Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

{Law, Tech, Design, Delivery} Observations Regarding Innovation in the Legal Industry - Professor Daniel Martin Katz

202,024 views

Published on

{Law, Tech, Design, Delivery} Observations Regarding Innovation in the Legal Industry - Professor Daniel Martin Katz

  • Nice !! Download 100 % Free Ebooks, PPts, Study Notes, Novels, etc @ https://www.ThesisScientist.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Hello! Get Your Professional Job-Winning Resume Here - Check our website! https://vk.cc/818RFv
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Nice !! Download 100 % Free Ebooks, PPts, Study Notes, Novels, etc @ https://www.ThesisScientist.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Finally i found something that changed my life, if you need to change yours just watch the video here http://bit.ly/changesvideo Hope it helps you as it helped me!
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Nice !! Download 100 % Free Ebooks, PPts, Study Notes, Novels, etc @ https://www.ThesisScientist.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here

{Law, Tech, Design, Delivery} Observations Regarding Innovation in the Legal Industry - Professor Daniel Martin Katz

  1. law+tech+design+delivery by daniel martin katz edu | illinois tech - chicago kent college of law blog | ComputationalLegalStudies.com corp | LexPredict.com observations regarding innovation in the legal industry page | DanielMartinKatz.com
  2. #legalinnovation
  3. three faces of innovation in legal
  4. (1) lawyers for innovators / entrepreneurs
  5. what many lawyers and law schools think of as “Innovation Law" (1) lawyers for innovators / entrepreneurs
  6. (2) lawyers as innovators - substance
  7. poison pill - “the most important innovation in corporate law since Samuel Calvin Tate Dodd invented the trust for John D. Rockefeller and Standard Oil in 1879” (2) lawyers as innovators - substance
  8. emerging areas - 3D Printing, Driverless Cars, Augmented Reality, Data Breach, Crypto/Blockchain, Future of Work, Big Data+Privacy, etc. Drones, Internet of Things, CyberSecurity, (2) lawyers as innovators - substance
  9. (3) lawyers as innovators - business/process
  10. innovation directed toward transforming the practice of law (3) lawyers as innovators - business/process
  11. today I want to talk about emerging innovations on this third face lawyers as innovators substance business/process
  12. Four Pillars of Innovation in Law
  13. {Law + Tech + Design TM + Delivery}
  14. {Law Substantive Legal Expertise + Tech + Design TM + Delivery}
  15. {Law Substantive Legal Expertise Analytics Platform AI Computing KM + Tech + Design TM + Delivery}
  16. {Law Substantive Legal Expertise Analytics Platform AI Computing KM Process Improvement User Experience Design Thinking Project Mgmt + Tech + Design TM + Delivery}
  17. {Law Substantive Legal Expertise Analytics Platform AI Computing KM Process Improvement User Experience Design Thinking Project Mgmt Business Models Regulation Marketing + Tech + Design TM + Delivery}
  18. labor arbitrage process/tech arbitrage regulatory arbitrage a.i. / predictive analytics the flavors of arbitrage
  19. At the outset, I should note there are several distinct markets for legal services
  20. Enterprise Law Small and Medium Enterprises Retail Government Criminal five legal sub-sectors
  21. Enterprise Law Small and Medium Enterprises Retail Government Criminal five legal sub-sectors
  22. My Friend Bill Henderson ... has some basic data on these markets
  23. Enterprise Law statistics via Bill Henderson Entities with (>50+Million) Fortune 1000 other large entities
  24. Enterprise Law statistics via Bill Henderson Size of Market $150 billion Number of Potential Clients 40,000
  25. Small/Medium Enterprises statistics via Bill Henderson Size of Market $60 billion Number of Potential Clients 6 million
  26. Retail / Main Street statistics via Bill Henderson Number of Potential Clients 318 million Size of Market $75 billion (with huge potential upside)
  27. observation 1
  28. What is the hallmark of the bespoke legal work?
  29. Complexity
  30. Social, Economic and Political Complexity
  31. Which for our purposes manifests in legal complexity
  32. In the face of ever growing legal complexity we have applied greater and greater numbers of human experts to solve the underlying problem
  33. Lawyer as Complexity Engineer
  34. complexity keeps growing ...
