You’ve probably heard of Fintech, Blockchain Tech, InsureTech, maybe even IoT, but have you heard of RegTech, otherwise known as regulations or law technology?
Probably not, however, a confluence of factors have now led to a stage where automation is being implemented in many industries, including law or, more boringly said, regulations.
Data analysis has considerably advanced in the past three decades. Algorithms have become much more sophisticated. Blockchain technology has added some fire to it. Now, many are imagining what combining them all could achieve.
Law and code are not that different. In its basics, a lawyer and judge engages in an if:then analysis. If fraud, then prison. If ID, then x sum of value transfers, and so on. Of course, in some cases it is much more complicated. Fraud is a fuzzy word, as is ID because it can be faked.
Thus, British and American lawyers and judges ask if facts similar to x case then y. It is the job of lawyers here to say how facts differentiate or why, but that’s going to the level of very complex cases where we may need experienced judges.
Those cases are usually the exception. Most legal problems are solved at the lawyer’s office where a junior level graduate will probably tell you since x then y. In some cases, it may develop a bit further, but even then it would be a very low level court and low level judge where, again, we apply since x similar to y case then z.
It is probable much ends here. As far as the topic is concerned, we can’t dream of going further in any event at this stage and, for probably centuries, some cases will necessarily have to go higher, but if we stop here, there is potential for so much automation. For example, is the initial consultation with the lawyer, which may be expensive, necessary?
Algorithms are now able to analyze context. Is it possible for someone to just type their legal problem and a bot give them some preliminary analysis? You may ask what if the bot is wrong. Well, what if the lawyer is wrong?
And sometimes they are. Sometimes judges are wrong. That is why the British legal system has some 4 layers of seniority with citizens able to escalate a decision higher and higher until the Supreme Court is reached.
We can go simpler. Can we code a bot to automate the repetitive KYC and other compliance tasks undertaken by many companies? Here, exceptions to the general if:then rule might be at 1% or, at best, 10%. If we automate the other 90%, how much costs savings and efficiency increases could be achieved?
What of legal templates? These are aspects which do not really need any legal knowledge and are very much, in the vast majority of cases, straight if:then. If money claim, then complete form x.
There is no real reason why any human needs to be involved in these simple tasks with most small money claims allowing ordinary laymen to take them to court. However, they can be assisted by a lawyer, but they usually do not come cheap. A bot, on the other hand, can be cheaper than a coffee.
Of course, those developing these algorithms need to spend a bit more time to think of all things, than us here at Trustnodes introducing a concept as we are afforded the luxury of not needing to dwell into detail, but here is Andy Stewart, a managing partner at Motive Partners, for a fancier example. He publicly stated:
“Anything that has machine learning in it or blockchain in it, the valuation goes up, 2, 3, 4, 5x. We’ve seen companies come back to us multiple times and originally it’s an AML/KYC engine which looks pretty interesting. Then it turns out to be AML/KYC [anti-money laundering/know your customer] engine powered by machine learning and using blockchain, and it’s a much more valuable company.”
It’s much more valuable because of automation, which allows it to add efficiency, reduces costs, handles far higher volumes, frees the human’s time for lateral thinking. Moreover, besides money, there is no other industry that deserves disruption more than law.
The courts of law make a dentist visit seem like a day in the sunny park. The process usually takes months, costs far more than many earn in a month, year, or sometimes more than they earn in their lifetime. On top, despite the simple if:thens, it is usually unpredictable.
The legal industry is a subject of Bleak Tales, with its practitioners often an out of touch modern aristocracy protected by licenses which lack nuance and usually serve to just keep lawyer’s fees up.
As such, to disrupt it is not just about profits, but a romantic aim too, which may make the endeavor not a boring engagement, but something very cool.