Make Law Better - The Legal Innovation Agenda in Vectors and Phases

Make Law Better - The Legal Innovation Agenda in Vectors and Phases

Make Law Better ( #MakeLawBetter) - The Legal Innovation Agenda in Vectors and Phases

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Daniel Martin Katz

September 19, 2018
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    The Legal Innovation Agenda in Vectors and Phases daniel martin

    katz blog | ComputationalLegalStudies.com corp | LexPredict.com edu | illinois tech - chicago kent law lab | TheLawLab.com #MakeLawBetter page | DanielMartinKatz.com
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    I WOULD BE REMISS IF I DID NOT MENTION THIS

    EVENT WHICH RECENTLY TOOK PLACE …
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    I THINK IT JUST ONE OF MANY SIGNALS THAT INDICATE

    THAT THERE IS A REAL APPETITE FOR CHANGE
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    I MENTION ALL OF THIS ONLY SO THAT YOU MIGHT

    BE ABLE TO ORIENT SOME OF MY COMMENTARY
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    AND UNDERSTAND THAT I AM *NOT* A MERE SPECTATOR OR

    COMMENTATOR BUT RATHER AN ACTIVE PARTICIPANT … #SKININTHEGAME
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    PROCESS IMPROVEMENT A.I. + LEGAL ANALYTICS HUMAN CAPITAL + CULTURE

    INTELLIGENT MONETIZATION MARKET(S) STRUCTURE + DYNAMICS PRODUCTIZATION AND SCALE
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    Service The Nature of the Offering Type of Client (Prototypical)

    (Product + Service) Hybrid Product Fortune 1000 Mid Cap Companies Retail A2J THE MARKET(S) IN LAW
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    "This reflects the remarkable rate of change taking place in

    the legal market," said Liam Brown, Founder and Chairman of Elevate, "and it demonstrates that Elevate has assembled the right team at the right time to help our clients address the complex business challenges and unprecedented cost pressures they face.
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    OVER THE PAST FEW YEARS, WE HAVE SEEN SIGNIFICANT GROWTH

    IN THE SHEER NUMBER OF STARTUPS …
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    ANGELLIST 749+ ‘LEGAL TECH’ COMPANIES 1800+ IF YOU ONLY SEARCH

    UNDER ‘LEGAL’ HTTPS://ANGEL.CO/COMPANIES? MARKETS%5B%5D=LEGAL+TECH
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    691 COMPANIES ON THIS LIST INCLUDING MY COMPANY WHICH IS

    NOT INCLUDED ON THE OTHER TWO LISTS THEREFORE BOB’S 
 LIST IS THE BEST LIST :) https://www.lawsitesblog.com/2016/04/towards- accurate-listing-legal-tech-startups.html
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    R e p o r t e d s a

    l e price between $35 million and $40 million. Final Number was likely between $80 - $100 million A n u m b e r o f venture capitalists have invested in t h e c o m p a n y , including Silicon Valley’s Sequoia C a p i t a l w h i c h invested $7 million in 2007 ....
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    36! “From!se)lement!informa0on!and! contracts! to! sensi0ve! client! data! and! beyond,! Liberty!

    Mutual! creates! and! stores! ever:growing! volumes! of! unorganized! data! across! its! worldwide! offices! and! databases.”! “I've!seen!a!real!transforma0on!in! the! legal! department! just! having! t h a t! i n f o r m a 0 o n! v i s u a l l y! available."! “The' legal' department' is' now' w o r k i n g' p r e d i c 7 v e' a n d' prescrip7ve' analy7cs,"' i.e.' ways' to' analyze' data' that' enable' forecas7ng'for'legal'issues.”'
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    34!

