For a long time, lawyers believed that they would remain unaffected by the digital revolution taking place across the economy. How could such a venerable profession, which is tightly regulated, held to a strict code of ethics, and provides a service based on highly intellectual input, be threatened by tech tools? Accordingly, when the very first LegalTech providers appeared in France a few years ago, the first reaction was to attack them.
At that time, Legalstart and Captain Contrat began providing a solution for automated legal document generation, based on customisable templates, which enable an entrepreneur or business starter to create his/her own legal documentation from setting up a company to patent filing through to winding up the business, at a very competitive cost.
The French bar associations decided to move against the new LegalTech providers, whom they regarded as illegal ‘poachers’ on their territory. In 2014, the founders of demanderjustice.com, a company that helps litigants to resolve small disputes for which legal representation is not mandatory, were faced with a lawsuit alleging “illegal exercise of the profession of lawyer”, before being exonerated of the charges two years later.
Lawyer comparison sites also came under attack. In 2012, CNB, the French national bar council, filed a lawsuit against Avocat.net, which has since been renamed Alexia.fr. The case dragged on until May, when France’s Supreme Court handed down a ruling in favour of the defendant, taking the view that a third party which is not subject to the rules of conduct to which legal practitioners must adhere may undertake assessments of legal services, in the same way that TripAdvisor is not classed as a hotelier.
PREDICTIVE justice ON THE WAY?
‘Predictive justice’ the coming trend
In the meantime, lawyers’ views on LegalTech tools have been evolving and the former resistance is giving way to genuine interest. The legal profession in France has realised that not only is the new movement unavoidable but that it does not represent a frontal attack on the profession. Sites such as Legalstart and demanderjustice.com are in fact creating an entirely new market. Most of their customers would in any case have been deterred by the costs from calling on a lawyer – for instance there are not many people who would pay a lawyer to settle a small dispute with a neighbour. Moreover, the most innovative solutions can help to boost lawyers’ productivity by freeing them from repetitive, time-consuming and low-added-value tasks.
Lise Damelet, a barrister with the firm of Orrick Rambaud Martel who is also a founder-member of the Incubateur du barreau de Paris (Paris Bar Incubator), a think tank that focuses on changes taking place in the legal profession, has observed this change of mindset at first hand. “France has followed in the footsteps of the United States, with a time-lag of a few years,” she points out. Following document generation tools and small dispute settlement solutions, LegalTech services have recently been ascending the value chain, examples being Doctrine.fr, a jurisprudence search engine, and Mon-avocat.fr, which puts litigants in touch with lawyers.
Meanwhile Predictice and Case Law Analytics are working in what is known as the ‘predictive justice’ field. Drawing on machine learning and other artificial intelligence techniques, these tools are able to predict the probability that a given lawsuit will succeed or fail and the amount of damages likely to be awarded to the successful party. This helps to reduce the degree of ‘judicial hazard’. Armed with this sort of information, a litigant may well decide to negotiate an amicable settlement if s/he concludes that his/her chances of success are low.
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Robots sifting contract wording
Just one step down from these we now find virtual legal assistants. A product of the IBM lab, ROSS is a ‘robot lawyer’ capable of analysing thousands of documents on company bankruptcy, which has been deployed by the firm of BakerHostetler. Since then, Ross has expanded his expertise beyond the realm of bankruptcy law.
Meanwhile, YperLex, which is based at the industrial complex of Sophia Antipolis near Nice in southern France, has created a chatbot called LiZa, whose purpose is to enable ordinary citizens to improve their understanding of the law and bring legal advice within reach of all by answering in simple, natural language questions put by lawyers’ clients
Lise Damelet reveals that robots working for legal firms are able to “draw up short memos on points of law, with the relevant jurisprudence in just a few minutes – a job which would take a trainee lawyer four days.” Meanwhile Softlaw is designed to make a precise review of contracts, drawing up an overview of the main clauses. The human lawyers can then concentrate on the key clauses without having to plough through a 50-page document.
Similarly, the Kira smart software developed by Canadian firm Kira Systems scans contracts and flags up any points likely to be contentious. Kira is used by such prestigious law firms as Freshfields Bruckhaus Deringer and DLA Piper. “Lawyers save time by using these technologies,” underlines Lise Damelet, explaining: “They are there to assist, rather than replace, lawyers. A surgeon would never allow a robot to operate all by itself in the operating theatre. In the same way, a lawyer will always assess the results of the robot’s work in the light of his/her training and experience.”
