THE USE OF CHATBOTS AS A WAY TO CREATE A TWO-STEP APPROACH TO PROVIDING LEGAL SERVICES: CASE STUDY
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Elizaveta Shesterneva*Contributor of LawTech.Asia and graduated with an LLM degree from the Singapore Management University School of Law in 2019. She is admitted to practice in Russia and currently works at Promsvyazbank PJSC as a lawyer with a focus on international business law. The author has written this paper in her personal capacity and all views or opinions expressed in this paper solely belong to the author.
Chatbots have already been deployed by law firms and Legal Technology (‘LegalTech’) start-ups to perform some law-related activities as a way to provide better assistance to clients. The widespread use of chatbots may further deepen existing issues relating to the scope of legal functions chatbots undertake, the unauthorised practice of law and the competitiveness in the legalsector. This paper examines the aforementioned issues and suggests a two-step approach to providing legal services which incorporate the use of chatbots with help from qualified attorneys. The goal of the suggested two-step approach is an attempt at a peaceful collaboration between technology and legal professionals, where the use of chatbots do not threaten the ‘status-quo’ of qualified persons, but rather, encourages further innovation in the legal profession.
According to a recent Ernest & Young report on reimagining the legal function,1Cornelius Grossmann, ‘Why the Legal Function Must Be Reimagined for the Digital Age’ (Ernst & Young, 17 June 2019) <www.ey.com/en_gl/tax/why-the-legal-function-must-be-reimagined-for-the-digital-age> accessed 20 April 2020. the legal sector is faced with an urgent need to capitalise on technology. If it does not, it will be at risk of falling behind the human resources, information technology and finance functions that are picking up on technology trends more freely.2ibid. One of the ways to introduce further technological development to the legal field is to encourage the use of chatbots.
The American Bar Association defines a chatbot as a “computer program that automates a conversation or task.”3Thomas G Martin, ‘Marketing Automation for Lawyers’ (American Bar Association, 1 March 2019) <www.americanbar.org/groups/law_practice/publications/law_practice_magazine/2019/MA2019/MA19Martin/> accessed 10 April 2020. One of the key features of any chatbot is the use of natural language processing.4The Law Society of the United Kingdom, ‘Chat Show: How chatbots can grow your business’ (The Law Society, 11 January 2019) <www.lawsociety.org.uk/news/stories/chat-show/> accessed 03 May 2020. Chatbots are usually powered by the following:
- Searching for a reply after a user has asked a question.
- Natural language processing that allows a chatbot to understand the question posed by a user; sometimes, this form of technology can include voice recognition.
- Artificial Intelligence which allows a chatbot to ‘learn’ from a user’s input and come up with new responses.5ibid.
There are other ways to define chatbots and bots. One of the most important definition comes from the California Senate Bill No. 1001 which became a part of the California Business and Profession Code.6California Business and Profession Code § 17940 (2018). This document operates with the following definition:
“Bot” means an automated online account where all or substantially all of the actions or posts of that account are not the result of a person.7ibid.
The definition of a person under the California Business and Profession Code is broader, and includes any legal entity, be it a natural person, corporation, government entity or some other related figure operating under the umbrella of ‘personhood’.8ibid. The main reason for enacting this Bill was to protect Internet users from misleading or false information, as well as false advertising.9California Senate Committee on Business, Professions and Economic Development SB-1001 Bots: Disclosure (2018). This objective explains why the definition of a ‘bot’ is limited to automated online accounts, even though previous versions of the Bill had a broader definition that identified bots as a form of computer software. Bots that Internet users come across most frequently when obtaining information tended to be in the form of automated online accounts, or the colloquial ‘chatbot’, rather than the products of complex computer software.
The Bill prohibits the use of bots that may mislead persons they communicate with, since the bot is an automated online account rather than a typical person.10California Business and Profession Code (n 7). Disclosure of bots are required to be clear and conspicuous, in order to inform persons with whom the bot interacts that it is a bot11ibid.. The California Senate Committee on Business, Professions and Economic Development illustrated situations where a person communicating in a customer support chat may not realise that he is conversing with a bot, or situations where Twitter users are unaware of content generated by a bot. These are examples of scenarios that could cause confusion.12Senate Committee (n 9) 4.
