Artificial Intelligence (AI): A new-frontier in legal services competition in Asia

In a news release issued last week – leading international NewLaw firm Axiom announced “the market launch of AxiomAI – a program that leverages Artificial Intelligence (AI) to improve the efficiency and quality of contracts work. As part of AxiomAI, Axiom will accelerate the use of current generation AI to help extract information from contracts in order to streamline contract analysis. At the same time, Axiom will continue its research and development efforts to shape next generation AI applications for more unique and transformative use cases.”

As one of the leading NewLaw firms currently operating in the Asia-Pacific region – the announcement by Axiom that it’s introducing an AI-driven service capable of streamlining legal service to corporate legal departments is an important marker in NewLaw’s continued development in the region.

This article will review the following topics:

• Implications for AI in law in Asia
• How AI is currently impacting the business of law 
• How AI technology fits into law firm processes
• A list of BigLaw, NewLaw and legal startups innovating with AI in Asia, including interviews with leaders of BigLaw and NewLaw firms in the region
• What is the future for AI in law firms, including interviews with advisors to the legal services sector with knowledge of AI’s application to legal services

Implications of AI in law in Asia: “Potentially Limitless”

Assistant Professor of Law Eliza Mik from SMU School of Law in Singapore explains the big picture for AI in law in Asia in a recent interview published by the Singapore Management University (SMU) Blog.  In particular, Professor Mik believes the implications of AI in commercial law in Asia are “potentially limitless”.   She cautions, however, that they will “depend very much on the way in which AI is used”.  She notes specifically the limitations of AI in its current form as well as the ongoing need for lawyers as an integral component of the lawyer-client dynamic.

How AI is currently impacting the business of law 

• A recent New York Times article places the issue of AI in law in its larger commercial context:  “Corporate clients often are no longer willing to pay high hourly rates to law firms for junior lawyers to do routine work. Those tasks are already being automated and outsourced, both by the firms themselves and by outside suppliers like Axiom, Thomson Reuters, Elevate and the Big Four accounting firms.”  The article cites Michael Mills, lawyer and chief strategy officer of legal technology startup Neota Logic — who told the Times that legal teams of the future will see a partner in charge of a team – with a machine a member of that team.
•  The Financial Times (FT), cites a 2016 study by Deloitte which predicts that “114,000 jobs in the legal sector in the UK alone are likely to be automated within 20 years.”
• In an extensive article on the subject of the use of Artificial Intelligence (AI) in legal services, the Financial Times (FT) details how numerous traditional law firms as well as NewLaw firms and legal startups are adopting AI as a means to streamline legal services.  The report cautions, however, that fundamental changes are unlikely to come to legal services due to the ownership structure of traditional law firms and the current limitations of AI itself.
• In a recent survey by international accounting firm BDO — the results of which were detailed in Asia Today International: “Technology [is] set to have the greatest impact on law firms over the next five years” according to managing and senior partners of 50 leading law firms.  More than 80% see technology as having the greatest impact on their firm. With 20% believing AI will have the single greatest impact.
• And writing in Law Tech Asia, Josh Lee details how technological changes (of which AI is one part) will impact the utilization of real estate assets, the onboarding of millennial lawyers – and how some firms in Singapore have been recognized to be at the forefront in making these shifts.

How AI technology fits into law firm processes

Anna Kim of Hong Kong-based NewLaw firm KorumLegal, explained in an article which originally appeared in Hong Kong Lawyer: The Official Journal of the Law Society of Hong Kong — that AI as it is currently applied in legal services is at a beginning stage.  This stage is characterized by technology which, according to Kim — “are confined to a single domain and require a substantial amount of human oversight.”  Or on a spectrum – are no greater advanced than the work that might be performed by a junior associate.  Kim predicts this technological level will prevail in AI applied to legal services for the foreseeable future.  At present, AI can do two things in legal services, according to Kim: 1. Natural language processing (NLP) — and 2. Modelling and Predictive Analytics.  See Ana Kim’s analysis of where these two apply to legal services.

