The Robots Are Coming!

by Andres Oppenheimer

  Then Modria’s algorithm finds out—using automated searches—whether the customer has filed previous complaints against the seller, whether the guitar was sent on time, and if the package was delayed at any point during the shipping process. Based on this information, Modria’s algorithm automatically reaches a verdict. For instance, it may call for exchanging the damaged guitar for a new one, and possibly include a fifty-dollar credit for the inconvenience, in hopes of keeping the customer happy and willing to return to the same e-commerce site in the future.

  If the customer still isn’t satisfied with the algorithm’s ruling, the same “resolve your problem” page on eBay’s website offers an option to appeal, which is also automated. According to Modria.com president Scott Carr, 90 percent of the more than 60 million online disputes handled by Modria are resolved through these first two stages. If the algorithm can’t resolve the issue by this point, then one of Modria’s human mediators will intervene, Carr explains on the company’s website. But with advances in artificial intelligence, within the next five to ten years, the algorithm should be able to handle just about any dispute without the need to use a human arbitrator as a last resort, Carr added.

  Benjamin Barton, a professor at the University of Tennessee’s College of Law and author of Glass Half Full, a book about the future of lawyers, predicts that platforms like Modria.com will be replacing growing numbers of lawyers and judges, and not just because online services offer cheaper services. Barton points out that one of the major reasons is the fact that courts around the world simply can’t handle the number of pending cases, and fewer companies and individuals are willing to wait months or years to have their disputes resolved. “Right now, Modria promises an elegant solution to a previously insoluble problem: how to deal with the mass of smaller disputes created by e-business,” he writes. “Tomorrow, it may try to solve a different problem: how to deal with larger, more expensive disputes.”

  WILL YOU NEED A LAWYER TO BUY OR SELL YOUR HOME?

  Blockchain, the network of encrypted financial transactions, could also end up replacing lawyers and notaries who do the legal paperwork in real estate transactions. Alec Ross, former senior adviser for innovation to Hillary Clinton while she was secretary of state, says that what struck him the most when he bought a home in 2014 was that the procedure had changed very little since his parents had bought their home fifty years earlier. “There were huge piles of paper with signatures and seals,” he recalls in his book The Industries of the Future. “It took weeks to sort the records, and on the day of the sale, it took hours to get through all the paperwork. The process of verification was manual and ridiculously expensive. We paid thousands of dollars in legal closing costs to verify a transfer that could be done electronically for nearly nothing if some technology-based ingenuity were applied….It is hard to think that a young lawyer today could count on 45 years of employment organizing legal documents for home buyers.”

  THE FLESH-AND-BLOOD LAWYERS STRIKE BACK

  In some countries, lawyers are already publicly fighting back against what they see as a growing threat from robots. Just as taxi driver guilds rebelled against Uber and attacked their drivers in Paris, Buenos Aires, and other cities around the world, lawyers’ associations are taking action against LegalZoom, RocketLawyer, and other legal services websites. These associations, much like those of taxi drivers, argue that state laws prohibit the practice of law by anyone who is unlicensed, in this case by people who have not graduated from law school and passed the bar. In a number of cases, lawyers’ associations have gone to court looking to shut them down. But in the long run they are likely fighting a losing battle, just as the cabdrivers did.

  Back in 1999, the Unauthorized Practice of Law Committee—a Texas committee formed to enforce that state’s laws on the unauthorized practice of law—filed a suit against Parsons Technology, a software manufacturer whose product, Quicken Family Lawyer, or QFL, helped people create basic legal documents like wills, contracts, and rental agreements. A court initially ruled in favor of the committee, but as time went by, consumers filed an increasing number of challenges, demanding access to cheaper legal services.

  As the popularity of online legal services platforms grew, and as traffic on websites like LegalZoom and RocketLawyer skyrocketed, judges across the country began dismissing lawsuits against them. In many cases, even when a court managed to shut down a website, the company behind it would simply begin operating out of England—where the law allows for many basic legal services to be offered by people without law degrees—or some other country across the globe.

  In 2016, during the semiannual meeting of the American Bar Association, Pennsylvania state bar association president William Pugh threatened to withdraw from the ABA if the association didn’t deep-six a basic legal services program for small companies that it was developing jointly with RocketLawyer.com. Under pressure from Pugh and his colleagues, the ABA quickly announced that the program would be terminated, at least for the time being.

  But few believe that Pugh’s victory over the ABA will last. According to Josias “Joe” N. Dewey, a law professor at the University of Miami and the founder of LegalTechLabs, what we’re seeing is “a struggle between the past and the future” in which Pugh and his supporters were “protecting an economic cartel” and “conspiring against the client’s freedom to choose cheaper legal services.” Traditional lawyers will not be able to withstand the offensive of low-cost legal technology, he says.

