A newly formed law firm has built its business on the latest technology to reduce costs and change the business model of managing large business transactions.
The commercial law sector is facing a huge transformation as startups use technologies such as artificial intelligence (AI) to transform a sector based on old business models and outdated technologies.
Simon Leaf, a lawyer and co-founder of Three Points, which specializes in managing large business transactions, said the company's approach was based on the latest technology. Large law firms are adopting technology but failing to take full advantage of it and instead still relying on large numbers of expensive lawyers, he told Computer Weekly.
“There are a lot of large law firms that like to talk about playing nice when it comes to using and implementing technology, but very few of them live and breathe it,” Leaf said.
He said traditionally law firms pay bonuses based on a lawyer's billable hours, which he said “disincentivizes them from using technology to do the job better and faster,” adding, “Not everyone who works in a law firm thinks that way, but the overall mindset is still stuck in the 20th century instead of embracing technology and being able to use it.”
Moreover, he said, these firms use outdated technology, which could be holding them back.
ChatGPT for lawyers
Three Points uses Swedish legal tech business Legora's platform, which Leaf described as “similar to ChatGPT for lawyers”, but in a private cloud that meets all regulatory requirements.
This technology reduces costs and speeds up early work when repeatable processes are involved. Human skills are needed at the beginning of the job, preparing the AI for its role, and again at the end, when the senior lawyer comes in to review and fine-tune everything.
“These [AI] tools are great, but they're not at a level where you can just sit back and do nothing. They will get you probably 70%, 80% and sometimes 90% of the way, but beyond that you also need real experience,” Leaf said.
“Instead of reinventing the wheel every time you review a contract or set of terms, we have settings, processes and prompts that allow us to do this in a much more efficient way. This eliminates a lot of time and cost in the early stages of transactions, especially for large technology transactions, and allows you to get to the level much faster and more efficiently, so then a senior lawyer can come in.”
Leaf said the company had to hire far fewer people to get started than a traditional transactional law firm would need. He said traditionally Three Points would hire employees very early on in the process.
“But by leveraging the technology we have, the prompts we customize and other workflows, we are unlikely to need more junior staff,” he added. “There will continue to be a need for mid- and senior-level lawyers and other experts who can come in and work with the technology, such as a human-at-the-helms approach.”
Risk at the beginning of a career
When asked about the risk that the next generation of lawyers in the field will not be able to launch their careers and learn from AI, Leaf said: “It's a fair point and I don't have the answers to that question. I can talk about the market I work in, which is technology transactions, the commercial contracts world, where, generally speaking, the teams are going to be pretty lean.”
“We're not talking about large M&A listings or large disputes, where I suspect there will still be a need for junior lawyers, but certainly in the niche area that I work in there will be less need.”
AI is gradually making its way into the legal sector. Earlier this year, a law firm based on this technology, which can complete the lawsuit process with little to no human intervention, received approval from Office for the Regulation of Lawyers' Activities (SRA), who called it a “landmark”.
Garfield AIAs we know, the company was founded by a technologist and a lawyer with the original aim of providing small businesses with collection services for billions of pounds of unpaid invoices. The AI Litigation Assistant, which initiates and manages small claims litigation, has been described by the SRA as “the first law firm to provide legal services using AI”.
