in English Law Professor Mari Sako Saïd Business School University of Oxford Glenlegal Conference 4 March 2019 2019 Research Programme 20192020 Funded by the Industrial Strategy Challenge Funds ISCF Next Generation Services Research Programme and UK Research and Innova ID: 803809
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Slide1
Unlocking the Potential of Artificial Intelligence in English Law
Professor Mari Sako Saïd Business School, University of Oxford
Glenlegal
Conference, 4 March 2019 2019
Slide2Research Programme 2019-2020
Funded by the Industrial Strategy Challenge Fund's (ISCF) Next Generation Services Research Programme and UK Research and Innovation (UKRI)Researchers from Law, Economics, Computer Science, Education, and the Business School
Five work packagesWP1: New business models in legal services (we focus on corporate legal services (B2B))
WP2: Mapping digital justiceWP3: Frontiers of AI in legal reasoningWP4: Coordinating skill investment and technology transferWP5: Legal and technology educationFurther details:
www.law.ox.ac.uk/research-and-subject-groups/unlocking-potential-artificial-intelligence-english-law/(c) Mari Sako, University of Oxford 2019
Slide3AI in law: what is at stake?
International competitiveness of UK jurisdiction
(c) Mari Sako, University of Oxford 2019
Growth in lawyers in England & Wales
Source: Law Society and approved regulators
Slide4Numerous AI applications in law…
(c) Mari Sako, University of Oxford 2019
Source: The Law Society (2019)
Legaltech
Adoption Research
Slide5Question 1: Benefits of AI
What are the top three benefits sought from adopting AI in your firm?Enhance the quality of service delivered to your clientsRetain clients against competition from other providers
Increase internal efficiency by optimizing business processesProvide new services through data analysis and insightProvide alternative career paths for associates
Improve recruitment and retention of employeesOther (SPECIFY)Don’t know
(c) Mari Sako, University of Oxford 2019
Slide6Question 2: Barriers to adopting AI
What are the top three barriers to adopting AI within your organization? Lack of client demand
Client concern about giving access to, or storage of, dataLack of buy-in from key decision-makers inside the firmNervousness inside the firm about negative impact on skills and roles
Insufficient employee skills to use AI effectivelyDifficult to decide which AI platform to commit toHigh costs of initial proof of concepts, licensing and platform feesCosts of training/customising AI products for application by the firmAbsence of financial metrics to justify investment in AI
AI technologies for legal applications are not yet robustOther (SPECIFY)Don’t know
(c) Mari Sako, University of Oxford 2019
Slide7How is AI affecting law firms?
(c) Mari Sako, University of Oxford 2019
We focus initially on automation using supervised machine learning (ML)
Slide8Two key questions in our research
How is AI technology impacting professional knowledge and legal careers?How does AI adoption affect law firms’ governance choices as they shift their business models?
(c) Mari Sako, University of Oxford 2019
Slide9Question 3: Talent
How many non-fee earning professionals does your firm employ relative to fee-earning lawyers? Fee-earning lawyers > non-fee earning professionalsFee-earning lawyers = non-fee earning professionalsFee-earning lawyers < non-fee earning professionalsDon’t know
NOTE: Professionals who are not fee earning include business development managers, project managers, knowledge management professionals, data scientists and technology experts.What proportion of your client-facing fee earning professionals are non-lawyers?
NoneLess than 1%1% - 5%6% - 20%21% - 50%More than 50%
(c) Mari Sako, University of Oxford 2019
Slide10Two key questions in our research
How is AI technology impacting professional knowledge and legal careers?
How does AI adoption affect law firms’ governance choices as they shift their business models?Business model: the way a firm creates and captures valueGovernance
Intra-firm governance (partnerships and alternatives)Inter-firm contractual governance
(c) Mari Sako, University of Oxford 2019
Slide11Question 4: Data and technology
From where do AI models that your firm train come from? Tick all that apply.Own modelVendor modelClient modelOtherOn which data does your firm train models? Tick all that apply.
Own dataClient dataData from providers (e.g. LexisNexis, PLC, Westlaw)Public data (e.g. SEC filings, court decisions)
How is AI investment funded at your firm? Tick all that apply.Retained earningsClient disbursementLoansEquity stake in technology and data providers (e.g. legal tech startups)
(c) Mari Sako, University of Oxford 2019
Slide12Question 5: Build or Buy?
What is your firm’s preferred strategy for legal technology, including AI? Tick all that apply.Create an in-house legal technology team in the firmCreate a separate legal technology subsidiaryTake an equity stake in tech firms, including via incubatorBuy from vendor
Collaborate with a vendorCollaborate with a clientCollaborate with other party (e.g. academic institution)
Not yet decidedDon’t know(c) Mari Sako, University of Oxford 2019
Slide13Our (interim) answers
How is AI technology impacting professional knowledge and legal careers?Value
migration from humans to computers Sell products as well as servicesValue migration from lawyers to non-lawyers
variety of career progression routes; hierarchical control, not peer control, inside law firmsHow does AI adoption affect law firms’ governance choices as they shift their business models ?
External funders preference for ownership form with access to external investors
Technology and data providers
contractual governance is becoming more important
(c) Mari Sako, University of Oxford 2019
Slide14Value migration in the legal ecosystem
(c) Mari Sako, University of Oxford 2019
Alternative legal service providers (ALSPs) include:
LPO providers
Big Four
Managed legal service providers
Investors
Data vendors
Professional associations
We will study value migration within organizations (from lawyers to non-lawyers), and between organizations.
Global market size
Global legal: $850 billion (2017)
ALSP: $10.7 billion*
Value migration drivers
Insourcing by general counsel
Demand for greater efficiency and transparency
Shift from input-based to output-based pricing
* Alternative Legal Service Providers 2019
Slide15Business model and governance options for law firms
Which (mix of) models will emerge as dominant in the market?
(c) Mari Sako, University of Oxford 2019
Slide16Thank you for your attention!Mari.sako@sbs.ox.ac.uk