How AI and machine learning are impacting global legal software
The legal tech arrtificial intelligence market was valued at around $3.245 million USD in 2018, and this is expected to climb to $37.85 million USD by 2026. This gives the legal tech AI market an incredible 35.94 percentt CAGR (compound annual growth rate).
Globally, it is the Asia Pacific region that has held the most market share, and this is expected to continue. China has contributed the highest amount of revenue to the legal tech AI market in 2018.
North America is expected to grow considerably in the next few years, due to the presence of key companies that are making large investments into the AI market. The U.S. is contributing the largest market share in North America, as there is a strong infrastructure for advanced cloud and blockchain technology.
The European legal tech AI market will also grow, as there is a burgeoning focus on growth in cloud-based legal AI solutions.
Legal service companies leading the way
As far as companies leading the way in the legal tech market, online legal services companies certainly seem to be seeing the most growth. For example, LegalZoom has around 4 million users and is valued at around $2 billion USD. The company’s services include helping customers create legal documents, without the necessity of hiring a lawyer.
LegalZoom is considered a major innovative disruptor within the legal industry, with groups like the American Bar Association being mired in debates as to whether services like LegalZoom are a friend or foe to the lawyer industry. It should be noted that LegalZoom does in fact offer a directory listing of attorneys, at least within the United States.
Within the actual law firm industry, a lack of awareness regarding machine learning is hampering progress. In a survey conducted by Bloomberg Law, only 24 percent of law firms are currently using machine learning or AI.
This is partially a budget issue, as well as a lack of tech-savvy within the law firm industry. Machine learning is seen as the work of geniuses, even though some of the most efficient machine learning and AI frameworks are coded in relatively simple programming languages, such as Python.
Global adoption of artificial intelligence in the legal industry
All of the above mentioned predicted growth isn’t without some careful considerations. On Sept. 21-22, an 80-plus participant “AI and the Rule of Law Roundtable” was hosted in Athens, Greece. The roundtable was co-hosted by the Institute of Electrical and Electronics Engineers, the Future Society, the European Law Observatory on New Technologies, and the law firm Covington & Burling.
The primary discussions at this roundtable revolved around holding high ethical standards when implementing AI tools in law firms, government, and business. The debate also focused on how to ensure that AI tech will work as intended, and how to determine whether those who implement and operate AI tools are competent to do so.
The Council of Europe and the IEEE have recently set standards for how AI can be applied in law, to protect citizens from misuse. Their aims are that legal tech still respects human rights and privacy, even while processing and analyzing personal data related to criminal cases.
The IEEE concluded that four principles must be adhered to when AI is adopted in legal settings. These principles are that AI systems should be effective, the people who design them must be competent, people must be held accountable should AI tools result in biased or “undesirable” outcomes, and AI-enabled processes must follow transparency.
While there was a general consensus amongst the Roundtable participants that certain standards should be met, and that collaboration among stakeholders is important to develop the guidelines for adhering to ethical principles in regards to AI, not all attendees were in agreement.
Mark Lyon, chair of Gibson, Dunn & Crutcher’s AI and automated systems practice group, had a different concern to voice:
“Some EU stakeholders seemed to want to legislate or regulate AI-based systems now, without waiting for the technology to mature further, whereas some U.S. stakeholders seemed to think that premature regulation was potentially worse than no regulation and that we should allow the technology and standards processes to move closer toward realization before defining the legal framework.”
Despite some differences in opinion at the Roundtable, there was a clear consensus, which hosted representatives from about 20 countries, that there does need to be ethical standards regarding the implementation of AI, and that the Roundtable should be formalized into an annual event.