#MakeLAWBETTER: An Overview of Legal Innovation
On February 1st, 2019, Iowa’s Innovation, Business and Law Center hosted Professor Dan Katz, from the Chicago-Kent College of Law, for a presentation on “Legal Innovation” as part of the IBL Technology for Lawyers Series. Professor Katz is an academic, scientist and entrepreneur in legal technology. Professor Katz gave an overview of how innovation is making changes to the legal industry.
Professor Katz introduced a central problem facing the legal industry: that legal services are often not a great value for clients. For example, law firms traditionally operate by providing the time and expertise of a lawyer in exchange for money. This arrangement has left gaps in technological and operational investment, in part, because law firms have prioritized being subject matter experts over these other areas. These gaps mean clients do not always receive the best value for their services. Professor Katz presented examples of law firms that have recognized the gap in technological and operational investment and are making strides to improve. Professor Katz also gave examples of high-tech companies, startups, and consulting companies that are bringing innovation to the industry.
Artificial intelligence (AI), analytics, blockchain, and other technology that claim to provide improved legal services are areas of rapid growth. These technologies allow attorneys to optimize services to clients. For example, several companies make AI tools for the legal context, such as tools for finding relevant documents in discovery (i.e. e-discovery). There are also open source projects to create AI tools for law firms. As these tools and technologies are improved, it becomes easier and cheaper for other actors in the legal industry to adopt to bring more value to clients. Cheaper technological options will make it easier for tools to exist in highly specialized fields and provide more access to legal services for those who may have had trouble affording legal counsel in the past .
Legal innovation is also more than just legal technology. For example, a current area for legal innovation is in process and operational improvements. Applying "lean thinking," "six sigma," and other process improvement methods to the legal industry have the potential to provide massive efficiency gains. These operational improvements will also help provide greater value and transparency to clients.
Professor Katz also presented some issues that are limiting legal innovation. For example, law is a relatively small industry with limited access to capital as compared to other industries. This problem may limit the investment capital that is available to fund tools within the specialized field within the law. There are currently professional ethics rules that prevent the sharing of legal profits with non-attorneys. These rules, along with the partnership structure of law firms, make it difficult for law firms to invest in technology. Professor Katz said reconsidering those ethics rules, specifically for law firms with large corporate clients (and sophisticated in-house counsel), may allow for more investment, and therefore more value, for these clients. Overall, Professor Katz was optimistic about the future of legal innovation even with the challenges actors currently face.
For more information on legal innovation from Professor Katz, visit the following locations: