Regulating automated legal advice technologies

The Regulating Automated Legal Advice Technologies (RALAT) project is an initiative of the Melbourne Networked Society Institute, involving a team of researchers from law and computer science. Our first Discussion Paper, which aims primarily to map the field is available here.

RALAT CaptureThe paper classifies automated legal advice tools/technologies (ALATs) by reference both to function and intelligent capability. Functionally, it identifies five subsets of technology:

• Specialised standalone technologies, such as legal chatbots, apps and virtual assistants,

• Enablers of legal advice such as legal automated drafting, legal document review and legal algorithms,

• Further enablers of legal advice such as legal data analytics and predictors, and legal artificial intelligence,

• Automation of legal advice with truly smart contracts, and

• Sets of ALAT technologies enabling NewLaw business models and legal technology companies.

In terms of capability, a range of technologies are found to exist from simple non-AI tools relying solely on hard-coded decisions through to “smarter” or “more intelligent” sophisticated technologies that use deep learning and can parse text, learn causations and correlations from data, and reason about these to make predictions.

We find that the market in ALATs is developing rapidly. Most applications have entered the market since 2014, with the greatest activity in the US – likely reflecting the greater availability of venture capital. ALATs are both new and at varying levels of sophistication, with the majority at the lower end of the ‘intelligence’ scale.

ALATs are identified as a critical technology in terms of market disruption. The giving of legal advice is a central function of the legal profession. ALATs create opportunities, notably of commoditisation of advice-giving. The potential for automated legal advice to reduce costs and open-up latent markets is significant, particularly in the context of current debates around declining access to justice. ALATs also highlight challenges to market incumbents across the industry, for example, as technical legal expertise becomes increasingly open to automation. US corporates like LegalZoom and Rocket Lawyer are examples of ways non-lawyer entities may seek to enter and disrupt traditional markets for smaller business and consumer legal services. Policy questions arise as to the risks such disruptors may pose to consumers, and how regulation should respond (if at all).

The challenge to legal services regulation posed by ALATs is explored in sections 3 and 5 of the paper. Section 3 introduces the problem in terms of the wide definition of legal practice in Australia, which reserves legal work to the legal profession. This section also explains how regulation demarcates the provision of (unregulated) legal information from (regulated) legal advice-giving. This regulated boundary between information and advice could prove to be a critical zone of engagement, determining the impact of new market entrants, including unregulated disruptors. While controls on advice-giving have consumer safety justifications, the development of automated intelligence potentially changes the risk environment. To this extent, automation re-opens important questions regarding the scope and proper function of legal services regulation.

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The Law Society of New South Wales, ‘FLIP Report’: some initial thoughts

The Future of Law & Innovation in the Profession (FLIP) commission of inquiry took place last year as an initiative of The Law Society of NSW. Its final Report, available online here, which was published last month adds to the growing collection of recent, profession-led, inquiries into the future of legal services, including the American Bar Association’s Commission on the Future of Legal Services (on which FLIP was modelled), and the Canadian Bar Association’s Futures Initiative.

In its own words, the broad aim of the inquiry was to:

better understand the changes taking place in and around the legal profession and to provide the profession with recommendations that will enable lawyers to better
accommodate new concepts and ideas, and adapt to changes that are taking place…

As the title suggests, its change focus is predominantly shaped by its legal profession orientation, and by the profession’s continuing fascination with technology and process innovation/disruption. This of itself, of course, shapes and skews the nature of the inquiry (something I’ll say more about later). Nonetheless, the FLIP Report 2017 is an interesting, informative and very clearly argued presentation of some critical issues facing the profession in NSW, and, one must suspect, Australia more generally. In this short review, I offer some initial reflections on the value and insights of the process. In subsequent posts I will focus specifically on two areas of the report that are of particular interest to me: its observations on professional regulation and legal education.

The inquiry was organised as an exercise in thought leadership. It did not commission research, and it’s not clear how extensive a review it undertook of the voluminous literature, though there are useful end of chapter references, and a short bibliography. It structured itself as a commission of inquiry and took evidence, both orally and in writing from a range of ‘witnesses’. This worked well in terms of producing a focussed and often pithy report, with some useful quotes and insights from many who are innovators and thought leaders in the field. At the same time, this methodology also placed the onus on the ‘commissioners’ to inquire deeply and thematise the evidence effectively. This is a demanding task, and in these respects the Report is sometimes a little lacking. For my money, though it acknowledges (astutely) the fundamental nature of the questions change raises at the intersection of “jurisprudence, ethics and technology” (p.45), it does not engage deeply enough with the capacity for technology to transform not just process but the form of law itself. Blockchain in this respect (which is discussed in the Report) is really just the tip of an iceberg.

Moreover, the profession-centric nature of the process has its limitations. Law is not unique in the challenges it faces, and a broader ranging inquiry might have helped the commissioners take that deeper and longer view. The great majority of the 103 witnesses were from within the legal profession and legal academia: the inquiry could have heard more widely from experts in other professional service sectors, and the consumer voice is also somewhat lacking. The focus at times is rather protectionist (I’ll say more about this in the post on regulation). Consequently, while the Report (chapter 4) rightly highlights both the potential for technology to facilitate access to justice, and the risks of continuing under-investment in technology for personal legal services, the potential for technological and regulatory disruption and deprofessionalisation to enhance (alternative) access to justice remains something of an elephant in the room.

The Report makes a total of 19 ‘Key Recommendations’ which are framed as actions for the Law Society. A number of these are, as one might expect, useful but fairly unexceptional ‘inform’ and ‘advocate’ recommendations, but two structural initiatives in particular are of wider interest, and reflect the influence of US thinking on the Report. First, Recommendation 2 calls on the Law Society to establish a “centre for legal innovation projects” to raise awareness, conduct research, develop training and create and participate in strategic partnerships (interestingly universities are not mentioned in the range of prospective partners) in respect of legal technology and innovation. Secondly, Recommendation 3 invites the Law Society to “consider establishing an incubator in New South Wales dedicated to technology-enabled innovation in the law”. Both of these initiative are to be welcomed, but at the same time, their potentially limited scale and reach must be acknowledged. The Law Society is not the ABA, and individual state-centred initiatives are not going to have either the resources or the reach of a national centre or national incubator initiative. A recommendation that the Law Society commit itself to collaborating nationally on such initiatives with the Law Council of Australia and other state representative and co-regulatory bodies, would have been groundbreaking, as well as offering the profession considerably more bang for its buck, but, I guess, may have been less ‘positionally’ attractive, and/or less of a ‘headline’ for the Society.