And a recent article by Raj Gunashekar in Asian Legal Business succinctly sums up where AI fits in law firms:  “The most common use for AI in the legal field occurs in the due diligence phase. This includes expert legal research, contract review and e-discovery.”

In Asia, BigLaw, NewLaw and legal startups are innovating with AI

A number of large law firms, NewLaw firms and legal startups in the Asia-Pacific region are currently innovating  with AI or seriously considering doing so.  Among those firms include:

• Linklaters, where Singapore-based Sophie Mathur, a firm Partner and global co-head of innovation has been helping the firm to adopt AI, including a program dedicated to reading, analyzing and reporting on large amounts of documentation without reference to practice area.  
• MinterEllison, where Partner and innovation leader Andrew Cunningham is helping the firm innovate across a range of areas including AI.
• Baker & McKenzie — In an email interview for this article, Sydney-based Partner Adrian Lawrence, who is strongly engaged in the firm’s innovation strategies explained that:  “AI is an increasingly important tool in the arsenal of any law firm, in particular for large-scale matters which involve significant quantities of both structured and unstructured data, such as large litigation matters and major M&A transactions.  Given these larger matters tend to be undertaken by BigLaw, rather than NewLaw, my expectation is that BigLaw is likely to be more advanced with use of AI solutions at this stage.  The majority of commentators see AI as an enhancement of existing capabilities, allowing services to be provided more efficiently and effectively, rather than a replacement of traditional client-facing legal services.  There will always be an important role for the experience and human judgment which is an inherent part of good legal advice.”  Notably, Baker & McKenzie recently announced a partnership in AI with US company eBrevia
• Vario from Pinsent Masons — In an email interview for this article, Director Matthew Kay explained that: “As part of Pinsent Masons, Vario has access to the firm’s entire suite of innovations, including SmartDelivery, which means that Vario lawyers can call on our bespoke technology, process and know-how to support client assignments.  The SmartDelivery suite includes over 1,200 automated document templates, bespoke AI-driven workflow and matter management tools, client relationship and project management portals, and market-leading AI document review applications.”
• lexvoco — Claire Vines, Head of Technology and Senior Legal Counsel explained in an email interview for this article that: “We [lexvoco] see AI as playing a broad role in the “NewLaw” legal technology space, particularly for in-house legal teams where AI can be used to augment rather than replace traditional in-house legal activities such as risk analysis, work allocation, and financial forecasting.”
• Axiom — Addressing the issue of Axiom’s R&D focus — Kirsty Dougan, Head of Axiom in Asia – explained via email that the firm will be “shaping how state-of-the-art techniques in machine learning can be applied to contracting work.  In particular, the goal is to move from finding clauses to interpreting clauses, which promises to dramatically improve the speed of contract analysis, enable more powerful insights, and ultimately deliver the capability of creating new bodies of contracts faster, and with higher quality.”  Notably, in a lengthy article published in Above the Law yesterday, Robert Ambrogi interviewed Paul Carr, a senior executive overseeing Axiom’s AI efforts.
• KorumLegal — Titus Rahiri, Director and Consultant explained in an email interview for this article that: “KorumLegal understands and appreciates the value of AI and other advanced technology as we seek to increase efficiencies in legal services and legal operations and we are constantly looking for innovative ways to implement current technology to help our clients – as well as our own business. ​While ​AI is still in its infancy in legal services​, ​we recognise it​s​ potential to streamline legal processes in the future – alongside other increasingly useful applications of Blockchain including decentralized autonomous organisation, smart contracts and the Internet of Things (IOT).  ​KorumLegal has adopted AI in ​to our own systems and processes including through our CRM, advanced data analytics and an AI personal assistant. A​s a nimble, agile and ​lean​ technology enabled legal solutions provider​, we ​will continue to keep our finger on the pulse as we assist our clients with LegalTech solutions,​ collaborate​ with third party LegalTech providers – as well as develop our own technology solutions.”
• CaseMine — Asia-Pacific region startup entrepreneur Aniruddha Yadav founded this India-based startup — which is helping lawyers and law firms adopt AI via virtual legal research assistant, CaseIQ.  Yada’s invention helps firms “automate mundane tasks that are largely the responsibility of lawyers”, as Suparna Dutt D’Cunha reports in Forbes.  
• Surukam — Earlier this year, Richard Tromans, writing in Artificial Lawyer blog, profiled this India-based legal AI startup.  
• Loom Analytics – With offices in New Delhi and Toronto, Loom Analytics is seeking to deploy AI-driven solutions in legal services on a global basis – as Anirudh Bhattacharyya reported recently in the Hindustan Times.  Interestingly — writing in Analytics India Magazine earlier this, Richa Bhatia posed the question: Will Artificial Intelligence become the ‘new normal’ in India’s legal sector?
• Intelllex of Singapore — As the Straits Times has reported,  Intelllex is using AI and machine learning to “solve the problem of knowledge management” — “us[ing] a search algorithm that understands legal case relationships so that it offers more relevant cases, commentaries and statutes across countries.”
• Dentons, Yulchon, King & Wood Mallesons and Cyral Amarchand Mangaldas —  In an article last year in Asian Legal Business, Ashima Ohri identified more Asia-Pacific region legal services firms pursuing AI as a means to more effectively meet client needs and remain optimally competitive — including Dentons.  Jane Croft, writing earlier this year in the Financial Times, identified Korea’s Yulchon and China’s King & Wood Mallesons as also pursuing unique AI initiatives.  Earlier this year India’s Cyril Amarchand Mangaldas “adopted Canada-based machine learning legal system Kira”, as Forbes has reported.

