The Law Profession And The Fourth Industrial Revolution

Legal technology (LegalTech) is being used with increasing frequency to improve speed and efficiency in the legal process.

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by Itumeleng Mukhovha

Progress is inevitable.

The first industrial revolution witnessed the emergence of mechanical production and the second was fuelled by electrically powered mass production.

The third industrial revolution was driven by the internet and automated production. All three revolutions focused on scalable efficiency (doing things right) and moved towards scalable adaptability (doing the right thing).

The fourth industrial revolution will be different. It will bring significant changes to the way we live, interact and do business.

It is the future of technology where objects, machines and various devices (all things) connect with each other in a secure, networked environment.

There has been a debate about whether the fourth revolution is an extension of the third, but the general consensus is that a new era has begun.

The fact that the fourth industrial revolution will be driven by intelligent machines that can perform complex tasks automatically by communicating with other machines, with little or no human intervention means that this revolution will have a far bigger impact than the third revolution. It will blur the physical and digital divide.

The focus of the fourth industrial revolution will increasingly be on scalable adaptability as well as empowering people rather than corporations (as was the case with the first three revolutions.)

However, some of the changes of the fourth industrial revolution are challenging.

When it comes to employment, there are varying opinions on the effect of the fourth revolution on employment numbers, but it is inevitable that jobs, and the skills required to do those jobs, will change.

Some reports indicate that around a third of the activities in 60% of all occupations could become automated in time. That means that many people would need to find new jobs or learn new skills.

The decrease in jobs in certain sectors due to increased automation do create opportunities for new jobs and industries, but the issue is in harnessing those opportunities. Not doing so could have severe effects on social inequality and unemployment.

A combination between legal reform and partnerships between government, academia and business are required to ensure that new opportunities for jobs and upskilling are successfully harnessed.

Technological and commercial advances bring new compliance challenges, because legislation may have been written before more recent inventions. This has the potential to expose businesses to risk. For example, a system which automatically assigns workers to a  particular role may contribute efficiency but may also open employers to risks of violating anti­discrimination laws which would require human-based decisions.

It has been argued that the reason the first industrial revolution was so successful was the respect given to Intellectual Property, which encouraged innovation. Protecting both innovators and the users of innovation is essential to ensuring its growth.

There have been new developments in the law to answer the requirements of the new revolution and the age of personal information and privacy.  For example, the General Data Protection Regulation (GDPR) is the primary law regulating how companies protect EU citizens personal data.

Non-compliant companies are subject to stiff penalties.

A great benefit of the legislation is that there is a uniform system which applies across the EU.

The Protection of Personal Information Act (POPIA) is South Africa’s data protection law. Its purpose is to protect people from harm by protecting their personal information. In doing so it aims to stop identities and money from being stolen as well as to protect the fundamental right to privacy. It affects both natural and juristic persons who process personal information and subscribes to penalties for non-compliance.

The goal of any legal reform should be the creation of a competitive legislative framework that takes into account the changes brought by the new industrial revolution.

Further, new markets that have developed as a result of the fourth industrial revolution have resulted in an increased need for the services of the legal profession.

Clients investing in new markets need to be able to understand the opportunities and mitigate the risks of doing business in emerging markets. Client expectations have also changed as they demand more efficient and cost-effective services which involve finding and synthesizing information more efficiently.

As a result, ‘Big data’ is affecting everything from research, through to devising strategies or assessing the merits of a legal case.

There are already solutions to many data-related challenges ranging from collecting large amounts of data as well as a technology capable of scanning, interpreting and synthesizing written documents. This technology is capable of providing better, cleaner and richer data, which in turn makes it more searchable and allows for the mining for specific insights directly related to a current legal question.

Better legal analytics in general means that lawyers are more able to mine for results in increasingly large sets of data. In specific areas of law, analytics can also be used to track broad industry trends related to strategic planning, business development and mining.

Legal technology (LegalTech) is being used with increasing frequency to improve speed and efficiency in the legal process.

Artificial Intelligence (AI) is now able to significantly reduce both the time and cost of legal work. For example, the use of AI in contract analysis supporting mergers and acquisition processes or contract remediation to comply with regulatory changes like the General Data Protection Regulation (GDPR) is growing.

As the AI market grows, the use of legal services will expand along with it leading to better legal outcomes and improved results to the bottom line.

Internally, legal professionals may also increasingly rely on AI-powered digital assistants which would grow smarter as they process more information. This would free legal professionals to focus on higher value-added legal services to clients.

Another way in which the legal sector is changing is, via peer network communities that allow for meetings and the sharing of knowledge and best practices. This better aligns legal departments and results in improved collaboration with clients.

It is unlikely, however, that technology will reach a stage it could replace the legal profession. It is more likely that technology will empower a new era of augmented intelligence with legal professions still making crucial judgments but with powerful tools to draw sharper insights.

Machines are tactical but humans are strategic – while machines will speed up processes and make onerous tasks easier, humans will always guide the process.

  • Itumeleng Mukhovha is an Associate, Corporate/M&A Practice at Baker McKenzie Johannesburg

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