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    37! “I"believe"strongly"that"data"analy2cs"is" a"new"fron2er"in"the"legal"space.”" Susie!Lees! General!Counsel!! Allstate!! “Leveraging" data," not" only"

    that" we" possess" but" that" our" law" firms" have" amassed"over"the"years,"offers"a"plethora" of" un<tapped" opportuni=es—not" simply" to" help" us" forecast" and" manage" legal" expenses," but" also" to" help" our" clients" make"more"informed"business"decisions.”"
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    HISTORICALLY - LAW HAS BEEN A SERVICE BUSINESS THROUGH WHICH

    SUBJECT MATTER EXPERTISE IS DELIVERED
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    Service The Nature of the Offering Type of Client (Prototypical)

    (Product + Service) Hybrid Product Fortune 1000 Mid Cap Companies Retail A2J THE MARKET(S) IN LAW
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    AMONG OTHER THINGS, PRODUCTS HELP WITH THE ‘JUST IN TIME’

    IMPERATIVE (LABOR CANNOT SCALE INSTANTANEOUSLY)
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    LAW FIRMS ARE PARTNERSHIPS AND GIVEN RULE 5.4 FIRMS CANNOT

    SHARE PROFITS WITH #NONLAWYERS WHERE #NONLAWYERS = HUMANS
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    HOWEVER, NOTWITHSTANDING EACH OF THESE ENTITIES (AS WELL AS OTHERS)

    ARE UNDERTAKING SOME SORT OF R+D OPERATION
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    ACROSS THE ECONOMY THERE ARE MANY EFFORTS TO CONVERT AN

    ARTISANAL PROCESS INTO AN INDUSTRIAL PROCESS
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    WITH RESPECT TO A GIVEN PROCESS THERE IS OFTEN A

    SIGNIFICANT SPREAD Kim Craig from Seyfarth Lean Consulting
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    RECENTLY MET WITH THE GENERAL COUNSEL OF A LARGE COMPANY

    WHO OVER PAST DECADE HAD REDUCED THE LEGAL EXPENDITURES OF THE COMPANY BY NEARLY 50% USING THE LEAN METHODOLOGY
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    IT CAN AID IN Increasing Response Times Predicting Resource Loads

    Coordination Across Stakeholders Increasing Margins on Work
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    BUT THE BASIC IDEA IS TO ENCODE THE RULES THAT

    GOVERN A DECISION MAKING PROCESS AND TURN IT INTO SOFTWARE
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    EXPERT SYSTEMS FOR ACCESS TO JUSTICE #A2J #A2JAUTHOR DECISION TREE

    A2J AUTHOR www.a2jauthor.org Used over 3.5 Million times 2.1 Million Documents generated IMPACT
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    #Predict Relevant Documents Data Driven EDiscovery/Due Diligence (Predictive Coding) #Predict

    Rogue Behavior Data Driven Compliance #Predict Contract Terms/Outcomes Data Driven Transactional Work
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    #Predict Relevant Documents #Predict Case Outcomes / Costs Data Driven

    Legal Underwriting Data Driven EDiscovery/Due Diligence (Predictive Coding) #Predict Rogue Behavior Data Driven Compliance #Predict Contract Terms/Outcomes Data Driven Transactional Work
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    #Predict Relevant Documents #Predict Case Outcomes / Costs Data Driven

    Legal Underwriting Data Driven EDiscovery/Due Diligence (Predictive Coding) #Predict Rogue Behavior Data Driven Compliance #Predict Contract Terms/Outcomes Data Driven Transactional Work #Predict Regulatory Outcomes Data Driven Lobbying, etc.
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    Professor Katz noted …“We believe the blend of experts, crowds,

    and algorithms is the secret sauce for the whole thing.” May 2nd 2017
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    the path (hint: it’s hard to skip steps) Current State

    Assessment Strategic Planning Tool Selection Solution Design Descriptive Analytics Diagnostics Forecasting
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    Simple Data Models Claim&Type& Statutes& Outcome& Payout& 00001& Employment&–& Single&Plain>ff&&