The California Senate Bill No. 1001 was the first example of a piece of United States (‘US’) legislature that would explicitly require bots to be identified as such. The passing of this bill shows that bots and chatbots have become a part of people’s day-to-day lives, therefore requiring the enactment of legislation to act as a form of protection for people. It also means that chatbots are becoming more developed – if there is even an issue of distinguishing them from natural persons, or in other words, humans.
II. THE SCOPE OF THE LEGAL WORK PERFORMED BY CHATBOTS
The next question that arises would be whether chatbots are capable of acting as lawyers since they are capable of acting as humans. In fact, this question leads to two different issues. First, are chatbots intelligent enough to be performing legal tasks? Second, is there a legal possibility for them to act as lawyers or other legal professionals?
Professor Stephen Mayson describes the divide between lawyers and non-lawyers as follows: There is an insidious consequence of believing that lawyers are the best, or only, resource for all tasks, that it downplays and demeans input from ‘non-lawyers’, whether ‘non-lawyers’ refer to another person, technology, a process or management. It is not surprising that there is an ‘us and them’ divide between lawyers and others, that inefficiencies persist, or that potential remains unrealised, when such an unhelpful and insulting attitude is prevalent.13Stephen Mayson, ‘Restoring a Future For Law’ (Stephen Mayson, October 2013) <https://stephenmayson.files.wordpress.com/2013/10/mayson-2013-restoring-a-future-for-law.pdf> accessed 03 May 2020.
Indeed, legal professionals have met their fair share of critique in recent years. Opinions about the deskilling of lawyers have been voiced amongst members of the legal community.14John Flood, Will There Be Fallout from Clementi? The Repercussions for the Legal Profession after the Legal Services Act 2007, (2014) 2012 Michigan State Law Review 537. However, this does not mean that lawyers are incapable of change. Traditional institutions can be modernised and technology is an example of such
modernisation that is already happening to the legal profession.
Specifically, various chatbots are being designed by both law firms and LegalTech start-ups alike. For instance, the Australian office of Norton Rose Fulbright introduced a chatbot named Parker in the beginning of 2018.15Norton Rose Fulbright, ‘NRF Parker Chatbots‘ (Norton Rose Fulbright, April 2019) <www.nortonrosefulbright.com/en/knowledge/publications/b3667e00/nrf-parker> accessed 25 March 2020. It answers questions relating to mandatory data breach notification schemes available in Australia. Other chatbots have also been developed to respond to questions regarding a new trademark law, mandatory data breach regulations in Canada, and the Insurance Distribution Directive in Europe.16ibid.
A chatbot known as LISA is a Non-Disclosure Agreement (‘NDA’) generator that was created with the idea of supporting small-scale entrepreneurs who may not be able to afford a lawyer.17Claudia King, ‘5 Lawyer Bots You Can Try Now’ (Automio, 2019) <https://autom.io/blog/5-lawyer-bots-you-can-try-now> accessed 03 April 2020. LISA is advertised as ‘the world’s first truly impartial AI lawyer that simultaneously helps both parties involved in a legal matter.’18Robot Lawyer LISA <http://robotlawyerlisa.com/nda/about-lisa/> accessed 03 April 2020. Moreover, when explaining how LISA works, the description on the website states that ‘[t]he human lawyer’s brain can be captured, harvested, exploited and scaled to benefit you!’19ibid. This description suggests that there is an underlying assumption that a human lawyer would not be able to help small-scale entrepreneurs, probably because his or her fees are too expensive. Therefore, LISA steps in to assist these clients. This approach contains both advantages and disadvantages. It addresses one of the common critiques against the legal profession (i.e. that legal services may not be affordable to everyone). At the same time, it creates competition, whether real or perceived, between regular human lawyers and a so-called ‘AI lawyer’.
Other examples of chatbots include LawGeex, which is a contract review system that identifies problematic contract clauses by examining the wording of a particular sentence to understand legal language and its implications. The questionable clauses are flagged by the algorithm and a different wording is suggested. The revised contract can then be converted to Microsoft Word, making the process of implicating amendments easier for a lawyer, a paralegal, a contract specialist or any other user of this contract review system.20LawGeex, ‘The Contract Review Platform That Means Business’ (LawGeex, 2020) <www.lawgeex.com/platform/> accessed 03 April 2020.
