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Tuesday, June 3, 2014

McGinnis: The Five Ways Computers are Revolutionizing Legal Practice (and Legal Education)

City Journal:  Machines v. Lawyers: As Information Technology Advances, the Legal Profession Faces a Great Disruption, by John McGinnis (Northwestern):

Big DataLaw schools are in crisis, facing their most substantial decline in enrollment in decades, if not in the history of legal education. Applications have fallen over 40 percent since 2004. The legal workplace is troubled, too. Benjamin Barton, of the University of Tennessee College of Law, has shown that attorneys in “small law,” such as solo practitioners, have been hurting for a decade. Attorney job growth has been flat; partner incomes at large firms have recently recovered from the economic downturn, but the going rate for associates, even at the best firms, has stagnated since 2007.

Some observers, not implausibly, blame the recession for these developments. But the plight of legal education and of the attorney workplace is also a harbinger of a looming transformation in the legal profession. Law is, in effect, an information technology—a code that regulates social life. And as the machinery of information technology grows exponentially in power, the legal profession faces a great disruption not unlike that already experienced by journalism, which has seen employment drop by about a third and the market value of newspapers devastated. The effects on law will take longer to play themselves out, but they will likely be even greater because of the central role that lawyers play in public life.

The growing role of machine intelligence will create new competition in the legal profession and reduce the incomes of many lawyers. The job category that the Bureau of Labor Statistics calls “other legal services”—which includes the use of technology to help perform legal tasks—has already been surging, over 7 percent per year from 1999 to 2010. As a consequence, the law-school crisis will deepen, forcing some schools to close and others to reduce tuitions. While lawyers and law professors may mourn the loss of more lucrative professional opportunities, consumers of modest means will enjoy access to previously cost-prohibitive services. ...

Five key areas of law now face encroachment by this machine intelligence. Some invasions are imminent, and others more distant but no less likely. ...

  1. E-discovery
  2. Computerization of Legal Search
  3. Automation of Legal Forms
  4. Automation of Briefs and Memos
  5. Legal Analytics

Discovering information, finding precedents, drafting documents and briefs, and predicting the outcomes of lawsuits—these tasks encompass the bulk of legal practice. The rise of machine intelligence will therefore disrupt and transform the legal profession.

A relatively small number of very talented lawyers will benefit from the coming changes. These superstars will prosper by using the new technology to extend their reach and influence. ...

But the large number of journeyman lawyers -- such as those who do routine wills, vet house closings, write standard contracts, or review documents on a contractual basis -- face a bleak future. They will have far less to contribute to legal analysis, and they will face relentless evaluation from clients using new data-driven metrics. ...

The rise of machine intelligence is probably partly to blame for the current crisis of law schools -- and will certainly worsen that crisis. While no law school has recently closed, most have lost students and even more have lost revenue, as they discount prices to attract students in a shrinking applicant pool. Financial-monitoring agencies have downgraded the bonds of some schools toward junk status. The job market for law professors, both at the entry and lateral stage, has shrunk.

To match the wide variety of tasks that lawyers will undertake in a world increasingly defined by machines, law schools will need to differentiate themselves in cost and function. No longer can every school aspire to be a junior varsity Yale. Some schools will ask faculty to teach more, even at the expense of legal scholarship, or use adjuncts who write no scholarship, thereby slashing costs. Many schools will substitute videos for some live instruction. They can then redeploy some professors to focus on improving legal writing and problem-solving skills. Negotiation may get more emphasis, as it contains emotional elements that machines cannot easily replicate.

Law schools can seek new revenues by preparing students for the computer revolution in law—providing courses, say, on improving the interface between legal machines and humans. Some schools might also provide shorter courses of study to engineers and computer scientists, who can design the in-house legal analytic tools that many corporations and law firms will require. Here, though, law schools may lose out to business schools, which have traditionally provided a better setting for quantitative analysis.

More fundamental reforms may be necessary to serve an increasingly stratified legal profession. Already some respected legal educators, such as the dean of Northwestern, favor permitting students to take the bar after two years of legal education. More radical proposals -- such as making the study of law a mostly undergraduate prospect, as it is in many countries now -- would save the cost of going to law school altogether.

The most profound long-term effect of the rise of machine intelligence on the legal world may be a decline in lawyers’ social influence. ... The decline of lawyers may therefore prove a boon to the rule of law and to market norms. ... [I]in the Age of Computation, the calculators are gaining on the lawyers—at work and in politics.

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Comments

"The most profound long-term effect of the rise of machine intelligence on the legal world may be a decline in lawyers’ social influence."

The rise of machine intelligence has amplified the influence of corporate executives, financiers, lawyers, marketing professionals, etc.

The machines handle the drudgery and let each knowledge worker do more real intellectual work--the famed thinking like a lawyer that traditional law schools teach. I hardly see how doing document review by hand or comparing documents in the days before automated document comparison increased lawyers social influence any more than looking up bond quotes in newspapers in the days before Bloomberg Terminals amplified financiers' social influence.

And if you actually look at the data, employment of "lawyers" is growing--both in absolute terms and as a share of the workforce, whether according to BLS or Census.

Posted by: Anon | Jun 3, 2014 5:38:39 AM

The gist of this article is conservative wishful thinking based on hostility to liberalism:

"A decline in the clout of law schools and lawyers could have potentially broader political effects. For the last half-century, many law professors and lawyers have pressed for more government intervention in the economy. This isn’t surprising. Lawyers in the modern regulatory state reap rewards from big government because their expertise is needed to understand and comply with (or exploit) complicated and ever-changing rules. In contrast, the entrepreneurs and innovators driving our computational revolution benefit more from a stable regulatory regime and limited government. As they replace lawyers in influence, they’re likely to shape a politics more friendly to markets and less so to regulation."

McGinnis created the Federalist Society.

Posted by: Anon | Jun 3, 2014 5:43:22 AM