What we are witnessing today is digitalization replacing large archives of law cases and libraries; start-ups becoming new law offices; software making internet new place for dispute resolution; smart contracts guaranteeing deal enforcement and Artificial Intelligence seems to be what we needed for data analysis.
First steps toward these changes have been made through digital and online databases. It made research much easier for everyone in legal practice. Lawyers can access databases to find regulations, precedents or verdicts based on keywords related to a case they are building.
This can result helpful for law students’ and legal practitioners’ professional development. To judges, it can be crucial for solving international legal cases under their jurisdiction and consulting comparative legal practice. Finally, it made it easy to individuals to find legal explanation they need for whatever the reason. Good examples of the broad benefits that this technological innovation has brought to society is seen through numerous YouTube influencers. The internet is flooded with makeup artists, who review different beauty products on their YouTube channels thus boosting the sales of those products. For them, it is a full-time job. The impact they have on customers have brought to the FTC (The Federal Trade Commission for Protecting America’s Consumers) regulation of this matter. The FTC’s Endorsement Guides are warning influencers and marketers to make the nature of that cooperation transparent so that the viewers can have that in mind when deciding about the truthfulness of the makeup artist’s opinions and recommendations. In their letter to influencers and marketers, the FTC reminded them ‘that if there is a “material connection” between an endorser and an advertiser – in other words, a connection that might affect the weight or credibility that consumers give to the endorsement – that connection should be clearly and conspicuously disclosed, unless it is already clear from the context of the communication. A material connection could be a business or family relationship, monetary payment, or the gift of a free product.’
The curious cooperation between cosmetic companies and makeup artists is very well explained in one of the YouTube channels ‘HereForTheTea’. Namely, influencers are being paid to give positive reviews about one product on their YouTube channels regardless of their true opinion. Many of these products customers buy using affiliated links or discount code offered by the influencers. In return influencers gain the percentage of the sale. Understandably, it is of mutual interest for the company and the influencer not to disclose the sponsorship or the affiliation, given the fact that they both aim to benefit from it. Many followers eager to learn makeup skills or craving for popular and expensive makeup products do not think about what is going on behind the curtains. Those curious enough did their research and found out the legal duties of these influencers who are using platforms such as YouTube to promote or sell products. Thanks to that, those who are planning to buy any product are being warned and educated in order to make a rational decision. All that thanks to the global research engine called ‘Google’ and the most popular internet platform for video sharing - ‘YouTube’.
With the rise of internet, start-ups have become new and very popular model of business undertakings. It did not avoid legal niche. At the moment, there is a total number of 1852 companies in legal markets, worth $4 million of average valuation. Very popular among them is the website ‘RocketLawyer’. In many aspects it is very close to an online law firm. It offers variety of legal services: creating legal documents for sales, divorce, starting businesses, Non-Disclosure Agreements, legal advising with ‘On Call Attorney’. These are general legal services that every law firm or independent lawyers are offering to their clients. ‘RocketLawyer’ has made big steps by creating an online platform that makes these services more accessible and affordable. For both lawyers and clients this system is saving a lot of energy and expenses that might determine the price of legal service. The ‘RocketLawyer’ platform and those similar to it can make working hours for lawyers a lot more flexible. It could be a source of an alternative employment and even a way for legal professionals to use their skills and knowledge to help those in need.
Other companies such as PayPal and eBay that revolutionised the money transfer and e-commerce, required more efficient way of performing a very important part of the job – dispute resolution. It led to designing the platform ‘Modria’, the online dispute resolution platform .Until now, it was used to resolve ‘more than a million cases in the USA and around the world.
‘TheNewWeb’ gives simplified explanation of how the platform operates:
‘Modria’s engine is built on conflict resolution research, and taps the knowledge of legal experts. The platform flags and diagnoses customer issues and subsequently drives the negotiation, mediation and arbitration before complaints escalate into a public spat. Its so-called Diagnosis module collects and organizes all the relevant information about the issue and suggests solutions. The Negotiation module then distils points of contention and enables those involved to talk things through, while it’s also recorded for posterity. If the parties can’t negotiate their way to a resolution, the Mediation module brings in an impartial third party to clarify issues and run through options. If no mutual agreement can be reached, parties can request a third-party arbitrator to examine the facts and help arrive at a decision. Along the entire process, users can engage in discussions and submit assets such as text files, PDFs and videos supporting their arguments.’
The need for an innovation such as ‘Modria’ most certainly comes from the fact that life needs are highly dependent on internet. Today we have online shopping, home-based businesses online, online publishing, online payments etc. Customers are taking risks when engaging in these sorts of activities. This becoming dominant practice means that customers should have legal protection that is much faster and more accessible geographically and financially. It is known that many consumers’ (or sellers’) rights might be hurt without them reaching out to get legal protection because of distance or price. Having the ability to use the internet should not be a limitation for justice or for stopping the abuses from both sides because of current developments.