There are other types of chatbots that can be used and are being used by lawyers today. These chatbots can conduct introductory surveys to identify problems that clients are facing, cite necessary laws and regulations, perform legal research, review contracts, mediate and draft agreements. What remains questionable is whether these chatbots can provide legal advice and perform the whole scope of legal work that lawyers do. Algorithms are complex creatures, but so are laws. The chatbots that exist today are being designed to answer a particular type of questions or perform a particular type of legal task. It is hard to imagine, for instance, a legal chatbot that may assist a client in a divorce procedure from start to finish, including providing initial legal advice, drafting the necessary documents, representing a client at court and walking a client through all the difficulties of the process.
While chatbots cannot simulate the role of lawyers and other legal professionals entirely, there is no reason why chatbots should not be allowed to perform some parts of traditional legal services. In performing such legal tasks, chatbots may be obliged to follow pre-existing rules and regulations that have governed the legal profession, even before the development of computer software programmes. This is where the second question arises – is there a legal opportunity for chatbots to perform legal services?
III. THE LAWYER AS A NATURAL PERSON
It is no surprise that different jurisdictions have different requirements when it comes to establishing rules rregarding the legal profession. For instance, attorneys in the US have reserved rights to appear in courts, provide legal advice and draft legal documents in the states where they are qualified.21Kendra L Basner and others, ‘Regulation of the Legal Profession in the United States: Overview’ (Thompson Reuters Practical Law, 1 April 2018) <https://uk.practicallaw.thomsonreuters.com/2-633-6340?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1> accessed 20 April 2020. However, other states may grant foreign lawyers the opportunity to practice as Foreign Legal Consultants, while some states may waive the bar examination requirements for individuals who have graduated from particular universities.22ibid. Therefore, even though different restrictions can exist within the same country, the states usually treat legal practitioners as natural persons.
The same holds true with regard to the Legal Services Act 2007 in the United Kingdom (‘UK Legal Services Act 2007’).23Legal Services Act 2007. Section 13 of the Act is titled [e]’ntitlement to carry on a reserved legal activity’.24ibid s13. The section entitles ‘a person’ to perform a reserved legal activity. While the scope of the reserved legal activities in this section is slightly different from that in the California Bill (i.e. for instance, it includes probate and notarial activities), both pieces of legislation25ibid. clearly mean a natural person when they use the word ‘person’.
The Singapore Legal Profession Act also operates with a definition of a ‘qualified person’.26Legal Profession Act (Cap 161, 2009 Rev Ed). Moreover, the Act specifically mentions individuals when it provides an interpretation of a foreign lawyer.27ibid s 2. It is likely that that other countries have adopted similar definitions of attorneys or lawyers. Usually, attorneys or lawyers are defined as persons or individuals, while on the contrary, chatbots do not possess personhood or individuality.
Nevertheless, under certain circumstances non-lawyers can provide certain legal services. This will be illustrated as we examine issues of the unauthorised practice of law and the standardisation of requirements of the legal profession across jurisdictions.
A. Unauthorised practice of law (‘UPL’)
In recent years, many countries have made efforts to ease the process of cross-border legal services. For instance, the ASEAN countries concluded an Agreement on the Movement of Natural Persons in 2012.28ASEAN Agreement on the Movement of Natural Persons . This agreement granted legal professionals the opportunity to temporarily enter and stay in another ASEAN jurisdiction. In particular, Singapore introduced rules regarding foreign lawyers early in 1999, when the Joint Law Ventures and Formal Law Alliance schemes were introduced.29Sarjit Singh Gill and Shirin Swah, ‘Regulation of the Legal Profession in Singapore: Overview’ (Thompson Reuters Practical Law, 1 February 2020) <https://uk.practicallaw.thomsonreuters.com/w-009-1078?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1> accessed 20 April 2020. The goal was to allow local firms to easily collaborate with foreign law firms in situations where cross-border transactions involved multiple jurisdictions. In 2005, the Third Committee on the Supply of Lawyers suggested that Singapore law firms should hire foreign lawyers who would later be able to obtain a Singapore qualification. Currently, students who have graduated from scheduled universities in the United Kingdom (‘UK’), the US, New Zealand and Australia can be admitted to the Singapore Bar. In addition, individuals who are registered to practise law in a foreign jurisdiction can be registered with the Legal Services Regulatory Authority (‘LSRA’) as a foreign lawyer under the Legal Profession Act to practise foreign law in Singapore.30ibid.