Looking ahead: R&D, tech advances seen as essential to AI’s future impact

Among expert observers of the business of law in Asia-Pacific opinions vary as to the sustainability of AI-related R&D and the novel nature of AI within NewLaw.  Here are some of those opinions:

• In an email interview for this article Dr Peter MacMillan, Founder & CEO of Meisterline Analytics and a frequent commentator on the BigLaw/NewLaw competitive dynamic observed: This form of contract-review software is becoming firmly entrenched in the legal industry. Axiom’s announcement is, generally speaking, neither unexpected nor as much of a differentiator as it would have been only a couple of years ago. Whether Axiom’s specific use case might result in new efficiencies because of the firm’s NewLaw pedigree, remains to be seen. A further announcement along these lines would be something to watch for.
• In an email interview for this article, Dr. George Beaton of Australia’s Beaton Capital and an advisor and investor in NewLaw businesses in the Asia-Pacific region, provided the following insight on the question of whether the adoption of AI by NewLaw is a competitive differentiator: “Yes, for a while use of AI will differentiate providers, then as with all technology, others will catch up and AI solutions will become a benefit expected by clients, and only noticed in it’s absence. The only way –  for some – to make AI a defensible differentiator will be to invest in R&D.  This is will be for the very few and I doubt Axiom will be one of these.”  And on the question of whether AI is truly significant in NewLaw and legal services, Dr Beaton explained: “Not yet. I see a time in 3-5 years probably when the answer will be ‘definitely’ for both…NewLaw firms and traditional (as I call them ‘remade’) legal services providers.”
• As Australia-based Peter Connor, Founder of AlternativelyLegal observed in an email interview for this article: “Legal service providers that adopt a technology-led approach can differentiate themselves from those that adopt a technology-enabled approach because they can offer more value to clients over and above legal services. Axiom’s Iris software platform is a great example of a technology-led approach and it looks like they may have taken it one step further with Axiom AI.”

Looking ahead

What is the future of AI in legal services in the Asia-Pacific region?  And what other law firms or legal services organizations are currently innovating with AI in Asia beyond those listed above?  Is the future significantly limited by AI technology itself? Or will R&D efforts help create technological advancements which bring AI into more areas of legal practice?