Is the over-priced and smug legal profession the next target for uberization and internet disintermediation? The Financial Times reports:
In the US in 2014, 74 firms enjoyed profits per partner of more than $1m, with Wachtell, Lipton, Rosen & Katz, the highest earners, turning in profits per partner of $5.5m, according to the journal American Lawyer.
While many see the mismatch between what top lawyers earn and what most can afford to pay as a problem, others see it as an opportunity. The legal profession, they say, is ripe for disruption. Cab drivers in London are, like lawyers, highly trained; mastering “The Knowledge”, the layout of the city’s streets, takes several years. But the cabbies’ high-quality, high-price service has been upended by Uber, the app-based taxi hailing system that has brought a flood of lower-cost drivers, using satellite navigation, on to the roads.[..]
NextLaw is backing legal technology start-ups. Its first investment was Ross Intelligence, a Palo Alto-based start-up launched just over a year ago by Jimoh Ovbiagele and Andrew Arruda. Ross is using IBM’s Watson artificial intelligence system to do some of the research currently done by junior lawyers. The pair decided to focus first on US bankruptcy law because they thought it was an area of legal practice that was recession proof. “Bankruptcy is always around,” Mr Arruda says.
How does their system work? Say you are a small company, Mr Arruda says, and one of your clients has gone bust. You suspect there are one or two legal cases that will help you recover what you are owed. Whereas a lawyer would have to scroll through precedents, possibly using a computerised keyword search, the Ross system will rifle through thousands of documents to find what the company wants.
The Ross system is in its infancy, as are most of the products that their champions hope will transform the legal business.
The FT‘s focus on big London and New York firms’ billing practices is eye-catching, but the poor and middle class who need lawyers in places like Fresno are the ones who will really benefit from this sort of technology. A merger between two global corporations may need specialized advice that makes expensive, bespoke advice from a team of lawyers worthwhile. Divorces, benefits disputes, or small corporation bankruptcies in middle America, on the other hand, will be much more amenable to standardization and technological assistance.
Furthermore, these are the groups that are having the most trouble affording legal help right now. There’s a huge market to be opened there—and a lot of people to be helped. And we could—and should—go a step further: if we were to pair this kind of technological advancement with legal educational reform, you could really take a quantum leap forward in increasing the access of the privileged to legal assistance.