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Tuesday, 27 November 2018 11:27

Law firms’ fears about risks posed by using artificial intelligence intensifying

A growing number of law firms are turning to artificial intelligence as a means of increasing efficiency, providing a better service to clients, and freeing up lawyers’ time to concentrate on more complex tasks – however, the use of such technology is also giving lawyers sleepless nights as they worry about the potential threat it poses as it leaves firms increasingly vulnerable to cyberattacks by hackers

latamdec18 p16 photo1Though the use of artificial intelligence (AI) among law firms is on the increase it is also causing considerable concern among lawyers and their clients, specifically in relation to cyber security, data protection and confidentiality, attendees at an event organised by The Latin American Lawyer in Mexico heard.

Such risks are inevitable given the fact that information is shared during legal processes and, consequently, law firms are a particularly attractive target for hackers, according to panellists at the event, which was held in collaboration with Greenberg Traurig and EY Law. The panel heard that there are two types of companies, “those that have suffered a cyberattack, and those that will”. Therefore the use of technology by law firms means that it is essential that firms adopt solid governance structures, and invest in employing staff that are adept at using technology. Human error in the use of AI will continue to be a cause for concern as reliance on technology increases, panellists heard, and an AI system will never be held culpable for not identifying risk, as software is only as good as the lawyer who uses it – it is the lawyer that designs the M&A transaction for the client. AI is making substantial inroads into the legal profession with the implementation of software and applications that aim to lighten law firms’ workloads, participants in the event heard.

While an increasing number of law firms are using AI software to carry out tasks such as due diligence – employing software such as HighIQ and Intralink – its use is also increasing in other aspects of M&A deals, such as the document negotiation phase and the deal signing and closure stage. In this context, software such as Luminance is a major time-saver for lawyers, due to its ability to scan and review large volumes of contracts, attendees were told.

“AI identifies risks better than a team of lawyers can,” according to event participant Víctor Manuel Frías, a lawyer and shareholder at Greenberg Traurig in Mexico City. However, he added that AI is intended to complement the work of lawyers and help them to streamline processes, and it should not be seen as a tool that replaces staff. AI’s ability to take care of the more mundane tasks necessary in any transaction allows lawyers to focus on strategic decisions as well as developing the know-how that will improve their relationships with clients, panellists heard.

Adverse effect on lawyer-client relationships?
AI use by law firms is expected to increase substantially in the short term, with an estimated 95 per cent of law firms’ interactions with clients expected to involve AI by the year 2025. The increased use of AI is an evident trend across the region amid a shift, across all sectors, towards the greater use of digital tools to facilitate day-to-day business, such as data management and cloud computing. However, there is still a certain degree of scepticism among law firms and clients, attendees heard.
One concern is that, given AI’s ability to reduce the time spent scanning and preparing documents, and the subsequent cut in costs, the lawyer-client relationship could be become less personal and negatively affected as a result. Consequently, technology must be seen as a tool for improving processes but not as a replacement for human communication, participants argued.

Younger lawyers demanding change
In addition to the reluctance among some law firms to embrace new technology, its take-up has also been hindered by some law schools’ failure to teach new technology to students. This is despite the fact that it is the younger generation of lawyers that is demanding change, and specifically automation, to accelerate and simplify what can be tedious processes, panellists heard. At the same time, law firms need to be continually providing training to their staff on the new tools that are becoming available. In addition, it is also widely accepted that firms and companies that embrace new technology are more attractive to young talent and more likely to be viewed as potential employers.latamdec18 p16 box

Panellists generally agreed that we are currently living in a new age of technology that is bringing a plethora of new opportunities to law firms, but capitalising on such opportunities requires constant and diligent risk management. Meanwhile, amid the risk of interpersonal relationships between lawyers and clients being put in jeopardy by the use of AI, the use of such technology can actually lead to the creation of a more collaborative framework among lawyers themselves, as well as their clients.

Furthermore, despite initial scepticism on the part of some law firms, confidence in technology is, on the whole, increasing, and its potential to change processes, and even professions, should be seen as a positive step towards streamlining processes and providing a helping hand to lawyers during the often complex processes involved in M&A transactions.

latamdec18 p17 speakers list