The impact of Legal Process Outsourcing has been a bit murky as it relates to hiring practices at the firms which use it. It might have slowed down hiring and perhaps even made some lower level lawyer jobs redundant..but by and large it really has had no meaningful impact on headcount and associated expense rations.
Generally speaking it is business as usual at major law firms. Operational changes are incremental and certainly not disruptive.
This might be about to change though. Much more potential to distort the business of law have applications built upon Artificial Intelligence (AI) and Natural Language Processing (NLP).
The business of law is perhaps more vulnerable to be revolutionized than any other business out there. The expense ratio is very high with top law firms charging hourly rates for their partners at $ 1000 (and more sometimes). Simply put..there is enough money being generated within the business that it pays to develop some killer applications.
The question is of course..what will those applications do?
What makes the business of law such an interesting target for AI and NLP is both its simplicity and the vast amount of data it generates.
Law is essentially produced and updated on a continuous basis through the courts. Whenever a higher courts sets precedent in its interpretation of the law this precedent becomes the defacto standard lower court rely upon to judge a case.
Lawyers pull prior case law to establish their legal position.
The more closely aligned prior case law is with the set of circumstances in a current case, the more likely it is that a verdict will be aligned with what the higher court had decided.
The cascading decision pipeline, whereby higher court decisions find applications in lower courts, makes law (in theory) ideal to be accessible by AI and NLP.
This is of course not just a theory...IBM has already developed a legal assistant named ROSS which is using Watson's AI engine.
ROSS is very much still in its infancy...it can potentially be equated to a child. But ROSS is also growing up very quickly. The more data it absorbs and the more cases it gets to review, the better its ability to judge law based upon context will become.
Once its ability to comprehend context (NLP) equals that of an average lawyer it will be a short time span before ROSS is able to output supporting case law in a manner which can be submitted to court (a motion) .
Most importantly...ROSS will get better at an exponential rate. In theory the depth and quality of its legal output will go from being just a decent quality to Top Notch within a matter of months or year(s).
And this exactly where the danger for the business of law is. In a few years a single practitioner located in a rural area will be able to submit the PDF of a lawsuit to ROSS and in return will receive a complete legal defense, organised into applicable law and supporting case.
The quality of the legal work will be on par with the strategy devised by the highest paid law firms in the country. ROSS will, for all intent and purposes...democratize the business of law. Top Notch legal advise will become a commodity, easily accessible by almost anyone.
Of course, this will not make the lawyer obsolete. A lawyer will still have to file the motion and argue the case. (which in a lot of cases might be more important than the legal facts)
It will however decimate the rank and file. Lawyers working in the background and tasked with evaluating legal strategies and doing case law research are the ones who will get the boot first.
The next couple of years should bring more changes to the business of law and how is conducted than any period in its history. Law used to be a business of individual intellectual capacity ..it might become a business of pure processing power.