How artificial intelligence is transforming legal practice

Case study

Making the complex simple

For years, technologists have talked about the potential for artificial intelligence to transform the way law is practised, by replacing human lawyers with expert systems to automate and simplify previously time-consuming tasks. Now that potential is being realised with Allens’ first-to-market Real Estate Due Diligence App (REDDA) app.
Developed in 2016, the REDDA app has helped one of Australia’s leading law firms perform complex due diligence matters more efficiently saving many hours of lawyers’ time, with significant benefits for the firm, its clients and its staff.

Allens and their technology partners set out to build a guided application to simplify the arduous and labour-intensive process of reviewing leases and other documents, extracting essential data and automatically uploading it to a collaboration platform accessible by both clients and Allens’ staff.

The solution was the REDDA app, a bespoke integration of three systems: Kira, a machine-learning application trained to identify key data in complex documents; Neota Logic, an artificial intelligence (AI) system to apply encoded decision trees to the data; and High Q, an online collaboration platform and data visualisation tool.

How REDDA transforms the due diligence process

Source: Allens

Timely data for richer client conversations

Allens’ clients were the first to feel the benefits, with a 30% reduction in the time and cost of due diligence, and the potential for more savings to come as REDDA continues to develop. Collaborative access to data in real time gives clients and their advisers rapid visibility of key information, allowing Allens to build stronger client relationships through timely strategic conversations.

The initiative also future-proofs Allens’ services in a market where clients are increasingly reluctant to pay legal advisers to perform manual processes. While experienced lawyers continue to play an essential role at key checkpoints in the REDDA process, the time they need to spend on each transaction is greatly reduced.
REDDA also helps to deliver a consistently higher-quality product to Allens’ clients. “In the old days, consistency of a lease review by a team of lawyers could sometimes be a challenge,” says Beth Patterson, Allens’ Chief Legal and Technology Services Officer. “Using this technology, you get much better consistency across the team.”

And Allens staff have also benefitted, with less time spent reviewing documents and more time dedicated to higher value advice. “The feedback has been really fantastic, particularly from the younger lawyers,” says Patterson. “We're automating a lot of the stuff that was really boring for them … It's really been transformative in the way our younger lawyers practise law from the early part of their careers.”

Taking a multidisciplinary approach

Patterson says REDDA owes much of its success to a collaborative development process, harnessing a multidisciplinary team with a wide range of expertise. “It's really important that you have a mix of tech skills, legal skills, legal project management skills and commercial skills, because what you're trying to do is marry complex technology with complex content,” she says.

Senior support for the initiative was also vital. Patterson says that Allens partner Victoria Holthouse was an important champion of the project, which she believed would not only deliver a better outcome for clients, but would also solve an ongoing problem for the firm: writing off hours spent on due diligence.

Technology and the firm of the future

Patterson says while technology is likely to play a driving role in the evolution of legal practice, it will play out in very different ways.

“Different firms will take different paths, so there'll be a whole host of different possibilities. I think what you won't see is just the traditional model like we've had for the last 10 or 20 years, with a similar group of law firms competing. The work's getting disaggregated — that's the reality,” she says.

Patterson and her colleagues at Allens have been preparing for that changing reality by building an in-house alternative legal services offering, under the banner a+. “Equally, we've partnered with an LPO [legal process outsourcing organisation], because the problems our clients are asking us to solve are not one size fits all. So we will have a bundle of options for our clients in the future,” says Patterson.

Patterson says REDDA also reflects the potential for law firms to become more wide-ranging corporate advisers, by providing critical data for decision-making. “Data is the new oil,” she says. “Once you've captured that data in a structured way, you can analyse it, then use it to solve other needs as well.”

Meanwhile, Allens’ LawLab research team will continue to leverage the lessons from REDDA in a wide range of practice areas, including compliance, litigation and risk management. According to Patterson, that not only benefits clients, but it can help Allens secure the talented people it needs to flourish in a changing market.

“This is an important part of a strategic program to attract and retain talent in firms like Allens who will need to become more agile and flexible in the future.”

Three tips for firms seeking to harness new technologies.

  1. Be open to change. The industry is moving rapidly, so you need to be open to the possibilities.
  2. Build a structure to support multidisciplinary teams.
  3. Embrace design-thinking principles and an agile culture.
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