    Race& Title&VII& SeCled& $10,000& 00002& Employment&–& Single&Plain>ff&& Race& Title&VII& SeCled& $70,000& 00003& Employment&–& Single&Plain>ff&& Age& Title&VII& & Summary& Judgment& N/A& 00004& Employment&–& Single&Plain>ff&& Gender& Title&VII& & Dismissed& N/A& 00005& Employment&–& Single&Plain>ff&& Age& Title&VII& & Dismissed& N/A& 00006& Employment&–& Single&Plain>ff&& Disability& ADA&Title&III& SeCled& $21,000& Ma4er&No& Ma4er&Type& 00001& Employment&–& Single&Plain>ff&& 00002& Employment&–& Single&Plain>ff&& 00003& Employment&–& Single&Plain>ff&& 00004& Employment&–& Single&Plain>ff&& 00005& Employment&–& Single&Plain>ff&& 00006& Employment&–& Single&Plain>ff&& General Practice-Specific
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    Fill in the gaps $10k Base Damages Claimed Filed in

    ‘Unfriendly’ Jurisdiction Conservative Appointed Judge Repeat Plaintiff’s Counsel $6.3k + $3.1k (Yes) - $4.4k (No) + $4.2k per case (<= 6 cases) + $0.40 per $1 claimed - $1.6k per case (7 < cases) Claim Type + $2.3k (Disability) - $7k (Age) Matter Management Matter Management Matter Management Outside Source [ ]
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    Practice- Related Data Synthesis and Transformation Interface and Interaction Task

    Norms Collaboration Culture Coordination PuQng&It&Together&
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    “…I study choice of law by analyzing the nearly 1,000,000

    contracts that have been disclosed to the Securities and Exchange Commission between 1996–2012.”
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    http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0174698 Katz DM, Bommarito MJ II, Blackman J (2017), A

    General Approach for Predicting the Behavior of the Supreme Court of the United States. PLoS ONE 12(4): e0174698.
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    (3) WE WILL GO THE WAY OF THE WORLD AND

    SEE MORE OPEN SOURCE OFFERINGS IN LEGAL
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    LEGALTECH REGTECH FINTECH INSURTECH ON THE MARGINS THERE IS NO

    REAL DIFFERENCE BETWEEN THE FOLLOWING FIELDS -
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    WHICH IS JUST A WAY OF IDENTIFYING THAT ASPECTS OF

    ‘LAW’ ARE ACTUALLY JUST FINANCE, INSURANCE IN THE FIRST PLACE …
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    Daniel Martin Katz, The MIT School of Law? A Perspective

    on Legal Education in the 21st Century, University of Illinois Law Review (2014)
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    I OUTLINE IN THIS PAPER MY VISION FOR WHAT LAW.EDU

    COULD BE ... (AND I AM NOT ALONE IN THIS VIEW)
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    ECONOMIC HISTORY TO DATE CAN BE SEEN AS A QUEST

    TO SCALE TRUST AND LOWER TRANSACTION COSTS
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    MESOPOTAMIA GREECE ROME MEDIEVAL ERA MERCHANT LAW RENAISSANCE PRE ANALOG

    ERA THE CORPORATION MARITIME LAW + INSURANCE HUNTER GATHERERS CODE OF HAMMURABI SOME EARLY TRANSACTION ENHANCING INNOVATIONS AND SOCIETIES
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    THERE ARE A VARIETY OF DIFFERENT WAYS TO DIVIDE UP

    RECENT HISTORY AND PROJECT FORWARD …
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    WE COULD DIVIDE UP THE PAST ~150 YEARS INTO THREE

    SEPARATE ERAS ANALOG ERA DIGITAL ERA COMPUTATIONAL ERA
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    INDEED HERE IS OUR BLOG WHICH HAS BEEN RUN SINCE

    2009 (FEEL FREE TO SET THIS AS YOUR HOMEPAGE) HTTPS://COMPUTATIONALLEGALSTUDIES.COM/
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    TELEGRAPH TELEPHONES INTERNET LONG TAIL COMMERCE (MERCHANT LAW TAKE 2)

