed ROSS in its bankruptcy
department, 100 years after the law firm’s founding. The law firm’s chairman, Steven Kestner,
explained in an interview that they decided to employ the software to work on 27 terabytes of data.
A Forbes report describes ROSS’ function in the law firm’s operations: “ROSS will be able to
quickly respond to questions after searching through billions of documents.

The company claims that lawyers can ask ROSS questions in plain English such as “what is the
Freedom of Information Act?” and the software will respond with references and citations. Like
most machine learning systems, ROSS purportedly improves with use.

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9. Casetext

On the other hand, Casetext’s CARA claims to allow lawyers to forecast an opposing counsel’s
arguments by finding opinions that were previously used by lawyers. Users can also detect cases
that have been negatively treated and flagged as something that lawyers may deem unreliable.

Casetext claims large law firms such as DLA Piper and Ogletree Deakins as its clients.

10. Everlaw

There has been a growth in the number of e-discovery product manufacturers that harness AI and
machine learning. Everlaw uses its predictive coding feature to create prediction models based on
at least 300 documents that were classified before as relevant or irrelevant by the user.

The AI looks into the contents and metadata and uses such information to classify other documents.
The company claims that the prediction model’s results can help users easily identify which
documents are most relevant. It also recommends actions on the part of the user on how to improve
the software’s predictive accuracy of the model.

11. DISCO

DISCO claims to deliver faster results using its cloud technology for document search on large data
volumes. Similar to Everlaw, it also employs prediction technology to suggest which documents
are most likely to be relevant or irrelevant to the user.

The AI works by assigning scores on tags (on a scale of -100 to +100) in order to improve its
prediction results. The software displays its search results with each document’s score and suggests
which material is most likely useful for the reader.

12. Catalyst

Denver-based Catalyst markets its Automated Redaction product to help lawyers and legal
reviewers remove sensitive and confidential information on documents. “Manual redaction”, as the
company claims, is cumbersome considering the amount of time that a reviewer spends on locating
content on a digital document and then applying black boxes on these statements.
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Their tool allows users to convert a document to digital format and then perform multiple sets of
redactions for a single document by searching for a word or phrase. Users can also set patterns such
as social security numbers on the software to be redacted.

13. Exterro

Exterro’s WhatSun claims to combine the functions of a project management software with the
capabilities of performing e-Discovery. In other words, users can perform their legal research and
then collaborate with others using the software.

According to one of Exterro’s law firm clients, they were able to cut down on redundant workers
from 100 lawyers down to 5 when they started to employ the system. The software was able to
perform the e-Discovery tasks of the lawyers at a 95 percent cost savings according to the law firm.
The company claims AOL, Microsoft, and Target among its marquee customers.

14. Brainspace Discovery

Brainspace Discovery clusters and sorts documents to match closely to a user’s document search.
When finding documents, the AI employs concept search (searching for documents that are similar
in concept but not necessarily in words or phrases), term or phrase extension (instructing the
software to remove terms incorrectly associated with the results), and classification (specifying
another category to refine the search). The company claims that by combining these three features,
the software can better deliver document search results closer to a user’s needs.

Other AI-powered contract review platforms that cater to due diligence for legal professionals
include:

15. iManage’s RAVN whose M&A Due Diligence Robot is designed for M&A documents to
automate the review process and extract data from cluster sets;

16. LitIQ, which capitalizes on computational linguistics technology to reduce contract-related

disputes ;

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17. LegalSifter, which claims to cut time and financial costs through its AI software that looks for
specific concepts in documents such as general terms and conditions and confidentiality
agreements;

18. Seal, whose software is used by Dropbox, PayPal and Experian, was able to reduce the time
spent to 48 hours from 255 days by a utility company by searching for thousands of contracts
with specific clauses; and

19. Luminance, which claims to be the only tool that searches and ranks unusual and anomalous
documents and clauses for lawyers.

While there has been a growth in the use of e-Discovery tools, its application has become a public
issue in states such as California. In 2015, the State Bar released an amended Proposed Formal
Opinion, requiring lawyers to have a decent knowledge on the to use the e-Discovery system or
they will warrant discipline after being proven to have committed intentional or reckless acts. The
State Bar also suggests that if a lawyer is incompetent on the facility, he should learn the skill, hire
someone who’s knowledgeable, or just simply decline representation.4

Future Job Market

Michio Kaku, noted physicist, theorist and futurist once said that the job market in the future will
consist of those activities that robots cannot perform. According to Deloitte, 100,000 legal roles
will be automated by 2036. They report that by 2020 law firms will be faced with a “tipping point”
for a new talent strategy. Now is the time for all law firms to commit to becoming AI-ready by
embracing a growth mindset, set aside the fear of failure and begin to develop internal AI practices.
There are many who believe innovation is the key to transforming the legal profession.

4
Edgar Alan Rayo, AI in Law and Legal Practice – A Comprehensive View of 35 Current Applications, available at :
https://www.techemergence.com/ai-in-law-legal-practice-current-applications/
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Conclusion
Therefore, we can see that Artificial intelligence (AI) is quickly coming into its own in terms of
its use by the legal industry. We are on the cusp of a revolution in the legal profession led by the
adoption of AI throughout the legal industry, but in particular by in-house lawyers. Much like how
email changed the way we do business every day, AI will become ubiquitous – an indispensable
assistant to practically every lawyer. But what is the future of AI in the legal industry? A bigger
question is whether AI will actually replace lawyers, as seems to be implicated above. And if so,
are there ethical or moral dilemmas that should be considered regarding AI and the legal industry?
When considering the future of AI in the industry, a few things are for sure: First, those that do not
adopt and embrace the change will get left behind in some manner, and second, those that do
embrace AI will ultimately find themselves freed up to do the two things there always seems to be
too little time for: thinking and advising.

In conclusion, there are 3 most likely possibilities with the advent of AI in Legal Field;

• Some jobs will be eliminated. Those which involve the sole task of searching documents
or other databases for information and coding that information are most at risk.

• Jobs will be created, including managing and developing AI (legal engineers), writing
algorithms for AI, and reviewing AI-assisted work product (because lawyers can never
concede the final say or the provision of legal advice to AI).

• Most lawyers will be freed from the mundane task of data gathering for the value-added
task of analyzing results, thinking, and advising their clients. These are roles that will
always require the human touch. AI will just be a tool to help lawyers do all of this better,
faster and more cost effectively.

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Bibliography
1. Bernard Marr , How AI And Machine Learning Are Transforming Law Firms And The Legal
Sector , available at : https://www.forbes.com/sites/bernardmarr/2018/05/23/how-ai-and-
machine-learning-are-transforming-law-firms-and-the-legal-sector/#72a161da32c3

2. Applications of artificial intelligence to legal informatics, available at:

https://en.wikipedia.org/wiki/Applications_of_artificial_intelligence_to_legal_informatics

3. GARETH ICKE, Artificial intelligence: The Bots Come Marching In, available at :
http://www.nishithdesai.com/fileadmin/user_upload/pdfs/NDA%20In%20The%20Media/Quotes
/170613_Q_Artificial-intelligence_davidicke_12-06-2017.pdf
4. Edgar Alan Rayo, AI in Law and Legal Practice – A Comprehensive View of 35 Current
Applications, available at : https://www.techemergence.com/ai-in-law-legal-practice-current-
applications/

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