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Technology and the Coming Changes for Attorneys

Blockchain, Innovation, Interviews, Opinion | August 14, 2017 By:

Dean Sonderegger is the VP of Legal Markets, Innovation at Wolters Kluwer Legal & Regulatory US, a division of global information services company Wolters Kluwer. He contends there are changes coming to the legal profession wrought by blockchain, artificial intelligence, and other disruptive technologies.

Sonderegger discusses the impact on attorneys and the public that may emerge in the coming years from the power of big data and the ability to harness insights via algorithms and blockchain.

BLOCK TRIBUNE:  So, tell me, do lawyers have a future?

DEAN SONDEREGGER:  I think that lawyers have a future for quite a while. But the nature of what they do is going to change somewhat. So I think there’s a lot of repetitive tasks that lawyers pursue that don’t really add a lot of value, other than the fact that they’re obviously qualified to do them, but there’s things that you could definitely program something to do. So I think you’re going to see some of the lower-value attorney work start to get taken over in time by artificial intelligence tools, and then I think that there’s certainly the opportunity for disintermediation around where lawyers play the role of an intermediary, for real estate transactions and other things like that. I think those are things which you’re going to see disintermediation on.

If you look at other markets, like the tax accounting market, which has gone through some of this disruption already, if you can use that as a gauge, what you’ll see is that the demand for lawyer services will probably stay about the same. But what you’ll see is a lot of people getting access to the law that aren’t currently able to, through better tools. And then I think that you will also see that the number of attorneys that provide the same volume of work is going to drop down.

BLOCK TRIBUNE:  What does this mean for paralegals and other support people like legal secretaries? Are their jobs going to go away?

DEAN SONDEREGGER:  I think you’re going to see the paralegal profession change a little bit. I think a lot of the administrative jobs are going to go away and have already started to go away. But I think for paralegals, you could see a future where well-educated paralegals that have a great set of tools that help them do legal tasks, I think you’ll see an analog to what you see in the health care profession right now, where you have nurse practitioners. I think you’ll see a similar kind of thing come along where you have paralegals actually doing a lot more practicing of law than they are right now, aided with tools.

BLOCK TRIBUNE:  That’ll obviously mean that laws will have to change, correct?

DEAN SONDEREGGER:   Yeah, obviously you would have to have a change or an evolution in licensure for that to occur. Absolutely.

BLOCK TRIBUNE:  Government is a big employer of lawyers. What will this mean to our government’s bureaucracy? Will we see it shrink, or just morph?

DEAN SONDEREGGER:  Boy, that’s an interesting question. You think about the attorneys, from a regulator standpoint…. I don’t think you’re going to see it shrink. I think you’ll see it change. I think you’re going to see a lot better access to information, and so as a result of that, I think you’re going to see an ability to provide regulatory oversight in the way that we haven’t had up until this point in time. And I think that you’ll see again, the nature of the jobs they do will change a little bit because they’re going to have much better tools to help them. But I think it’s a stretch to think right now that you’re going to see substantial shrinking of the government.

BLOCK TRIBUNE: Are there any specific areas of legal practitioners that won’t be hurt more than others? For example, estates and trusts. Or you mentioned real estate before. Any areas that you see that are just going to morph into something where it’s highly unlikely that there’s going to be a lot of employment opportunities?

DEAN SONDEREGGER:  Yeah, I think that your simple transactions, so you think about wills, estates and trusts as a great example of that. Real estate is another great example of that. I think you can think about (changes) from purchases of real estate to things as simple as a residential lease. A lot of employment law. I think you’ll see the transactional side of that will become much easier for people to do without hiring a lawyer on a time and materials kind of basis, if you think about that. So I would think, and you’re already seeing a little bit of this with some of the commercial sites that are out there, like Rocket Lawyer, where you can go up and really get an estate or trust drafted without a whole heck of a lot of labor, I think you’ll see a whole lot of work from an attorney. So I think you’ll see those things start to suffer.

I think you’ve seen, to some extent, that in the legal markets right now, where larger firms – employment law, for instance – where there’s not been a lot of change in the law, you really see the larger firms starting to divest themselves from that practice area, because there’s not a lot of things that they can add that justify high billing rates there.

So I think those are the areas that you’ll see things struggle with, or people suffer a little bit from an employment standpoint. So your small lawyer, family law kind of businesses. I think that your large M&A transactions, which are multi-billion dollar transactions, are still going to do quite well. You’re going to still have those things. There’s so much money associated with them and so much risk that you’re going to have highly trained attorneys in those positions doing quite well. But I think a lot of the smaller stuff you, will see a contraction.