Mediation is recognized as a faster and less expensive choice when it comes to dispute resolution. Divorcing couples and business partners are using this practice to resolve misunderstandings or manage their interests. Platforms such as the platform for Online Dispute Resolution are making it possible for parties from two different parts of the globe to interact, with the possibility to protect themselves, if that is needed. On a longer run, it can be beneficial for court by entrusting considerable amount of work to these platforms.
Technology seems to be able to do what many judges struggle with – enforce binding agreements. The innovation that made it possible are smart contracts. Ruth Chandler defined them in her publication ‘Smart Contracts For Beginners’ as ‘a computer protocol that facilitates, verifies, or enforces the negotiations or performances of a contract’. Furthermore, she wrote that ‘those contacts are created to be self-enforced and self-executed, giving a lot of people a great advantage. All you need to do is put the plans in place and allow the rest to take care of itself’. This sounds big!
The intention of a smart contract is to make contract enforcement more efficient and done according to the conditions of the agreement, by the ‘decentralized code that does so after the condition is fulfilled’. As Henning Diedrich simply explained, ‘smart contract can be trusted to pull it through even if it hurts’. What guarantees that is not the goodwill of a party, the law, the best lawyer or the most righteous judge in the country, but a computer code, based on blockchain principles. Blockchain is defined as ‘an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way’. Main characteristics of blockchain technology are:
- Irreversibility of records, once entered the data can’t be changed, without disrupting the balance of the record entered before them;
- Transparency, making it visible to anyone who can access the system;
- Gives possibility to users to automatically enforce transactions between two parties.
We are free to conclude that smart contracts will make sure that what we agreed is exactly what we get. What this innovation is promising is security when it comes to complying with the terms of the contract. For now they are only mentioned in the context of cryptocurrency and blockchain transactions, but it seems usable for identity and property protection, and facilitating the burden of proof for parties involved.
The weakness of this innovation consists in its strictness, meaning that what is initially agreed on cannot be altered. In traditional contract regulation and enforcement, the law takes into consideration changed circumstances, impossibility, or impracticality. What gives legitimacy to these principles is the fact that they take into consideration an unpredictable life events. As a consequence, sticking to the initial terms might not be efficient for one or both parties, and they should have the ability to adjust the contract if necessary. Innovation does mean change, and it is often associated with something better than what already exists, but I believe that basic principles of law theory should be respected and included in the creation of any innovation related to law.
On the other hand, there seems to be a limitation that this innovation will hardly exceed. Because of the nature of some contractual agreements, computer codes are unable to properly standardize them. Blockchain-based smart contracts might disable a person to marry for the second time in countries where polygamy is illegal by making it difficult for parties to disrupt public register. What it can’t do though is ‘self-enforce’ the divorce.
Finally, Artificial Intelligence is also showing potential and influence on legal practice. A recent experiment has shown that AI is performing better in reviewing legal documents. It is clear that AI is a powerful invention that could automatize a significant part of the work done by humans. Not discussing the limits, or how far it can reach, I would like to point out why we should try using AI as much as possible.
The fact that AI is performing better in reviewing legal document is excellent news. Committing to a single legal case demands a lot of time and energy, often being very exhausting. And even beside all the efforts, something can pass unnoticed. The big difference between AI and human nature is that humans do not have a designed code, an instruction by which they act. There are many circumstances that can affect their thinking process, determine their actions. As much as we try to remove anything that can disturb us on, it has been shown to be very difficult or impossible to achieve. We definitely need assistance and AI is a possible solution. Using AI to review any legal document, to gather information and to analyse data can save precious time for lawyers. New generations of lawyers can benefit a lot from using AI. A lot more time can be spent on building the best possible case, with stronger arguments and better understanding of the fact. We can argue that reading and analysing facts is what makes us better lawyers, but relying on AI can allow them to perform better in pleadings and presenting arguments. We must take into consideration that this would mean reduction of stress, more security in performance and more time for social life. Social life for every human being is important and all the innovation that we come up with should mean improvement of overall quality of life. So, before rushing to judge AI, we should think carefully about how it benefits us.
Now, knowing how far in the development Artificial Intelligence can go, the fear of completely replacing human labor is understandable. Maybe there will come a moment when we will simply have to make a compromises. My beliefs are that legal practice will be ‘resilient’ for a long period of time. The best argument in favor of the need of lawyers and judges as we have them today belongs to Kate Andrews from the Institute of Economic Affairs. In her speech ‘The Future is Flexible: The Nature of Work in 2017 and Beyond’ during the European Students for LibertyCon 2017, she predicted that legal professions will not be affected as much as other professions such as customer service representation, because people still have a need for direct contact with other human beings, because of a better understanding of one’s emotional, social or material situation. Also, a study conducted by MCKinsey & Co, showed that 23% of a lawyer’s work can be automated. That gives a scientific support to this claim.
It would be inappropriate to make claims on whether AI and automatization will eventually completely ‘banish’ the need for human labor because the limits of science are still unknown. But, most certainly, we live in a period that allows us to embrace innovation and use it to our advantage.
By Ana Vukčević
This material was published in Lawyr.it Vol. 5 Ed. 3, September 2018, available only online.
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