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Unlocking the Potential of Artificial Intelligence Unlocking the Potential of Artificial Intelligence

Unlocking the Potential of Artificial Intelligence - PowerPoint Presentation

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Unlocking the Potential of Artificial Intelligence - PPT Presentation

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

legal 2019 sako mari 2019 legal mari sako oxford university law technology earning business lawyers firm fee data providers

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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

Slide2

Research 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

Slide3

AI 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

Slide4

Numerous AI applications in law…

(c) Mari Sako, University of Oxford 2019

Source: The Law Society (2019)

Legaltech

Adoption Research

Slide5

Question 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

Slide6

Question 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

Slide7

How is AI affecting law firms?

(c) Mari Sako, University of Oxford 2019

We focus initially on automation using supervised machine learning (ML)

Slide8

Two 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

Slide9

Question 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

Slide10

Two 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

Slide11

Question 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

Slide12

Question 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

Slide13

Our (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

Slide14

Value 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

Slide15

Business 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

Slide16

Thank you for your attention!Mari.sako@sbs.ox.ac.uk