BLOCK TRIBUNE:  What does this mean to the judges of the world? Will we some day have to go in front of a computer and give our recitation, and then have the computer issue something?

DEAN SONDEREGGER:  I think litigation’s kind of a different thing. I think that, at least at this point in time, there is a fair amount of latitude of judgment that goes into this, that at this time I don’t see artificial intelligence tools being able to take over. You’d certainly see both the courts and the attorneys on both opposing sides having really great tools to be able to look into precedents and what other cases and decisions had been made. But law’s an evolving animal. It evolves based on precedent, it evolves based on changes in our society. I think it’s very hard to encode that at this point in time, so I don’t anticipate a point in time where you see us not having the current kind of judge environment. I just think that they’ll be working with better tools.

BLOCK TRIBUNE:  How will the study of law change?

DEAN SONDEREGGER:  Well, it’s already changed, right? So if you look at law schools right now, there are a number of law schools that have classes on legal tech at this point in time, and on analytics and statistics. So I think that the nature of law is much more ingrained in technology than it has been. So I think that you already see that starting to change in the classrooms. Obviously, the tools that you use in class and the study of law will change also. So I think you’ll get away from it being a situation where you are studying everything by hand. You’ll get used to using some of these tools in the study of law.

The other thing I think you’d see is that there’s been a movement already in the study of law to focus more on the transactional practice of law, so law firms tend to complain that students come out of law school unready to practice. They understand the fundamental things, but they’re really not ready to practice. So I think you’ll see law schools with more and more focus on the practical application of the law, and we call that kind of concept “prepare to practice.” And a lot of that involves taking these tools into the classroom in a change to the curriculum and the way things are taught. So I think you’ll see that’s already started to change, but I think you’ll see a lot of that happen over the next 10 to 20 years.

BLOCK TRIBUNE:  What about the human element? For somebody who needs legal services in a decentralized world, will respect for the law change?  Where machines are running things, and things like the blockchain are decentralized, what does that mean for the average citizen and their respect for the law? They obviously have to follow the law and the jurisdiction that they’re in, but do you think people’s attitudes towards it will morph at all?

DEAN SONDEREGGER: That’s an interesting question. As you referenced, the blockchain and the cryptocurrencies, one of the things that’s great about them is that you might be in a situation where you don’t have that same level of expectation around the rule of law, and it provides some level of assurance, some trust in a place where you might not otherwise have trust. I don’t think it really changes your attitude. I don’t see it change toward the concept of law. But I think the interesting wrinkle is in an increasingly global society, it becomes much more difficult to understand all the nuances of law in each particular jurisdiction. So you know what you know, which is your local law. Well it’s difficult to project the rule of law into different jurisdictions, and that’s obviously a bigger problem for us as we do transactions across localities. I don’t think it changes your outlook, I just think it makes it much more difficult to grasp the nuances of the various laws in different places, and I think that that in turn gives you a greater need for trust. It’s not the institution that’s giving you trust. You’ve got to have a mechanism for finding assurance and trust.

BLOCK TRIBUNE:  How do smart contracts play into the future of law?

DEAN SONDEREGGER:  Smart Contracts build on top of blockchain technology and have the potential to fundamentally change how certain transactions occur. With a Smart Contract, we can have automatic enforcement of contract provisions for things such as purchase of property, escrow, etcetera. The “contract” is actually coded and put in place on top of a block chain.

I think the interesting thing about this technology is that in order to get widespread adoption, it requires the market to agree on a standard (or set of standards) for a particular type of agreement. If you’re going to code the enforceable portions of a contract into a smart contract, there needs to be general agreement on what those enforceable items are.

This is a place where AI and Big Data can have an interesting role. The most logical means of determining a standard is to look at a large body of contracts of a particular type and distill – clause by clause – what the standard language would be. This may vary across industry and locality, but assuming a large enough data set, one could reasonably build such a standard template for an agreement. Doing so manually creates all kinds of issues – most notably bias from the individual performing the curation.

AI, on the other hand, provides an excellent set of tools to perform exactly this task in an unbiased manner. Wolters Kluwer has done exactly this for M&A agreements and associated contracts and plan to expand across other practice areas of law. We don’t have plans to expand to smart contracts at this time, but it’s a logical and foundational first step to doing so.