AI Chatbot Lawyers for the Law Firms of the Future
The rampant spread of artificial intelligence (AI) across all industries is happening so fast that our MBAs can barely keep up with it, making us wonder – when can we just replace our MBAs with artificial intelligence and never have to hear about Porter’s 5 Forces ever again? Just about every stakeholder out there who has an economic interest tied to a firm is asking the same question – no, not about Porter – about how can we use AI to create more efficiencies and outperform our competitors. Some industries just scream out their suitability for an AI take over, like the legal industry for example.
According to the American Bar Association, there are 1.1 million lawyers practicing in the U.S., a number which represents 80% of the world’s lawyers. While some of these lawyers do good, many do not. The popular notion people have these days of getting something for nothing is exacerbated by the fact that over 15 million civil lawsuits are filed each year, some of which are filed by low lifes who hope to “win the lawsuit lottery” instead of accumulating wealth through hard work like the rest of us have to. Just look at how much of a problem this poses for doctors, a profession that is exponentially more respectable than that of a lawyer:
Yes, we’re feeling the 32% of doctors who say that they truly hate plaintiff lawyers that are in many cases nothing but parasitic ambulance chasers. While we’re quick to classify lawyers in the same category as car salesmen, recruiters, PR people, HR, or that guy who hands you a towel in the restroom at the club and expects a tip, the truth is that the law system we have today serves to protect each and every one of us. Lawyers are a necessary evil, plus, many smart and exceptionally good looking lawyers are probably reading this right now and we don’t want them to get upset and sue us. This is why we’re going to quickly pivot into talking about how artificial intelligence can be used to help improve our legal industry.
The $437 billion U.S. legal services market is ripe for disruption. In the old days, lawyers specialized in one of the many 100s of areas that comprise law. This is primarily because each area contains so much unique information that you need the equivalent of a PhD just to understand a single domain. What tool could possible read through all those reams of boring legal texts and give us answers when we ask plain, simple questions? Chatbots people, chatbots.
A Chatbot that Fights Parking Tickets
One way to get rich aside from winning the lawsuit lottery is to roll up your sleeves and work your butt off like Joshua Browder did. This bright young lad decided not to spend his late nights getting wrecked at the pub, but instead spent his late nights coding a legal chatbot. So far it’s helped save people $9.3 million on 375,000 parking tickets, though one wonders how many of those people just didn’t want to pay their ticket. Still, this chatbot was such a success that it’s being rolled out across all 50 states now. Mr. Browder insists that it will remain free, though he’s currently an “entrepreneur in residence” over at Greylock which means it’s only a matter of time before it begins to interface with local attorneys who are looking for leads. If you’re looking to do some proper legal research though, check out this next company.
Legal Research Using AI
The term “chatbot” simply refers to the ability for you to provide directions to AI algorithms in natural language. The ability for AI to understand what you’re saying and to go out and read through reams of data to come up with an answer is called “natural language processing” or NLP. While our next startup doesn’t have a chatbot interface per se, it does provide you with your own AI-powered legal research assistant.
Founded in 2013, San Francisco startup Casetext has taken in $20.8 million in funding to build their CARA platform which is an “easy to use AI technology that helps you quickly discover and understand the cases you need”. Just upload your brief and CARA returns all the relevant info for your case. While it’s currently being used by over 100 law firms, individuals can use this powerful tool as well, and over 1 million people a month do.
Casetext is hardly alone though in their ambitions to build an AI research assistant. Another San Francisco startup, Judicata, has taken in $7.8 million in funding from the likes of Khosla Ventures and Peter Thiel so that they can “map the legal genome”. Essentially, this means that they want to turn all the unstructured legal data out there into structured data. Here are five ways they are doing that better than everyone else:
Then there’s ROSS Intelligence, another San Fran startup that’s raised $120,000 in seed funding to build “the world’s first artificially intelligent lawyer” which they claim will also be “the world’s smartest lawyer” so essentially they’re working on The Singularity. Maybe they should go have a chat with Softbank about that. ROSS already has law firms using their product and they’ve recently opened up an R&D lab in Toronto, that hub of AI research that we talked about recently.
There are probably dozens more players in this space, but when we read about these startups we can’t help but think of LexisNexis, a pioneer in legal assistance research since the 1970s. Why can’t LexisNexis just hook up a chatbot to the 30 terabytes of legal data that they have and make it more accessible to various user profiles like Joe Schmoe with a parking ticket or Dewey Cheatum’s high-profile law firm? As we all know, the winners in the game of artificial intelligence will not be those with the best algorithms, but those with the best data.
Lastly, a Word of Warning
We’ve just given you a few examples of how AI is being used to make sense of all the legal information out there. In the same way that AI tells insurance companies which policies are more likely to have claims, AI will now tell you which lawsuits are more likely to be successful. Just take a look at this graph from Medscape:
So we could have a medical panel of error-prone humans screening these lawsuits or we could just have an AI algorithm assess the merits of a case in milliseconds. Soon, getting rich won’t involve suing the isht out of someone for some perceived injustice. Looks like all the ambulance chasers are going to have to get real jobs while the lawyers with actual talent will be (say it with us everyone) “freed up to do more value added activities”.
Just one word of warning. Every MBA out there is now going to go setup a legal chatbot which requires an email to engage with so that they can collect leads and sell them to attorneys. Since most VCs won’t touch this stuff, some chatbots will probably try to raise money through ICOs, like this one:
We’ll let the term “professional venture capitalists” slide but “impossible to steal“? Maybe they should go read about what happened to Coindash yesterday, an ICO funded startup that lost $7 million dollars of investors’ funding. Stay away from ICOs for all the reasons we gave you before and be very wary of the motivations behind any legal chatbots you decide to engage with. Stick to ones like Casetext that actually help you learn instead of just selling your data to some ambulance chaser.
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