  35. and so has total expenditures on legal services
  36. Legal Expenditures as a function of GDP (some disagreement between these plots but they project a similar trend)
  37. Cobb Douglas is the traditional way to describe a production function
  38. LaborCapital Cobb Douglas is the traditional way to describe a production function
  39. LaborCapital Cobb Douglas is the traditional way to describe a production function historically we have turned this dial
  40. ~1984 - 2009 Returns to Legal Experts (Big Law)
  41. ~1984 - 2009 ~2009 - Present Returns to Legal Experts (Big Law)
  42. ~1984 - Present Returns to Legal Experts (Retail)
  43. ~1984 - 2009 ~2009 - Future Returns to Legal Technology (Capital)
  44. Legal is a mature market
  45. and in mature markets efficiency trumps growth
  46. What does the change in the return structure imply?
  47. Far greater returns in process improvement substitution of capital for labor
  48. observation 2
  49. What is one major historic barrier to legal innovation?
  50. Client Sophistication
  51. The Sophisticated General Counsel
  52. Although many of pieces were already in place ...
  53. The Financial Crisis Placed Significant Pressure on GC’s
  54. To Control Their Legal Spend
  55. Legal was brought in line with the Other C Level Officers/Divisions
  56. “I am not running your training program ...”
  57. (i.e. Don’t Put 1st and 2nd Year Associates on our work)
  58. “If you want our work - you are going to work with other providers”
  59. The General Counsel as Legal Supply Chain Manager
  60. Blended Teams of Providers Law Firm + E-Discovery Firm + Legal Process Outsourcing + Law Division Insourcing + Software/Analytics Firm
  61. Legal Supply Chain Mgmt. Data and Logistics = General Counsels as the Maestros
  62. Client Sophistication is Critical to this Story ...
  63. Client Sophistication has reset historic relationships ...
  64. observation 3
  65. all of the above is a necessary precondition for legal entrepreneurs
  66. Lex.Startup is beginning to take hold
  67. 15 2009 Lex.Startup
  68. 15 2009 Lex.Startup
  69. 15 500+ 2009 2015 Law or Legal Related Companies as highlighted by Josh Kubicki @ ReInventLaw London 2013 Lex.Startup
  70. The VC Community Is Turning to Legal
  71. and investing real money
  72. R e p o r t e d s a l e price between $35 million and $40 million. Final Number was likely between $80 - $100 million A n u m b e r o f venture capitalists have invested in t h e c o m p a n y , including Silicon Valley’s Sequoia C a p i t a l w h i c h invested $7 million in 2007 ....
  73. And There is Lots More in this Space ...
  74. So what are these folks doing?
  75. R + D Function in the Legal Industry
  76. observation 4
  77. the path of legal(tech) has in part followed developments in artificial intelligence
  78. data driven AI rules based AI Competing Orientations in Artificial Intelligence
  79. expert systems Computational Law Data Driven Rules Based prediction models and methods network analytic methods natural language processing self executing law visual law computable codes
  80. we see a decent amount of rules based AI in legal industry
  81. that is actually pretty consistent with path of A.I. in general
  82. lots of issues with expert systems and/or rules based A.I. (without data or an evolutionary dynamic)
  83. rules based A.I. data driven A.I. 1980’s, 1990’s, Early 2000’s >
  84. rules based A.I. data driven A.I. 1980’s, 1990’s, Early 2000’s rules based A.I. data driven A.I. 2005 - Present < >
  85. rules based A.I. data driven A.I. 1980’s, 1990’s, Early 2000’s rules based A.I. data driven A.I. 2005 - Present < > as usual law lags other sectors of the economy
  86. A.I. State of the Art
  87. A.I. State of the Art purely data centric
  88. A.I. State of the Art purely data centric augment expert forecasts w/ data
  89. iterative data < > rules A.I. State of the Art purely data centric augment expert forecasts w/ data
