Challenging the legal ‘cartel’
Co-founder of Legaler Stevie Ghiassi knows he has a fight on his hands. The legal profession, however ready for disruption, has routines of work that are deeply entrenched – from the billable hour to outmoded partnership structures in law firms.
“For the longest time, innovation within the legal industry has been impeded by the perverse incentives created by the billable hour, risk-averse thinking and unavoidable regulatory overhead. The good news is the industry is rapidly shedding its skin and the ‘cartel’ is finally being replaced by innovative thinkers and doers, but not without a fight!” As part of this shift in thinking and practice, Legaler was launched.
“Legaler was born out of the desire to provide an easier way to access and manage legal services, and like most start up ideas, was a result of the shortcomings we faced in our own dealings with lawyers. It was a perfect storm of recognising pain points, an urge to disrupt the status quo and entering the market at a time where we felt the industry would be ripe for disruption.”
Since its launch in April 2017, Legaler has expanded to over 80 countries. Stevie expects the rate of Legaler’s adoption to increase alongside the rapid proliferation of new technology.
A simple choice for lawyers: Evolve or Die
“You really only get one choice, ‘evolve or die’,” said Stevie. “For too long, even when ostensibly ‘innovating’, most law firms have maintained the view that their services are bespoke, with little need to evolve. But just like every other industry, the pendulum has now swung to the consumer’s side. To better serve the needs of buyers, providers of legal services must work out how to stay relevant by any means possible (not just tech). This provides an opportunity for everyone.”
Technology such as AI allows service providers to be more efficient than ever, while scaling their businesses to more clients than previously possible.
“The result is ultimately a reduction in transaction costs, which needs to be passed onto clients,” Stevie said.
Tech will become the largest provider of legal services
“The world’s largest provider of legal services will inevitably be a technology company, much like AirBnb is the world’s largest accommodation provider and Uber is the world’s largest transportation company. These companies have done a great job of delivering what consumers want, on-demand and at a competitive price,” said Stevie.
This view is supported by recent major funding events, including LegalZoom’s $500 million capital raise and Atrium’s $65 million capital raise. Both investments reflect an increasingly widely held belief that technology companies offering legal services will soon surpass law firms in terms of scale.
“Blockchain technology will play a significant role in evolving society in general but will significantly change the nature of legal services, and reinvent the lawyer’s primary commodity, contracts. Throughout history, every time the nature of our ‘ledgers’ has changed, so too has everything else. This can be traced all the way back to Mesopotamia when clay tablets were used to scale the first societies and even double-entry booking keeping which many historians contend gave rise to modern capitalism.”
Reimagining legal services through Blockchain
“For the first time in history, thanks to the technology that underpins Bitcoin, we have been able to create digital scarcity in order to inject trust into any software, process or organisation. Upon this new decentralised ledger, we can start to reimagine every aspect of the current legal industry, from smart contracts, dispute resolution and digital signatures to public records, court evidence, identity and Know Your Customer (KYC). New business models to deliver legal services are even starting up.”
Legaler is betting big on blockchain, building a blockchain infrastructure to allow developers and businesses to easily and quickly build legal services applications.
“This will eliminate the need for intermediaries to connect lawyers and clients. Proving the technology's power is Legaler Aid, a first-of-its-kind platform that matches disadvantaged clients with pro bono legal advice, fuelled by a tokenised incentive system and a platform for transparent crowdfunding for social justice cases through tax-deductible donations.”
Raising awareness through education
Preparing lawyers and future lawyers for a future dominated by technology companies is best done by education.
“Quite often, especially for legal professionals consumed with the pressures of the daily grind, it’s very difficult to become aware of just how radically technology is shifting the industry. It’s very hard to pause and take stock. This is where institutions like the Centre for Legal Innovation become important for alerting everyone about the impending disruption. So, the first step is awareness.”
“Then there’s education. Quite frankly, most legal professionals are overwhelmed and don’t know where to start. We need more online resources and short courses that are relevant to new technologies and practices so that continual up-skilling can become easier and more accessible. Certain skills that often don’t get taught in law school are becoming more and more critical, like project management, business strategy and data analysis.”
Should lawyers learn to code? While Stevie agrees a lawyer that comes with a computer science degree is a rare bonus, what is more important is having a holistic and intimate grasp of technology and its applications and being knowledgeable enough to work with technology professionals.
Become an ‘augmented lawyer’
“The lawyers of tomorrow will be ‘augmented lawyers’,” said Stevie. “That is, they will be given superpowers by software like AI that will heighten their abilities to process high levels of data from which they will be able to deliver valuable insights and strategy. Additionally, many parts of contracting and execution of agreements will be handled by smart contracts and completely automated, requiring lawyers to add value in different, more important, areas of the drafting process.”
Like many technologists, Stevie does not intend to automate lawyers out of a job. Indeed, he argues that a job dull enough to be done by a machine should, in fact, be done by machines.
“Lawyers should be focusing on jobs that machines don’t do so well,” said Stevie.
“Randall Kiser has a great book called ‘Soft Skills for the Effective Lawyer’ which every lawyer should read. It highlights the skills that will become more important as technology plays a greater role - like self-awareness, self-development, social proficiency, leadership, wisdom and professionalism.”
The CLI is essential to educate and raise awareness
“The only real way to navigate the ever-evolving legal landscape is focus on awareness and education, and it seems the CLI came to fruition with precisely that mission in mind. It’s in the name after all!”
“Innovation is a fluid and iterative process that needs continual effort and it’s great to see that the CLI is collaborating with such a broad array of thought leaders and innovators around the world in order to ensure that lawyers have the best chance of staying abreast of the latest technological developments with enriching content, webinars and events.”
Stevie cited the CLI’s recent AI Summit as a great opportunity for lawyers to immerse themselves in technology which they might otherwise fear but will one day become their greatest asset.
“The AI Summit provided an opportunity to see past the technology and consider the regulatory and ethical concerns, the privacy and data considerations. This is precisely the way lawyers want to and should be learning, with all the facts!”
CLI was delighted to welcome Stevie to the faculty of the AI in Legal Practice Summit in 2018. We also gratefully acknowledge the Australian Legal Technology Association – ALTA as a valued friend and contributor to the Centre’s global network. Stevie is the President of ALTA.