Future of the legal profession: AI and blockchain prompts call to protect rule of law and civil society

Innovative propositions are emerging all the time. From the Land Registry’s Digital Street using blockchain in a digital land register, to musicians exploring blockchain to protect their copyright. But these new technologies are not just new products that need to be regulated, they are fundamentally changing human and economic realities in society and challenging established legal systems. A digital land register, for example, changes the whole meaning of legal title and of what conveyancing as a process looks like.

Krzysztof Wojdylo is head of the new technologies practice at Wardynski & Partners in Poland, which recently set up a blog, new tech law. ‘These technologies can change the meaning of law,’ he says, ‘how it is created and enforced. Lawyers should be part of the innovation so that innovation still upholds society’s core values and the rule of law.’

Erik Valgaeren, a partner at Stibbe and former chair of the IBA’s Technology Law Committee, agrees. He believes that lawyers are engaging with this new technological revolution. ‘Lawyers need to do some really fundamental thinking about how these technologies will impact us as a society, and as lawyers,’ he says. ‘Private practice lawyers are well-placed to get involved because that is where the innovation first lands, as a file on a lawyer’s desk.’

Perhaps it is worth reminding lawyers too that this tech-change is not a bad thing, argues Wojdylo: ‘The longer I am a practising lawyer the more I am convinced that the law is becoming too complicated. A legal opinion ten years ago was ten pages now it needs to be thousands of pages; it is almost beyond our capacity to handle this - and many of these innovations could help change that.’

Lawyers will not come out on top if they simply try and compete with the machines. Recently, an artificial intelligence programme, Case Cruncher Alpha, was pitted against over one hundred commercial lawyers in predicting whether or not the UK’s Financial Ombudsmen would allow claims in hundreds of payment protection insurance mis-selling cases. The computer and the lawyers were given certain basic facts about the cases. There were 775 predictions made, and Case Cruncher achieved a staggering accuracy rate of 86.6% compared with the lawyers’ 66.3%.

Increasingly, young lawyers with a tech interest are being encouraged to use their tech skills to be legal ‘engineers’ and innovate within the legal services space. Start-ups such as F-Lex, an on-demand paralegal resource for law firms, are cropping up using new technology to disrupt (and improve?) the established way of doing things. F-Lex uses an App which matches law students with law firms who need extra resource such as emergency bundling or e-discovery.

F-Lex recently launched its own Code Academy, a course of ten modules designed to teach law students about tech. ‘Our paralegals are going to be using AI machines in firms in their careers,’ Mary Bonsor, Co-Founder of F-Lex, tells Global Insight. ‘We need to make sure that they are open to that fact, engaged with that fact, and can understand how these machines work and what they can do.’

But also outside of legal services, there is an increasing engagement by lawyers with the societal challenges which new technologies bring. This is being done at an individual and collective level, as Joost Linnemann, partner at technology firm, Kennedy Van Der Laan in Amsterdam and Membership Officer of the IBA Technology Law Committee, explains. ‘Ecosystems are emerging in the development of technology, and law practitioners are participating in that’, he says. In the Netherlands, for example, the Dutch Blockchain Coalition is a community of innovators, regulators, universities and lawyers which is working together to discuss and explore a range of challenges posed by the new technology.

At an individual level, lawyers in the tech space in private practice are also well-placed to raise awareness of the consequences of blockchain or AI. ‘Tech people are now developing fully automatic solutions for certain business transactions using blockchain and smart contracts,’ says Wojdylo. ‘But they do not recognise the nuances of reality, they cannot see what can go wrong – lawyers can. When you look at credit and loans for instance, if a smart contract governs a credit arrangement, then there could be no legal person, just a code which is self-executing, fully-automated. As long as this works, it is brilliant. You don’t need cash. You don’t need any legal relationship.’

‘But reality is not that simple. What happens if there are unexpected circumstances, a debtor suddenly can’t repay the loan? Or what if some of the data at the credit assessment point is found to be inaccurate? There is no room for manoeuvre because the code self-executes.’ Wojdylo says. ‘Blockchainers actually want the lawyer’s perspective because they understand where problems arise.’

Gabrielle Patrick is Vice-Chair of the IBA’s Leisure Industries Section (virtual currencies). ‘Technologists and lawyers need talk to each other because the laws are always behind, she says. ‘In this way, the lawyers have the ethical considerations on their radar and can edge towards frameworks that deal with the ethical issues as they emerge and work with technologists to tackle them.’

She adds: ‘There needs to be a community, a joint platform for practitioners to debate the ethical issues that these new technologies raise.’

Polly Botsford is a freelance journalist and can be contacted at Polly@pollybotsford.com