  90. The Rise of Quantitative Legal Prediction
  91. Quantitative Legal Prediction
  92. Data Driven Law Practice
  93. Is starting to gain steam ...
  94. implication is that every organization in legal needs a data strategy
  95. Every organization needs relevant human capital (and in law such human capital is in limited supply)
  96. Quantitative Methods for Lawyers Professor Daniel Martin Katz
  97. Legal Analytics Professor Daniel Martin Katz Professor Michael J Bommarito II
  98. legalanalyticscourse.com free course material! (more coming soon)
  99. Some Examples
  100. 2011 The Age of Quantitative Legal Prediction
  101. 2011 The Age of Quantitative Legal Prediction
  102. 2011 The Age of Quantitative Legal Prediction
  103. 2012 The Age of Quantitative Legal Prediction
  104. 2012
  105. 2013 The Age of Quantitative Legal Prediction
  106. Quantitative Legal Prediction - or - How I Learned to Stop Worrying and Start Preparing for the Data Driven Future of the Legal Services Industry Daniel Martin Katz Assistant Professor of Law Michigan State University 2013
  107. 2013 The Age of Quantitative Legal Prediction
  108. 2013
  109. 2013
  110. 2013
  111. 2013
  112. 2014
  113. 2014
  114. 2014
  115. 2014
  116. Some Commercial Examples
  117. Predictive Coding in E-Discovery
  118. https://lexmachina.com/
  119. “The software identifies standard and terms in contracts, and its benchmarking tools show lawyers how their current document compares to the standard.”
  120. http://www.noticeandcomment.com/
  121. General Counsels as Legal Procurement Specialists TyMetrix - Using $50 billion+ in Legal Spend Data to Help GC’s Look for Arbitrage Opportunities, Value Propositions in Hiring Law Firms Legal Procurement (High End of Market)
  122. There are 3 Known Ways to Predict Something
  123. Algorithms, Experts, Crowds
  124. example from my own work
  125. predicting the decisions of the Supreme Court of the United States
  126. experts
  127. crowds
  128. Black Reed Frankfurter Douglas Jackson Burton Clark Minton Warren Harlan Brennan Whittaker Stewart White Goldberg Fortas Marshall Burger Blackmun Powell Rehnquist Stevens OConnor Scalia Kennedy Souter Thomas Ginsburg Breyer Roberts Alito Sotomayor Kagan 1953 1963 1973 1983 1993 2003 2013 9-0 Reverse 8-1, 7-2, 6-3 19 19 19 19 19 20 20 0.00 0.25 0.50 0.75 1.00 0.00 0.25 0.50 0.75 1.00 0.00 0.25 0.50 0.75 1.00 - Reverse 0.00 0.25 0.50 0.75 1.00 0.00 0.25 0.50 0.75 1.00 0.00 0.25 0.50 0.75 1.00 - 8-1, 7-2, 6-3 9-0 19 19 19 19 19 20 20 algorithms
  129. For most problems ... ensembles of these streams outperform any single stream
  130. Humans + Machines
  131. Humans + Machines >
  132. Humans + Machines Humans or Machines >
  133. non-trivial question is how to assemble such streams for particular problems
  134. so that we are not required to rely exclusively on experts
  135. law is a field dominated by individual human experts
  136. in most fields - significant quality improvements have been made by moving from experts to ensembles
  137. observation 5
  138. law < > finance many elements in law look like finance did 25-35 years ago
  139. Lets me return to SCOTUS
  140. Paper Released August 24, 2015
  141. lots of investment decisions in law are just a version of this basic idea law = finance
  142. except its is implicit underwriting with no real underwriting standards law != finance (but it should)
  143. we expand on this theme in this presentation http://computationallegalstudies.com/2015/10/fin-legal-tech-laws-future-from-finances-past-katz-bommartio/
  144. observation 6
  145. the discovery + compliance convergence
  146. the goal is near real time monitoring
  147. challenge is that 80%+ of the world’s data is unstructured
  148. defect w/5 ‘airbag’ version 1.0 backdate w/5 ‘option’ etc.
  149. near real time monitoring of version 2.0 a large volume of corporate communications employee behavior etc.
