Final week, a authorized tech firm Lawhive reportedly bought a UK legislation agency lock, inventory, and barrel. Based on a story about the acquisition, the legislation agency, Woodstock, specializes in property legislation. (In contrast to within the US, UK rules allow non-lawyer entities to personal legislation companies.) This seems to be the primary or at the least one of many first examples of a authorized tech firm shopping for a legislation agency.
The Lawhive Acquisition
The story describes Lawhive as an AI-powered legislation agency. It additional notes that its AI assistant, Lawrence, is designed to deal with numerous duties together with drafting paperwork, conducting analysis, and managing circumstances. Lawhive operates in numerous apply areas together with property. Google is a important investor in Lawhive in line with the story. Lawhive additionally operates within the US.
Amongst different issues, Lawhive guarantees to get quotes for authorized service for its purchasers at as much as half the price of normal legislation companies. And typically for a flat charge.
The Significance and Considerations
The indisputable fact that an AI-based authorized tech vendor owns and controls a legislation agency might have a major influence. Such a vendor would have clear incentive to cut back prices and enhance income by using its AI instruments to do many of the work traditionally completed by legal professionals. It might thereby cut back workers to recoup its funding.The companies historically carried out by the legal professionals and authorized professionals in such a legislation agency would now be completed by AI, changing people as the first supplier of the authorized service provided.
I puzzled in such a case whether or not and the way the work being completed by such an acquired legislation agency sooner or later could be clear to its purchasers. Would purchasers know that AI, not human authorized professionals, was dealing with nearly all of their work? Ought to purchasers learn concerning the vendor’s possession of their legislation agency?
As well as, because the vendor’s AI instruments change into extra sophisticatedand do extra, would correct precautions be taken to protect in opposition to hallucinations and inaccuracies that bedevil all GenAI instruments? Distributors sometimes stretch the capabilities of their instruments and downplay the hallucination and inaccuracy points. In the event that they “drink their very own Kool-Assist,” would they be tempted to not require the required human checks and sufficiently workers the legislation agency to do this? Would that hasten the demise of the proverbial lawyer within the loop? Is the long run legislation companies that produce a whole lot of work however have only a few if any legal professionals? Does this vendor acquisition predict the long run?
Enter Jordan Furlong
I used to be reminded of all this earlier this week once I learn Jordan Furlong’s excellent piece entitled The Divergence of Law Corporations From Legal professionals. Furlong is without doubt one of the most astute observers of the authorized and authorized tech scene. He’s additionally a rattling good futurist. Furlong believes that the connection between legal professionals and legislation companies goes to be considerably weakened by AI.
Furlong observes that with AI, “Regulation companies will change into able to producing output that may be offered to purchasers with no lawyer involvement in any respect.” In different phrases, lots of the companies completed by legislation companies shall be completed by AI, not authorized professionals and personnel. He notes that a lot of that for which atypical individuals use legislation companies — authorized evaluation, authorized doc preparation, and the authorized service supply — can already be completed by AI. For higher and principally worse, at the least proper now.
Furlong additionally appropriately notes that an LLM can already carry out authorized duties that may be straight offered to a consumer. Furlong says this locations the LLM as the first performer of the authorized activity which is one thing solely new. Through the use of LLMs, legislation companies might sooner or later promote authorized companies to purchasers with none involvement of legal professionals in any respect. Furlong goes on to notice that legislation companies could be pressured to do that by consumer and value pressures.
Importantly, Furlong notes that having AI enterprise authorized duties right now requires a lawyer within the loop to make sure accuracy and fulfill moral necessities. “However as Generative AI will get higher at performing authorized duties, that oversight will change into extra perfunctory, and previous a sure level, it’s going to taper off altogether.”
After all, this may basically reshape how authorized companies are supplied and thru what car. Furlong muses that legislation companies could even change into extinct, changed by a web-based hub. Furlong thinks that what might occur is that future legal professionals would nonetheless be invaluable to solely present companies like advising, advocating, strategizing, and the like. They only received’t want legislation companies to offer them.
The Lawhive Acquisition: An Augur for the Future
Furlong’s predictions aren’t simply theoretical now. Provided that authorized tech distributors are the first supplier of AI companies to legislation companies, it’s not unreasonable to assume that there might very effectively be extra acquisitions just like the Lawhive one. The distributors may actually notice that as an alternative of promoting the AI to the legislation companies, who in flip use it to promote its companies to purchasers, the seller might simply purchase the legislation agency, use it as a car to promote the service, and take for themselves the income from the companies.
Certainly, lots of the issues Furlong suggests in his article might come to move on account of the Lawhive and comparable acquisitions of legislation companies. With these sorts of acquisitions, you would have a vendor with refined instruments having the potential of controlling how and what work is finished by AI and what’s completed by people. The buying firm would have the functionality to supply the identical sorts of authorized companies now completed by people by means of its AI. It could have the functionality by means of the legislation agency, to supply and promote authorized companies completed by AI.
Certainly, it gives the likelihood that the companies of the legislation agency could be primarily completed by AI, simply as Furlong predicts. And as the AI change into extra refined, the lawyer within the loop wouldn’t lengthy be wanted, lowering the necessity for nearly any lawyer in that legislation agency. Such acquisitions supply the likelihood that the legislation agency would change into that on-line hub that Furlong envisions. It’s even foreseeable that the distributors might supply the AI equipped companies themselves.
We Shall See
Now we have no means of understanding how the Lawhive acquisition will unfold, however it might be the primary domino to fall in a a lot bigger transformation. This type of acquisition might create precisely the state of affairs Furlong envisions which is why Lawhive shopping for Woodstock feels so important and doubtlessly predictive of the long run.
Stephen Embry is a lawyer, speaker, blogger, and author. He publishes TechLaw Crossroads, a weblog dedicated to the examination of the strain between know-how, the legislation, and the apply of legislation.
