Lack Of Digitisation Of Data A Major Constraint In The Broad Adoption Of AI In Legal Sector

Can LegalTech be the new FinTech? It’s a question that has been doing the rounds for sometime in the Indian legal sector. In an earlier article, we had mentioned how artificial intelligence has become a game-changer in the Indian legal industry. For example, India’s leading firm Cyril Amarchand Mangaldas recently partnered with Kira Systems to leverage the power of AI for contract analysis. On the other end of the spectrum are startups like CaseMine and NearLaw who are applying emerging technologies to legal research and contract analysis.

Even though there is a keen interest around leveraging AI adoption in the legal sector, India is yet to mainstream the technology. At a recent International Conference on Law and Regulation of Artificial Intelligence, Dipak Misra, Chief Justice of India talked about the advantages of AI in law and how with the right talent, technological resources and most importantly legal directive, India could have strong leadership in AI.

For example, one of India’s leading firms, Cyril Amarchand Mangaldas (CAM) leverages AI-based tools for contract management and due diligence. Recently, the law firm was in the news for launching India’s first, AI-focused legal tech incubator called Prarambh that will focus on solutions in the area of legal research, contract management, compliance and dispute resolution among others. The six month incubation program will be based out of New Delhi and will be extended to other locations later. According to a company statement, initially 3 to 4 high-potential startups will be selected which will be supported by Prarambh to bring ideas to fruition, and guided to make them a commercial success. The incubator will also be guided by a board of ‘mentors’ assembled by CAM for this purpose.

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According to Cyril Shroff, “During our initial exploration, we found that a great deal of legal technology being used in other jurisdictions is not fully suited to the Indian legal market. This means there is both ‘need gap’ and an ‘adjustment gap’ that we are seeking to fill. CAM also believes that there is a deep pool of undiscovered and under-supported legal and technology skills in India that can be fostered to fill this gap. I am extremely confident that Prarambh has all the ingredients to radically transform legal-tech landscape impacting both transactions and dispute resolution, CAM is setting the ball rolling for emergence of India as an important player in this legal technology domain.”  

We spoke to Parimal Chanchani, CEO and co-founder, Practice League to understand the potential benefits of AI in legal tech and how law firms in India have to take the big leap to implement AI and automation solutions. Practice League, Pune-based law firm which is a leading provider of Enterprise Legal Management Solutions has adopted IBM Watson to develop an advanced AI engine with NLP and machine learning capabilities. By integrating AI capabilities, Practice League automated their current manual processes to provide an end-to-end intelligent platform.

Talking about the use of AI in the legal sector in India, Chanchani shared, “Though firms are using AI, it is currently only used for data abstraction piece or just summarisation. In fact, so far the use has been limited to reading judgements and providing the best way forward. AI engines are still in the learning phase in the legal ecosystem. Also, AI engines need to learn a lot of documents of certain types for certain industries for them to be able to give accurate prediction and analysis”.

How the legal sector is different from other sectors is that at an enterprise level, AI-powered abstraction and summarisation happens at a very fast pace. However, at law firms, emerging technologies are used mainly for due diligence, but true cases will come up only after a good year or so when AI learning matures, Chanchani shared.

IBM Watson@ Practice League

At Practice League, Watson technology is used for extracting clauses. Primarily, IBM Watson is used for data abstraction, for example reading the contract and its analysis. “Though we have deployed the technology, we are in the stage of training clients of how to make the engine learn itself,” he shared. Currently, the AI engine is in the learning phase and it is now moving onto a stage for the summary. “We primarily used it for contract and contract abstraction but now we are moving to stage where we are going to summarise things based on what we have understood out of those limited contracts. But again, we need 100 thousand of agreements for Watson to even predict it close to 60% or 70% accuracy,” he shared.

On the blockchain front, the company has built a platform called the Practice League Blockchain Platform with a vision to make regular contracts live and self-executing. “So, whatever contract is there on your soft copy today or in a file, we want it to be a live contract. When I say live contracts it entails a lot of things, so that’s where we are using Blockchain in which we get all the identities and contracts stored in a centralised location. The use case will be executing certain types of contracts automatically, for example, if the finance department has approved a purchase order as per the requirement status, it will actually trigger off payment request in the ERP system itself,” he shared.

At Practice League, one of the major goals of the founders has been to build an ecosystem and a unified intelligence platform for the enterprise sector. “With embedded AI through IBM Watson we are integrating, we are enabling other stakeholders in this ecosystem to take advantage of enterprise legal management platform which comes with 10 major functionalities,” he shared.

Challenges in India’s Legal Sector

One of the primary reasons for slow AI adoption in India is the lack of digitisation of data available. “So, till today everything is still not digitised format, for example, the forms or the agreements. In India, it is still a challenge to get your hands on legal data, say from high court from this year to this year in a single CD,” he shared. Another key constraint is that Indian law firms lack the software muscle to automate legal processes and adopting these solutions requires a significant investment.

Meanwhile, as compared to the US and Canada, where adoption of AI in the legal sector is growing at a rapid pace, India is yet to arrive at a stage where AI will be mainstreamed. “We are yet to arrive at a stage where AI will actually predict things, analyse risk or even drafts agreements for law firms automatically, or even answer legal queries automatically,” he said, in closing.

Richa Bhatia
Richa Bhatia is a seasoned journalist with six-years experience in reportage and news coverage and has had stints at Times of India and The Indian Express. She is an avid reader, mum to a feisty two-year-old and loves writing about the next-gen technology that is shaping our world.

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