  150. Behavior Change will change But Behavior Change will lag (i.e. rogue action will be done offline) (i.e. folks will craft incriminating communications at least for a while) Corp Security Starts to mirror today’s NSA
  151. thus, discovery (in part) becomes compliance and some (only some) litigation is avoided legal standards will still shift real time monitoring will generate lots of false positives
  152. ‘do less law’ https://vimeo.com/98606908
  153. BROADER POINT
  154. Three Types of Lawyers (as described by paul lippe)
  155. play “whack-a-mole”, reacting to problems by creating fear and friction within organizations and the impression that there is a legal disaster around every corner. Mediocre Lawyers
  156. can help clients shape (perhaps distort) external perception of risk. Merely Clever Lawyers
  157. design systems that balance risk and improve transparency, helping clients correctly price risk internally Great Lawyers
  158. observation 7
  159. Information Management is a significant problem in legal
  160. data that could inform operations is not collected / or not regularized
  161. Dodd-Frank RRP* for SIFI’s (Systemically Important Financial Institution) EXAMPLE: *(the UK version is called ‘ring fencing’)
  162. information necessary to undertake due diligence or other regulatory exercises is locked in an antiquated format (i.e. pdf, word, tif file)
  163. Resolution & Recovery Plans are Living Wills for Banks
  164. “The living will is effectively a roadmap and simulation of the largest possible series of transactions in a bank’s lifetime, the type of analytical exercise that is common in electronic systems design or software testing, but unprecedented in law.”
  165. Ideal RRP is a ‘War Game’ whereby a SIFI demonstrates it is robust to failure of various counterparties
  166. but requires review and understanding of the set of agreements across all business lines (p&l’s)
  167. problem is legal work product is not a pointable data object
  168. horizontal integration of legal work product in the broader corporate technology ecosystem represents a source of immediate value creation
  169. “Watson [and related machine learning technologies] will catalyze b e t t e r o r g a n i z a t i o n o f l e g a l information and legal data, forcing organizations to better manage their current data and delivering substantial re t u r n s f ro m t h i s i n f o r m a t i o n management step alone....”
  170. for example - contracts should be born (or processed) as computational to point straight into finance/acct and other relevant IT systems stored legal work product
  171. sensor data + contracts talking to other contracts
  172. #InternetofContracts This is the
  173. #InternetofContracts which is a special case of the
  174. #InternetofLegalThings which is a special case of the
  175. which is a special case of the
  176. which is a special case of the #InternetofThings #IOT
  177. we are starting a decade(s) long process of overhauling the global financial infrastructure
  178. it is a massive friction reduction exercise
  179. Big 4 vs. Big Law who will get to drive this agenda?
  180. only time will tell …
  181. EXECUTIVE SUMMARY but blockchain is important bitcoin is probably not that important
  182. observation 8
  183. recently met with the general counsel of a large publicly traded company who has reduced the legal expenditures of the company by nearly 50% using the lean methodology over past decade
  184. Lean, Six Sigma and other process improvement methodologies
  185. can help improve almost every subsector in law
  186. the toyota production system lean ideas lean for enterprises (white collar, etc.)
  187. The Life Cycle (Rinse and Repeat)
  188. Examples:
  189. http:// www.seyfarth.com/ dir_docs/ publications/ LITDecJan2014LeanS ixSigma.pdf
  190. http:// www.seyfarth.com/ dir_docs/ publications/ LITDecJan2014LeanS ixSigma.pdf