  THE COMING POST-PROFESSIONAL SOCIETY

  There is a growing consensus among scholars that as with other industries, attorneys will no longer enjoy an absolute monopoly on exercising their profession. One of the best-known supporters of this theory is University of Oxford professor Richard Susskind, president of Great Britain’s Society for Computers and Law, a columnist for the Times of London, and author of the book The End of Lawyers?

  According to Susskind, professions as they exist today are in danger of extinction because they offer outdated, expensive, and elitist services in which the knowledge of a few is accessible only to a small section of society. They are increasingly being replaced by online alternatives that are not only cheaper but often better. “In a ‘technology-based Internet society,’ we predict that increasingly capable machines, operating on their own or with non-specialist users, will take on many of the tasks that have been the historic preserve of the professions,” he and Daniel Susskind write in The Future of the Professions. “We anticipate an ‘incremental transformation’ in the way that we produce and distribute expertise in society. This will lead eventually to a dismantling of the traditional professions.”

  Until now, lawyers, accountants, and other professionals were defined by their possession of a specialized knowledge, specific credentials such as university degrees or licenses to practice their trade, and the ability to perform highly regulated tasks. Only attorneys or notaries could draw up certain legal documents, just as doctors are the only ones who can prescribe certain medications. Through a tacit agreement with society, these professionals offer their specialized knowledge to the public in exchange for being able to enjoy a monopoly on their work. But that agreement is rapidly vanishing, because in the age of the Internet, professionals have ceased to be the absolute owners of their specialized knowledge, Susskind argues. Anyone with access to Google can retrieve a large part of this knowledge in a matter of seconds, and for free. Why should society force people to pay for what they can do by themselves?

  LAWYERS IN ENGLAND HAVE ALREADY LOST THEIR MONOPOLY

  Even if one believes that human attorneys will continue to be an indispensable part of the legal profession for years to come, at least part of their work—especially the simpler contracts and documents—will increasingly be offered through alternative sources like websites run by people without J.D.s or professional licenses, Susskind says. The Oxford professor, who has become a champion of what he calls
the “modernization of professions,” says that it’s only a matter of time until social pressures break down the attorneys’ monopoly on the legal profession in the United States and other countries, because there’s no longer any justification for them to be the sole owners of legal knowledge and thus able to charge exorbitant fees.

  In England and Australia, for example, the laws have already been relaxed to allow people without law degrees to offer legal services. The Co-operative Bank, with headquarters in Manchester, England, for example, has announced that it will be offering legal services at 350 of its branches, and many are predicting that large superstores like Walmart or Sears will soon be doing the same. To protect themselves from the growing threat of competition, large law firms are beginning to diversify their sources of income. Like traditional banks did when they started offering services online in order to be able to compete with virtual banks, many law firms are beginning to offer basic legal services online, such as the drafting of simple contracts. According to Susskind, these firms will soon be hiring paralegals—perhaps even from low-wage countries—to run their online service programs. In the near future, the big law firms won’t resemble the ones we read about in John Grisham novels in the least. Instead, they’ll be replaced by firms offering more affordable legal services that will be staffed by robot-assisted attorneys, by online law offices, or by accounting companies, banks, grocery stores, and other businesses that are already starting to do legal work.

  WHAT PARTS OF A LAWYER’S JOB CAN BE AUTOMATED?

  John O. McGinnis, a professor at Northwestern University’s Pritzker School of Law, and Russell G. Pearce, a professor at Fordham University’s School of Law, concluded in a study that the parts of a lawyer’s job that are most likely to be automated in the near future will be reviewing documents, researching case history, and analyzing the chances of a case’s success. Before the introduction of Ross and other legal services robots, attorneys had to search records on specialized Internet sites like Lexis by using keywords, much like when one does a Google search. But that was a tricky thing, because there was always the possibility that a highly relevant document wouldn’t show up because it didn’t contain the specific keyword an attorney had typed in. The opposite was possible, too: that the search could produce documents containing the keyword but completely irrelevant to the matter at hand. Now, thanks to artificial intelligence, algorithms have perfected the art of deciding whether a particular document is relevant to a particular case or not. Artificial intelligence allows for searches using basic concepts expressed in simple language, as opposed to highly specific keywords, in order to find relevant materials.

  The algorithms aren’t perfect, of course, but the authors of the study argue that robots make far fewer mistakes. “Imperfection is the norm,” they say, “even when lawyers perform document review, where fatigue, boredom, and other frailties—which do not affect machines—can substantially reduce the accuracy of document review.” But now, they say, search engines for case histories and other legal matters will be incredibly more effective.

  WILLS, PRENUPS, AND INCORPORATIONS

  McGinnis and Pearce maintain that while lawyers have used boilerplate legal documents since the Middle Ages, artificial intelligence will revolutionize their use because it will be able to adapt them to meet individual situations in a split second. In this day and age, anyone can enter their personal data on LegalZoom.com or any other legal services website and draw up a will or incorporate a new company in the public registry. But with advances in artificial intelligence, more complex documents will be personalized and perfected to the point that they’ll be much more than simple drafts.