The aforementioned UK Legal Services Act 2007 is another example of legislation that seeks to ease the restrictions on the legal profession.31Legal Services Act (n 23).. Under this Act, Alternative Business Structure (‘ABS’) firms are permitted to operate. Under the ABS structure, non-lawyers received the right to participate in the management and/or ownership of ABS firms. This means that lawyers can become equal partners with non-lawyers and work together to create a new model of providing legal services which could incorporate the creative use of technology.32Judith A McMorrow, ‘UK Alternative Business Structures for Legal Practice: Emerging Models and Lessons for the US’ (2016) 47 (2) Georgetown Journal of International Law 665. This is especially so since there is a growing market for legal technology such as legal information analysis, which is a different type of service than that traditionally offered by large firms.33ibid.
The UK Legal Services Act 2007 addresses the issues arising from the unauthorised practice of law in the UK. The definition of the ‘unauthorised practice of law’ is narrow and an offence may be committed if an individual engages in ‘reserved legal activities’ when he or she is not permitted to do so.34Laurel S Terry, ‘Putting the Legal Profession’s Monopoly on the Practice of Law In a Global Context’ (2014) 82 (6) Fordham L. Rev. 2903, 2913-14. There are also requirements that need to be satisfied before an individual is entitled to the designation of ‘solicitor’ and ‘barrister’. However, the rules are overall slightly more flexible.35ibid.
In comparison, regulations relating to the unauthorised practice of law in the US appear to be more strict.36Directorate for Financial and Enterprise Affairs Competition Committee, Protecting and Promoting Competition in Response to “Disruptive” Innovations in Legal Services (Organization for Economic Co-operation and Development, DAF/COMP/WP2/WD(2016)6, 2016 For instance, nearly in the middle of the 20th century, the New York courts had decided that a book containing legal forms could not be recognised as an unauthorised practice of law. The Court of Appeal held that this was so, since no “personal contact or relationship with a particular individual”37People v Divorce Associated & Publ’g Ltd 407 NYS 2d 142 (1967) or ‘relation of confidence or trust so necessary to the status of attorney and client’38ibid. were involved.
However, a few decades later, in 1999, a federal district court in Texas was faced with the issue of whether a software programme designed to assist users in filling out basic legal forms constituted the unauthorised practice of law.39Unauthorized Practice of Law Committee v Parsons Technology, Inc 179 F 3d 956 (1999). The court held that services provided by the software program amounted to an unauthorised practice of law, and ruled in favour of the UPL Committee. The case later went to the US Court of Appeals for the Fifth Circuit where it was returned to the district court, because the Texas Legislature enacted an amendment to the Texas government Code stating that ‘the ‘practice of law’ does not include the design, creation, publication, distribution, display, or sale … [of] computer software, or similar products if the products clearly and conspicuously state that the products are not a substitute for the advice of an attorney.’40Texas Government Code 1999.
A similar fate awaited a famous LegalTech start-up called LegalZoom that operates across the US and has to comply with unauthorised practice of law requirements from various states. Their website shows the following description:
The nature of the services provided by LegalZoom raised some concerns with regard to whether some parts of the disclaimer amounted to legal fiction. LegalZoom assists users in preparing corporate documents, wills and trusts, and filing for bankruptcy, amongst other services. The documents are tailored to the user’s needs, which would likely require a functional legal analysis.42McMorrow (n 32) 696. It is inevitable for legal technologies to provide services that infringe upon UPL conditions and as such, it is difficult for legal technologies to operate under strict UPL conditions.
The Federal Trade Commission and the Antitrust Division of the US Department of Justice both shared the view that interactive software programmes for generating legal documents can provide consumers with more effective and less cost-consuming ways of resolving their legal issues.43Federal Trade Commission and Department of Justice, Reply to the Honorable Bill Cook, North Carolina State Senator, District 1, in regard to North Carolina HB 436 (10 June 2016). In general, they agreed that “overboard scope-of-practice and unauthorised-practice-of-law policies can restrict competition between licensed attorney and non-attorney providers of legal services, increasing the prices consumers must pay for legal services and reducing consumer choice.”44ibid. This point of view appears to be justified. It should also be noted that many state doctrines, regarding the unauthorised practice of law provide that lawyers can delegate some activities to be completed by non-lawyers under the lawyer’s supervision.45McMorrow (n 32) 678. However, the most notable exception is that court appearances cannot be delegated to non-lawyers under any circumstances.
