A recently launched law firm has built its business on the latest technologies to cut the cost and to shake up the business model for managing large business transactions.
The business law sector faces huge transformation as startup companies use technologies such as artificial intelligence (AI) to transform a sector based on age-old business models and legacy technology.
Simon Leaf, lawyer and co-founder at Three Points, which specialises on managing large business transactions, said the company’s approach puts the latest technology at its core. Large law firms are adopting technology but are failing to fully take advantage of it and instead remain reliant on large numbers of expensive lawyers, he told Computer Weekly.
“There are a lot of bigger law firms out there that like to talk a good game when it comes to using and adopting technology, but there are very few that are living and breathing it,” said Leaf.
He said that traditionally law firms pay bonuses based on a lawyer’s billable hours, which he said “disincentivise” them to use technology to do things better and faster, adding: “Not everyone working in a law firm thinks like that, but generally the mindset is still stuck in the 20th century rather than embracing technology and being able to use it.”
Furthermore, he said these firms use legacy technologies, which can hold them back.
ChatGPT for lawyers
Three Points is using a platform from Swedish legal tech business Legora, which Leaf descried as being “like a ChatGPT for lawyers”, but in a private cloud which meets all regulatory requirements.
The technology reduces costs and speeds work at the early stages when repeatable processes are involved. The human skills come in at the beginning of an engagement, in preparing the AI for its role, and again at the end when a senior lawyer comes in to check and finalise everything.
“These [AI] tools are great, but they’re not at that level where you can just sit back and do nothing. They get you probably 70%, 80%, sometimes 90% of the way there, but you also need real expertise on top of it,” said Leaf.
“Rather than having to reinvent the wheel every time you review a contract or a set of terms that comes in, we have setups, processes and prompts that let us do that in a much more efficient way. It cuts out a lot of the time and the cost early on in transactions, particularly for large tech transactions, and it gets you to a level much more quickly and efficiently, so a senior lawyer can then come in.”
Leaf said the company has had to hire far fewer people to get going than a traditional law firm specialising in transactions would be required to do. He said traditionally Three Points would be recruiting very early on in the journey.
“But with the use of the technology that we have and the prompts that we’ve set up and the other workflows, we’re less likely to need more junior staff,” he added. “There will still be a need for mid to senior level lawyers with other kind of experts that can come in and work with the technology, like a human-at-the-helm type of approach.”
Early career risk
When asked about the risk of the next generation of lawyers in the field being unable to start their careers and learning as a result of AI, Leaf said: “It’s a fair point and I don’t have all the answers on that. What I can talk about is the market that I operate in, which tech transactions, commercial contracts world, where generally speaking teams would be pretty lean.
“We’re not talking about the big kind of M&A listings or big disputes, where I suspect there’ll still be a need for junior lawyers, but certainly in the kind of narrow sphere that I operate in, there will be less of a need.”
AI is gradually finding its way into the legal sector. Earlier this year, a legal firm based on the technology, which can complete a legal claim process with virtually no human involvement, was granted approval from the Solicitors Regulation Authority (SRA), which described it as a “landmark”.
Garfield AI, as the company is known, was founded by a technologist and a lawyer with the initial aim of providing a service for small businesses to claim billions of pounds in unpaid invoices. The AI litigation assistant, which initiates and manages small claims litigation, was hailed by the SRA as the arrival of “the first law firm providing legal services through AI”.
