These four technologies are disrupting the legal world. Will they work in India?

These four technologies are disrupting the legal world. Will they work in India?

Varun Marwah

The legal profession, may be averse to change but it certainly is not immune from it. Technology is changing the law and the legal sector in many, varied ways. The rate of change may be slow, but change there most certainly is. Inside Counsel, recently did a story on four technologies that are disrupting the legal tech.

Some of these may very well become a reality in India as well.

Some parallels can be drawn with the development of several fintech platforms in India. However, unlike the legal sector, this development was raised by the fact that the financial sector is faster to lay the foundational infrastructure in place, as it has done with ERP (enterprise resource planning), which in the 90s, failed for organizations didn’t ‘rewire’ themselves to suit it.

But before legaltech can have its analogous fintech “moment”, the legal industry needs to make headway on a services-led, but tech-enabled approach to industrialization. In other words,  we have to build the factories before we can embrace the tools that make the factory better!

1. Blockchain

According to Joichi Ito, Director at MIT, and early investor in Flickr, Twitter,

The blockchain will be to banking, law, and accountancy as the internet was to media, commerce, and advertising. It will lower costs, disintermediate many layers of business and reduce friction

Blockchain is a distributed ledger of transactions, free from centralised authority and maintained by market participants. It is immutable i.e. the transaction is recorded for all time and cannot be altered by third parties. It enables two entities that do not know each other to agree that something is true without the need of a third party.

For a lawyer, Blockchains can be used to replace anything that needs authentication or a signature.

It is important for a lawyer to learn and adapt this technology, since clients will increasingly be adopting this technology in the future. This will, predictably, give rise to a host of associated legal issues as well. Especially for those engaged in the financial and securities sector, this is a technology whose potential simply cannot be underestimated.

Possibility of being introduced in India: 4/5

Recently, ICICI Bank became the first in India, and among the first few globally, to exchange and authenticate remittance transaction messages as well as original international trade documents electronically on blockchain in real time.

Not only this, but the then deputy governor Reserve Bank of India, HR Khan, has spoken of constituting a committee of a group of experts, to study the blockchain technology for use in the financial sector.

By replicating the paper-intensive international trade finance process as an electronic decentralised ledger, blockchain gives all the participating entities, including banks, the ability to access a single source of information.

Some examples of early adoption include the (i) Honduras government which (is expected to) record all change in land ownership on a public ledger- the blockchain; (ii) The Australian Securities Exchange (ASX) that has made an announcement, it would move Australia’s equities clearing and settlement system on to blockchain.

Given that banks are always engaged with law firms in one way or the other, it only makes sense for the lawyers to adapt to this technology, the sooner the better.

2. Artificial Intelligence/ Machine learning

Much has been spoken of IBM Watson powered ROSS- the Artificial Intelligence (AI) lawyer- and it’s resultant impact on the legal industry. But only time will tell the manner in which this technology will be adopted by law firms; by automation or augmentation?

A commonly held belief is that the tasks done by paralegals and junior associates will be taken over by AI, while tasks that require a certain amount of legal expertise and judgment will vest with lawyers. The central argument being that no technology can ever match tasks that require legal judgement and expertise.

Possibility of being introduced in India: 3/5

The reason why it is being increasingly adopted by law firms abroad is due to greater awareness among clients; who are now more involved (or at least informed) about newer technologies and its associated cost benefits.

Given that the hourly billing model surely burns a hole in the Indian client’s pocket, we can only (safely) assume that the Indian client won’t be far too behind. However, given that this technology is still being slow to spread in mature legal markets, it will be some time before AI really takes off in the country.

3.  Legal analytics.

Legal analytics will make you a great lawyer by the clichéd standard of,

A good lawyer knows the law, but a great lawyer knows the judge

For instance, machine learning can be applied to orders passed by a particular judge, to cull out trends and habits, which will enable lawyers to tailor their arguments. This is being viewed as a win-win in the United States where the judges feel lawyers aren’t repeating the same mistakes over and over again. Similarly, it can be applied to orders passed by regulators to see what kind of applications are being accepted and rejected.

‘Big data’ i.e. large sets of scattered data are inherently present in the legal sector. What legal analytics does is, analyses this ‘big data’ to establish relevant patterns. These patterns, can allow lawyers to structure their research in a more meaningful way, and provide clients with more concrete predictions as opposed a clinical method wherein lawyers predict outcomes, mostly of litigation, based on their opinions or experiences.

Possibility of being introduced in India: 4/5

This can be a replication of what Lex Machina (acquired by Lexis Nexis one year back) has done in the States- creating structured data sets from public data, such as PACER (Public Access to Court Electronic Records), to help lawyers predict the outcomes of different legal strategies by mining, tagging, categorizing and enhancing millions of federal court dockets and documents.

An application of this technology to the Manupatra database, for example, can go a long way. In fact, there is  (at least) one such organisation already providing legal analytics in India- Y point analytics.

4. Cloud computing

Cloud computing has several benefits attached to it, including lowered costs, universal access, and relatively simple set up and configuration.

It allows firms to ramp up storage, computing capability, and add or remove features without having to incur any significant capital costs. One of the more common forms of using cloud computing is the exchange of large-sized documents/information, between clients and lawyers.

Cloud computing, however, comes with its own set of concerns i.e.those relating to security and confidentiality. If adopted, cloud computing requires requires law firms to share confidential data with third party service providers, which if breached, could violate attorney-client privilege.

While there are several services which do provide high level encryption of information, what must also be accounted for other concerns such as internet connection failure, server maintenance failure, temporary/permanent loss of access to data.

Of course, these issues are not limited to law firms alone.

Possibility of being introduced in India: 5/5

This is, in fact, being used by Indian law firms in one way or the other. Law firms often use it to transfer/receive large data files to/from clients. The question is just, to what extent will it be adopted.

(Image: Source)

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