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Changing times for the legal sector; Technology is transforming the legal profession in ways that could make access to justice easier and more affordable, writes Richard Owen.

Byline: Richard Owen

egal services area vitally important part of the Welsh economy, bringing in more than PS700m of revenue per year to Wales.

LThe sector employs 9,100 people in highly skilled and well-paid jobs.

No wonder the Welsh Government has recognised its importance by making financial and professional services a priority area for the Welsh economy. Their aim is to make Wales the most competitive region in the UK for financial and professional services outside London by 2021.

It is a time of change for the legal sector and there are two major - to some extent related - challenges.

First, there has been regulatory and market change.

Secondly, advanced technological solutions are starting to make a big impact.

Regulatory and market change The Legal Services Act 2007 liberalised legal services. It introduced alternative business structures (ABS) which, for the first time, allowed non-lawyers to have a role in the ownership and management of law firms.

Research conducted by the Solicitors Regulation Authority and Legal Services Board in 2015 found the legal sector to be generally innovative, with 80% of law firms being open to new ideas. However, according to this research, ABSs are the most innovative of all as they are 13%-15% more likely to introduce new legal services than other types of regulated solicitor firms.

Wales has very much been at the forefront of this innovation.

Cardiff firm NewLaw was the first legal disciplinary partnership to be licensed as an ABS in England and Wales in 2012.

The introduction of fixed recoverable costs in personal injury cases with recommendations in July from Lord Justice Jackson to further increase their use to other cases worth less than PS25,000, and sometimes up to PS100,000, has also increased pressure on solicitors to be more efficient.

Technological changes to the legal sector Technology to support the legal sector, often referred to as legal tech, is already bringing about fundamental change. In part, this change is top down. Changes to regulation, such as the introduction of ABS and fixed fees, has increased competition and increased the need among legal providers to be more efficient.

Use of technology can cut down on time spent on repetitive tasks to enable them to be completed more quickly and cheaply. However, technological change is also driven from the bottom up by consumers keen to reduce their legal budgets.

Legal tech is already having a major impact on the way lawyers prepare cases for trial. Litigation frequently involves huge amounts of documentation, and parties to a case are required to make a 'reasonable search' for all relevant documents. Courts are also required to deal with cases at a proportionate cost.

Electronic discovery (often referred to as e-discovery) is when electronic data is sought, secured, located, explored and retrieved with intended use as evidence in a civil or criminal case. Types of artificial intelligence (AI), such as predictive coding software can review documents for e-discovery using computer algorithms to identify their relevance to a particular case.

It can analyse vast amounts of documents in minutes, when the same task would take a group of junior lawyers and paralegals weeks to complete a manual search.

The use of AI in legal proceedings took a significant step forward last year in the case of Pyrrho Investments Ltd v MWB Property Ltd, when the High Court approved the use of predictive coding software in e-discovery. In that case, 17.6 million documents had been whittled down to 3.1 million.

The High Court said that the cost of manually searching 3.1 million documents would be 'unreasonable' and the costs of using the software would be 'proportionate'. Predictive coding has also been endorsed in other jurisdictions such as the United States, Australia and the Republic of Ireland.

Technological change is also taking other forms. Algorithms have already been tested to predict the outcomes of cases in advance. An algorithm produced by Professor Daniel Katz assessed over 7,000 US Supreme Court cases from 1953 to 2013 and predicted the correct outcome in 70% of cases.

IT developers are now working to take this technology onto the next stage by analysing information from past cases to predict the outcome of future litigation.

Legal tech is not only supporting the commercial world but also enhancing access to justice. Big data is increasingly available for small geographical areas, such as at council ward level, which can help in the identification of legal need and better targeting of advice services to local communities.

It can also help overcome physical separation from legal services. Last year, the UK Government announced the closure of 10 courts in Wales.

HM Courts and Tribunals Service has acknowledged that Wales' geography and poor public transport makes access to courts difficult, with many court users now having further to travel.

Lord Justice Briggs published a report in July 2016 recommending the establishment of a new online court for dealing with all monetary claims up to PS25,000. The court would be designed to be used by people with 'minimum assistance' from lawyers, with its own set of user-friendly rules.

It is not just in the field of litigation that technology is making an impact. Machine learning software has been used as part of the due diligence process to review contracts in mergers and acquisition transactions.

In such transactions, large numbers of contracts have had to be analysed rapidly as there are usually tight deadlines. It is also imperative that they be analysed accurately but the pressures mean that a significant contractual clause, which could affect the value of a deal, can easily be missed.

Software has been developed which can learn to identify and analyse certain types of key contract clauses through the use of language, word order, etc. that tends to be used in such clauses. In this way, large contract reviews can be completed quickly and accurately.

What opportunities are there for new entrants into legal services? Legal tech challenges the traditional structure of law firms and many routine jobs traditionally carried out by junior members of staff will become obsolete. However, even with the use of AI there is still a need for human judgment so the legal profession will continue to need new entrants.

The implications for the content of legal education are very significant. US law schools are starting to incorporate aspects of technology such as computer coding into the legal curriculum.

There will be a greater need for law graduates to have higher level numeracy skills as they work with large amounts of data. They will need greater entrepreneurial skills to identify the opportunities arising from legal tech.

The outgoing Lord Chief Justice, Lord Thomas, said at the Legal Wales conference on September 15 that law schools should consider teaching the law of the digital economy.

As traditional jobs for entrants into the legal profession, such as document review, disappear, and online courts reduce the need for lawyers, new roles will emerge but only for those who embrace change.

Among the new types of role Professor Susskind says will appear to replace the old will be legal risk managers, legal knowledge engineers and legal project managers. Also, the number of legal tech start-ups has rocketed in the last few years, which is another new route for the ambitious law graduate.

In a nation like Wales, the key to rising to the challenges will be collaboration. This is the reason that Swansea University established the Centre for Innovation and Entrepreneurship in Law (CIEL) earlier this year. Its aim is to lead a transformation in legal education, research and practice. CIEL will support the development of technologies and processes for the legal profession and will promote the acquisition of high-level skills by law students, practitioners, and entrepreneurs.

The university has already approved a 'coding for lawyers' module that will be made available to law students this academic year.

CIEL will create an environment where legal tech entrepreneurs are supported to create new products and services. It draws on the expertise, advice and support of an advisory board comprising major Welsh, UK and international law firms and technology companies, as well as the Law Society Wales office and Solicitors Regulation Authority.

Swansea University is also establishing a LegalTech Wales network under CIEL's remit to bring together law firms and technology companies in a forum where ideas, trends and opportunities can be shared.

Legal tech has the potential to not only generate significant business for the Welsh economy but also improve access to justice by making legal services more affordable and available.

The infrastructure for collaboration that is needed between the Welsh Government, the legal profession, professional bodies, entrepreneurs, IT specialists and academia is in place.

The regulatory environment is favourable to the development of legal tech. Now all that is needed is for all relevant parties to seize the day.

| Richard Owen is associate professor at the College of Law & Criminology, Swansea University, and a member of the Law Society's Wales committee

"Even with the use of AI there is still a need for human judgment so the legal profession will continue to need new entrants.
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Title Annotation:Features
Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Oct 18, 2017
Words:1520
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