  “Of course, at first, lawyers will still be very involved in marking up the first drafts that machines create. But even at this stage, the savings can be very large,” McGinnis and Pearce argue. “In the future, machine processing will be able to automate a form, tailor it according to the specific facts and legal arguments, and track its effect in future litigation. As hardware and software capacity improves, so too will the generated documents. We predict that within ten to fifteen years, computer-based services will routinely generate the first draft of most transactional documents.”

  THE ALGORITHMS THAT PREDICT WHO WILL WIN A CASE

  Thanks to new developments in algorithms, the new field of predictive analysis is revolutionizing the legal world. Attorneys can now use real data to predict their chances of winning at trial. For now, when a lawyer advises a client about the advantages of going to trial or negotiating a settlement, the lawyer does so based on his personal experience or intuition. But this has obvious limitations. By comparison, “the advantage of predictive analytics is that it provides a mechanism both to access a vast amount of information and systematically mine that information to understand the likely outcome of the case at hand,” McGinnis and Pearce write.

  There already are Internet companies like LexMachina.com that have files on millions of patent cases, which they can use to detect trends and make predictions about whether a patent application might be approved before it’s even submitted. And the LexMachina.com model is being applied to several other areas of the law, up to and including cases on their way to the U.S. Supreme Court. McGinnis and Pearce admit that predictive analyses on patent approval or Supreme Court decisions are easier to run than others because—especially in regard to the Supreme Court, which has only nine judges—there is a relatively limited number of cases and the voting habits of each justice’s decisions are easier to foresee. But the authors predict that hurdle will also be overcome in the coming years as predictive studies will spread across just about every facet of the legal profession.

  “To be sure, legal analytics will still leave a role for lawyers. A lawyer’s judgment may still add some value to the predictions derived from machine intelligence, even if the machine prediction alone is better than the lawyer’s prediction alone. Over time, however, legal analytics will reduce the value of a lawyer’s assessment in at least some cases,” McGinnis and Pearce write. Some investors are so confident in the legal predictions churned out by algorithms that they are willing to offer loans to people who are considered likely to win in court. The Silicon Valley website Legalist.com, for instance, offers “funding for your lawsuit.” If you need some cash to get your lawsuit up and running, and the company’s algorithm decides that your chances of winning are good, they’ll give you a loan in exchange for a percentage of your eventual settlement. Could this be the start of a new industry? Will we bet money on other people’s cases based on which algorithm we think will do the best job?

  ROBOTS THAT PICK THE BEST LAWYER FOR YOU

  Predictive data analysis is increasingly being used not only to evaluate the chances of a case’s success but also to forecast which law firm or particular lawyer will be the best suited for your need. LexMachina.com, a division of LexisNexis, which was created by Stanford Law School, and Miami-based Premonition.com do just that. They help clients evaluate law firms before hiring them, and enable firms to assess themselves, so that they can promote their services more successfully if they rank high on a particular legal service.

  LexMachina’s “comparator apps” allow subscribers to compare up to four courts, judges, or firms in a matter of seconds. According to the announcement posted on the company’s website when the product was first launched in 2016, the “comparator” ranks law firms by their success rate, their respective experience with specific types of cases, the amount of time it took to resolve each case, and the complaints filed against them by clients.

  For example, if a company wants to hire a law firm to bring a case against someone who has violated one of its patents, it can quickly search for the top four firms specializing in that sort of case. Then the prospective client can enter these four names into a form on the website, establish his priorities—“the least expensive one,” for instance—and voilà: LexMachina gives its recommendation on which would be the law
firm best suited for the case.

  The rankings aren’t based solely on winning percentages and costs, but on several other needs that potential customers may have. There might, for example, be two firms that charge the same fees and have a similar success rate, but one of them could have much more experience in certain cases or resolve them much more quickly than the other. If a LexMachina client needs to close a case as soon as possible—because someone is infringing on a patent, costing the company many thousands or even millions of dollars, for example—the app will prioritize the firms that have the shortest turnaround times. And soon these apps are likely to offer comparisons of individual attorneys within a firm and determine who would be best suited to each particular case.

  THE GOOD NEWS: ATTORNEYS WILL HAVE MORE CLIENTS

  The good news for lawyers is that their client base will expand substantially. Currently, only higher-earning people tend to use an attorney for a prenup or commercial contract, but soon enough lawyers will be able to offer such services to the entire population at very low cost, because all they’ll have to do is proofread—and occasionally slightly edit—the documents written by robots. Algorithms will be taking care of the most tedious parts of their jobs.

  Plus, there are still aspects of the law where computers will have a hard time replacing human beings. It’s hard to imagine, for example, a robot making a good opening or closing statement to a judge and jury. And while algorithms will affect their litigation indirectly—running predictive analyses will encourage parties to start a lawsuit or reach an agreement—it will still be quite some time before a robot actually argues a case, or at least does so with the eloquence of a human attorney.