Venture capital money keeps flowing to promising new tech companies that are working to automate many of the routine tasks conducted highly-paid 20-somethings at big city corporate law firms. The latest example, from Bloomberg:
Could the armies of lawyers needed to close billion-dollar deals soon be a thing of the past?
That’s what Invoke Capital, the London-based venture firm run by former Autonomy Plc Chief Executive Officer Mike Lynch, is betting with its latest project financing. Invoke said Wednesday that it’s making an investment in Luminance, a U.K. startup using artificial intelligence to process legal documents and automate due diligence in mergers and acquisitions. […]
Luminance says its software can read and understand hundreds of pages of legal documents a minute, enabling lawyers to carry out due diligence far faster than previously. Sally Wokes, a partner at Slaughter and May who works on large company mergers and who helped trial Luminance, said the firm found that completing due diligence while using the system was as much as 50 percent faster than doing the same document reviews using only humans.
Over the last several decades, the bulk of the dislocation wrought by globalized finance capitalism and technological innovation has been concentrated on less-skilled workers, who have faced downward wage pressure from automation and outsourcing, while sectors like law, banking, and consulting have reaped a disproportionate share of the benefits. But as computer technology continues to cross new frontiers, even high-skilled professional jobs may be affected.
Big law firms are especially overdue for disruption. Hourly rates for corporate clients have been soaring, raising prices for consumer goods. And the cartel-like American Bar Association has actively shielded firms from competition at the public’s expense. Enter algorithms, exit lawyers: The next stage of the information revolution may end up looking more egalitarian than the last.