    CRYPTO INFRASTRUCTURE ANALOG ERA DIGITAL ERA COMPUTATIONAL ERA INTERNET OF THINGS FIAT CURRENCY EARLY COMPUTERS GLOBALIZATION PERSONAL COMPUTERS ARTIFICIAL INTELLIGENCE AUTOMOBILE CREDIT CARDS CHARGE CARDS
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    THESE PHASES MAP REASONABLY WELL ON TO WHAT WE HAVE

    SEEN (AND WILL LIKELY SOON SEE) IN THE FIELD OF LEGAL INNOVATION
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    Contract Management Dashboard Open Contracts for Review 150 11.7% compared

    to 170 this time last year Contracts by Type NDA’s Master Service Agreements Contracts Reviewed (YTD) 1798 9.3.% compared to 1983 this time last year Input Risk Mitigated $6.4M 30.0% compared to $5M this time last year Average Cycle Time (YTD) 19 days 26.7% compared to 15 days last year Total Value of All Contracts $600.2M 29.6% compared to $500M this time last year Software Licenses Sales Agreements 602 426 246 312 Global Filters from 01/01/2017 Status to 12/31/2017 Practice Matter Type 0 7 13 20 26 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Average Contract Cycle Time Agreement Name Agreement Type Days Since Receipt Division Contracts by Complexity Low Medium High 48% 37% 15% Contracts Awaiting Review NDA Software License NDA Sales Agreement MSA John Smith HR Packet MS Jane Jones HR Packet Widget Agreement Acme Services HR IT HR Sales Team IT 3 29 8 37 56
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    “WEATHER INDEXED INSURANCE IS BASED ON LOCAL WEATHER INDICES. PAYOUTS

    ARE TRIGGERED BY THE SPECIFIED COMPONENTS OF THE INDEX RATHER THAN CROP YIELDS” https://wrma.org/weather-risk-by-application/agriculture/
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    INSURANCE CONTRACT CONTINGENCY STORED ON BLOCKCHAIN RAW SENSOR DATA (PRIVATE

    OR PUBLIC) PREPROCESSED AND SERVED UP REGULARLY CHECK FOR CONTINGENCY SATISFACTION IF CONTINGENCY IS SATISFIED INITIATE PAYMENT OR START AUDIT PROTOCOL OR PROCEED TO FINAL HUMAN APPROVAL
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    CLAIM MOST OF TODAY’S LEGAL AI BUYERS SELECT ON THE

    BASIS OF UI/UX NOT ACTUAL PERFORMANCE SIZZLE > STEAK
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    “... law firms will participate in an arms race where

    they advertise their AI models, and the future of the law business is monetizing bespoke AI models.” http://www.legalexecutiveinstitute.com/iltacon-2018-innovation/
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    FREELANCE LABOR (UPWORK, ELANCE, TASK RABBIT) SOCIAL NETWORKING (FACEBOOK, LINKEDIN)

    INTERNET BASED RETAIL (AMAZON, EBAY, ANGIE’S LIST) FINANCIAL / HR FUNCTIONS (WORKDAY, WORKFUSION) TRANSPORTATION (UBER, LYFT, SIDECAR) MOBILE PAYMENT (MAHALA, SQUARE)
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    PARTICULARLY ACROSS THE 20TH CENTURY THE LAW FIRM REPLACED A

    MUCH MORE DECENTRALIZED FORM OF INDUSTRIAL ORGANIZATION
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    WHILE AN ANALOG FORM OF PLATFORM, THE LAW FIRM ALLOWED

    FOR A DIFFUSE SET OF EXPERTISE TO BE BUNDLED AND SOLD TO A CLIENT
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    OTHERWISE THE CLIENT HAD TO ORGANIZE THE NECESSARY EXPERTS AND

    ASSOCIATED LABOR TO SUPPORT THEIR SPECIFIC LEGAL TASKS …
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    ON THE RETAIL SIDE OF THE BUSINESS … LEGALZOOM, CLIO,

    AVVO ARE ALL MAKING PLATFORM PLAYS
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