EJUST ARBITRATION TOOL
Launched in May 2016, eJust is an arbitration platform designed to put two parties to a legal dispute in touch with an independent arbitrator. “The entire procedure is conducted online. It’s a virtual courtroom and there’s no face-to-face hearing, just a videoconference call,” explains eJust founder and Chairman Amiel Feldman, pointing out: “We reduce the time required and thus the final cost of adjudicating the case. The total charges may be only a tenth of those associated with traditional court procedures.” With its system of standardised charging, eJust thus enables cases to be settled in less than 30 days at a cost of some €350, instead of an average of three years with the traditional approach. Feldman predicts: “Thanks to the optimisation provided by the new technologies, recourse to legal expertise will become more widespread and the number of cases brought will rise. If your dispute involves, say, €10,000 and it’s going to cost you €25,000 in legal costs, you’ll drop the matter. But if you can get the cost down to a thousand euro, you’ll go ahead.”
Consequently, Amiel Feldman sees this as a new market that is not being served today. “Small unsettled debts are taken on the Profit & Loss account. In this way, billions are being lost every year in France,” he underlines. The next stage will be to standardise contractual relations long before any legal dispute can arise. ‘Smart’ contracts like those based on blockchain technology will enable a transaction to be approved and the contract executed on an automated basis without any human intervention. In the event of any dispute, the blockchain will serve to arbitrate and deliver judgement.
ROBOT-LAWYER COLLABORATION ?
Robes no longer proof of superiority
François Mazon, a partner at the legal firm of Bass Mazon Steru Baratte who is an advocate at the Marseilles Bar, believes that nothing will halt this trend as long as the digital tools are able to provide the client with a better service at a lower cost. “Lawyers can no longer count on maintaining a monopoly over legal advice. Digital tools are undermining established positions. Putting on court robes will no longer suffice as proof of superiority,” he argues.
Mazon, the former boss of IT consultancies Capgemini and Steria, who obtained a licence to practice at the Bar after he had turned 50 years old, knows exactly what it means to provides services in a competitive market. He makes a telling comparison with the taxi market, which received a wake-up call when chauffeur-driven hire cars arrived on the scene. “Good taxi firms, which managed to improve their services, are enjoying a second lease of life,” he points out.
He foresees that the legal sector will re-structure into three segments. “Right at the top of the pyramid there’ll be highly specialised lawyers providing very sophisticated advice. At the bottom will come those standard services that can easily be automated, such as drawing up company statutes. It will be in the lawyers’ interests to work with the LegalTech firms to target this volume market. In the middle you’ll find generalist legal firms who do a bit of everything, from divorce proceedings to commercial court work and criminal cases. They’ll find it hard to justify high fees,” he predicts.
Amiel Feldman sees things in much the same way. “Digital tools will overturn the lawyers’ traditional business model based on hourly fees. There’ll still be specialists who are able to charge a 30% margin, but the others will have to switch over to a standard fee,” he argues.
From the Stone Age to the Silicon Era…
Lise Damelet has observed how lawyers’ pride has been seriously shaken by the new developments. “They didn’t see the digital wave coming. Many legal partnerships have no online contact window, not even a basic website. We’ve moved on from the Stone Age to the Silicon Era in no time at all. Legal firms could have decided to offer services developed by particular LegalTech specialists but they missed the boat,” she points out. For instance, Captain Contrat was founded by two brothers without any legal training who graduated from leading French business schools HEC and Essec.
However, she sees a counter-attack building. Some legal firms now for instance offer on their websites a self-assessment tool to calculate possible damages suffered when taking out a mortgage loan based on an erroneous Effective Interest Rate. Meanwhile AGN Avocats, a French legal practice network that operates on a franchise basis, is combining online services with high street premises with a ‘shop window’, rather like bank branches.
Moreover, leading legal partnership Linklaters is nowadays providing computer programming training to its lawyers. Combining these skills makes perfect sense to Lise Damelet. “Why not have lawyer-programmers who are able to design software and develop algorithms that meet their precise needs?” asks the Orrick Rambaud Martel barrister.