This presentation by the John O. McGinnis, Northwestern Pritzker School of Law was made during a roundtable discussion on Disruptive innovations in legal services held at the 61st meeting of the Working Party No. 2 on Competition and Regulation on 13 June 2014. More papers, presentations and contributions from delegations on the topic can be found out at www.oecd.org/daf/competition/disruptive-innovations-in-legal-services.htm

1. PRESENTATION BY JOHN O. MCGINNIS
G E O R G E C . D I X P R O F E S S O R I N C O N S T I T U T I O N A L
L A W A T N O R T H W E S T E R N P R I T Z K E R S C H O O L O F L A W
Machine Intelligence and the
Legal Profession

2. Accelerating Computational Power
 Machine
Intelligence has
continued to
become ever
more powerful
 Moore’s Law has
held for 40
years
 Improvements
in software and
connectivity are
force multipliers

3. Accelerating Computational Power
 Exponential growth
is likely to continue
through other
means, like carbon
nanotubes and
optimal computing

4. Accelerating Computational Power
 Machine intelligence has moved from formal systems
to systems with more uses in everyday life and in the
profession of law
1997 – Big Blue beats World
Chess Champion Gary Kasparov
2011 – Watson beats Jeopardy
Champion Ken Jennings
2013 – IBM builds a division
around Watson’s analytics
2016 – Law firms hire Ross, a
service based on Watson’s
analytics

5. Predictive Coding
Source: Lit i View
After being trained by lawyers on a sample of relevant
documents, machines are responsible for finding other
documents in discovery

6.  Predictive coding is advancing
 One 2011 study indicated that:
 Manual reviewers identified between 25% and 80% of relevant
documents, while technology-assisted review returned between
67% and 86%
 Technology-assisted review required human review of just 1.9% of
the documents
 Courts are increasingly granting requests from parties to use
predictive coding in litigation
 Common methodologies:
 Concept Searching
 Contextual Searching
 Metadata Searching
Predictive Coding

7.  Law firms have problems creating disruptive
technology in their field
 It is not lawyers, but other businesses that are
leaders
 Important Players:
Predictive Coding

8. Legal Search
 Computerized legal search has been around for 40
years, but it has been focused on key words
 Now the movement is toward semantic search
 Using IBM’s Watson, a team of students at University of
Toronto launched ROSS Intelligence in 2015 with support
from global law firm Dentons
 LexisNexis TotalPatent includes a semantic search option

9.  Moneyball comes to law
 Defined by the Gartner IT Glossary as:
“Any approach to data mining with four attributes:
 An emphasis on prediction;
 Rapid analysis measured in hours or days (rather than the
stereotypical months of traditional data mining);
 An emphasis on the business relevance of the resulting
insights (no ivory tower analyses); and
 An increasing emphasis on ease of use, thus making the
tools accessible to business users.”
 Law firms can use predictive analysis for:
 Targeting lucrative clientele
 Pricing matters based on past performance
 Predicting outcomes of litigation
Legal Predictive Analytics

10. Legal Predictive Analytics
In 2015 LexNexis bought
out Lex Machina, a
company with substantial
data

11. Legal Predictive Analytics
Docket Alarm’s Patent Trial and
Appeals Board analytics program
allows users to generate reports on
judges, as well as parties, firms, and
technology areas to see who settles
the most and at what stage.

12. Transactional Documents
 Legal Document generation is
occurring at both high and low
ends
 Legalzoom creates documents,
such as wills, for the masses
 Startup Documents has
created a program to generate and
store documents for startups
wishing to incorporate, grow, and
maintain their businesses
 RocketLawyer provides
individuals and businesses with
legal document generation and
enforcement services

13. Linear v. Accelerating World
 Once computation gets into a space, it does not stop
 Improves search, document generation, prediction
 Even brief writing may be invaded in the decades to
come

14. Evidence for Effect Already
1. Decline of incomes of “small” lawyers
2. Stagnant associate salaries
3. Drop in talented people applying to law
schools – their own future prediction
4. Huge increase in start-ups in legal space
 The Stanford Center for Legal Informatics hosts a curated
list of 551 companies “changing the way legal is done”
 The list includes 153 document automation companies, 42
legal research companies, and 38 analytics companies

15. Evidence for Effect Already

16. Long-term Changing Composition
 Technology is more likely to displace lawyers in low-
value and simple matters
 Innovation happens at the low-end first
 i.e., drafting standard legal forms, areas of law where patterns and
past data can predict the outcome of a case
 Lawyers in relatively stable areas of law like trusts and estates will be
severely disrupted
 Technology is not likely to displace lawyers in high-
value and complex matters
 Specialists in novel areas of law will still be needed
 Lawyers in areas of fast-changing law, like much of financial
regulation, will be largely unaffected

17.  Machines cannot substitute for trial lawyers –
but predictive analytics will help convergence
on value of lawsuits, reducing the need for trials
 Premium on psychology and bonding, getting
clients to take sensible actions
Long-term Changing Composition

18. Embracing Technology
 Instead of trying to slow down computation,
lawyers should relax ethical rules to permit
others to own law firms. See changes in Britain
and Australia.
 Only firms with substantial capital will be able
to innovate

19. Roadblocks to Innovations
1. Unauthorized practice of law rules not likely to slow
innovation
 Legislators have pushed back on behalf of constituents
 In any event, most computerized service can be used as inputs into lawyers’
work and the effect will mostly be the same
 Use of technology can also be placed offshore to evade restrictions
2. Rules structuring legal partnerships pose great threat to
innovation
 Model Rules of Professional Conduct 5.3, 5.4, 5.5, and 5.7 restrict the ability of
companies to earn profits from providing legal services
 Makes it difficult for law firms to raise capital to innovate and collaborate with
innovators
 Makes it more likely that lawyers will try to slow down innovation