  191. Remove Waste (friction) Increase predictability
  192. convert high volatility process
  193. convert high volatility process into a lower volatility process
  194. Knowledge Mgmt (KM) is a start
  195. Goal is for KM system to integrate into lawyers actual behavior
  196. Most Legal Organizations use Email System as your DMS (in reality)
  197. Workers are looking back through old emails to see last version of something akin to this new doc
  198. Or Emailing the whole organization “does anyone have a good version of X,Y,Z document” that they could share ?
  199. Stop Wasting Time on Document Taxonomies
  200. Intelligent Detailed Taxonomy >(user guided) Search
  201. KM is about more than just documents
  202. knowledge lawyers possess includes processes
  203. That is why folks start with KM and move to process engineering
  204. Lean Process Mapping
  205. KM + Lean
  206. observation 9
  207. the rise of legal r + d operations
  208. intelligent monetization of expertise beyond just selling hours
  209. making $ while you sleep > billing 2500+ hours
  210. each of these entities (as well as others) are doing some sort of R+D operation
  211. partnership is a real barrier to r + d
  212. requires the foregoing to profits that would otherwise be paid out
  213. might need to create a separate capital funded r+d operation
  214. observation 10
  215. We are all (in part) Media Companies
  216. Implication is you need to build your personal brand
  217. need build your own lead generation operation
  218. auditioning for the next job while in your current job
  219. Portfolios Resumes> observable evidence noisy signaling
  220. Some of my former MSU folks
  221. http://www.chasehertel.com/
  222. http://www.amanismathers.com/
  223. http://about.me/ karenfrancismcwhite
  224. http://www.andyninh.com/
  225. http://briancpike.com/about/
  226. http://patellis.wordpress.com/
  227. observation 11
  228. Retail Legal Services + Technology Aided Access to Justice
  229. 70%+ of US does not have meaningful access to legal services
  230. in part, this is a business model problem ...
  231. existing offering are far too expensive for main street consumer
  232. but alternative models are being developed ...
  233. From Startup to Enterprise
  234. Large Scale Retail Facing Legal Services
  235. more technology continuous process improvement
  236. yields better priced services
  237. two examples of major retail innovations
  238. Reducing complexity through user interface (even though law is getting more complex)
  239. lots of opportunities to serve more probono/lowbono clients
  240. every time you remove waste is a chance to serve more clients
  241. I would like to share one tool developed by IIT Chicago-Kent College of Law
  242. IIT Chicago-Kent College of Law has done more to further access to justice than any law school in the U.S. (and it is not even close)
  243. used by a variety of legal aid organizations
  244. What is A2J Author? An online tool from Chicago-Kent & CALI to build graphical interfaces for low-income, self-represented individuals.
  245. A2J Author Gathers Data Authoring tool in the Cloud End User A2J Guided Interview
  246. “Learn  More”  bubbles,  definition  pop-ups, audio, graphic and video capabilities. A2J Author “just  in  time”  Learning
  247. Connects to National Server - LawHelpInteractive.org
  248. Completed Documents Delivered to Local Computer
  249. Uses for A2J Author Document Assembly Online Intake Benefits EligibilityScreen &Calculators E-FilingTriage Stand-Alone Info Guides
  250. 2,524,639 1,529,205 A2J Guided Interviews
  251. A2J Author 5.0- Cloud app & Mobile viewer!
  252. Goal for Version 6.0 of A2J Author we want to reinvent delivery of legal services using mobile
  253. observation 12
  254. the demographic reality …
  255. we are about to have the largest generational transfer in human history
  256. this is a MAJOR challenge to every organization
  257. your organization(s) needs information systems that can help support critical knowledge transfer
  258. information regularization information representation process mapping etc.
  259. observation 13
  260. organizations need different (better) human capital in order to support these trends
  261. and this should be reflected in the content of legal education
  262. T Shaped Professionals
  263. via
  264. Liberal Arts Legal .Edu
  265. Liberal Arts Legal .Edu Polytechnic Legal .Edu
  266. Daniel Martin Katz, The MIT School of Law? A Perspective on Legal Education in the 21st Century, University of Illinois Law Review (2014)
  267. I outline in this paper my vision for what law.edu could be ...
  268. lots of the current and future innovation in law started outside of law
  269. the distinction between lawyers and non-lawyers is blurring at the margins
  270. big picture idea is to have a less law centric view of the world
  271. big picture idea is to have a less law centric view of the world law + tech + design + delivery
  272. {Law Substantive Legal Expertise Analytics Platform AI Computing KM Process Improvement User Experience Design Thinking Project Mgmt Business Models Regulation Marketing + Tech + Design TM + Delivery}
  273. LexPredict.com
  274. ComputationalLegalStudies.com BLOG
  275. @ computational
  276. Daniel Martin Katz @ computational computationallegalstudies.com lexpredict.com danielmartinkatz.com illinois tech - chicago kent college of law@

×