In the Western Australia case of Legal Practice Board v Giraudo,46Legal Practice Board v Giraudo  WASC 4. Clinton Giraudo assisted Mr Domney in the resolution of two disputes pertaining to a car repair business. Giraudo had written letters to Mr. Domney where he had listed various ways of resolving the disputes. He had also prepared the court documents and attended pre-trial conferences with Mr Domney. However, he was not qualified as a legal practitioner. In court proceedings relating to him engaging in the unauthorised practice of law, he claimed that he was acting as a mere secretary. The Court did not support this argument, stating that ‘Giraudo was acting essentially as a solicitor who was the guiding intelligence behind the legal proceedings.’47ibid. This analysis also appears to be suitable when determining a possible approach in relation to legal chatbots. They cannot serve as a guiding intelligence since they are designed by humans. Lawyers should maintain control over the use of bots in their day-to-day practice, instead of feeling threatened by them.
B. Two-step approach to providing legal services
One of the reasons for the enactment of the UK Legal Services Act was the fact that in 2006 alone, the Law Society of England and Wales received nearly 17,000 complaints from clients who were dissatisfied with their lawyers. The most common reasons cited for these complaints included rudeness, arrogance, lack of communication, higher bills than were expected, as well as incompetence.48Flood (n 14). It is clear that these complaints did not go unnoticed with the enactment of the UK Legal Services Act in 2007. This proves that the legal profession is capable of changing and adopting new models of providing legal services.
John Flood, a Professor of Law and Sociology at the University of Westminster, proposed a ‘Tesco law’ model as a thought exercise: Suppose Tesco decides to offer legal services. It could have a section near the doctor and pharmacy, bright lit, a warm welcome, comfy chairs, and familiar surroundings. Prices will be clearly marked along with the month’s special offers and no mention of billable hours anywhere. Even the checkout clerks could be primed to spot potential customers. If a credit card is rejected at the cashier, the cashier could recommend the customer to get some help with debt management. There could be special offers held after Christmas, where many people spend a lot, in order to help customers with the debt they incurred over the holiday season. It is a captive market that benefits from such economies of scale that no single lawyer will be able to compete with on price or service.49ibid.
Of course, this is presented as a hypothetical scenario. However, the essence of this situation is the appealing idea of providing legal services quickly and to a large audience especially in the present time, when the legal industry is faced with a challenging and competitive landscape. We have seen how law firms are introducing LegalTech, including legal chatbots, to distinguish them from other legal service providers. While some firms embrace legal technology, others are cautious of the technology that is being introduced into their work life.
Many either view legal chatbots as the enemy or as a useful assistant in providing services of greater quality. In both situations, the use of chatbots thus far has been too narrow. Firms choose to either completely avoid the use of legal chatbots or rely entirely on legal chatbots to provide quality services. Even though there have been improvements in collaborations between legal firms and alternative legal service providers, the extent of collaboration is insufficient. A possible two-step approach would be to introduce a chatbot platform where a user could converse with a chatbot that would cite necessary laws and regulations and provide customised assistance to the user’s particular situation. This is the first step. The second step would commence when the user introduces specific details and circumstances to the conversation that would be too difficult for the chatbot to comprehend. The chatbot would then advise the user to contact a lawyer. A legal professional or a law firm will then be chosen by the user using the same chatbot. The human legal service providers would be connected to the chatbot platform approximately the same way drivers are connected to Uber.
This model can become part of initiatives that encourage the use of digital innovation, such as the ‘Smart Nation’ digital revolution in Singapore.50Smart Nation Singapore, ‘Transforming Singapore Through Technology’ (Smart Nation Singapore, 23 April 2020) <www.smartnation.gov.sg/> accessed 03 May 2020. For example, the Singapore government already uses different types of algorithms to provide users with quick information on taxes and immigration rules. There is a possibility for a similar chatbot platform to be created and managed by the government. The disclaimer on the platform should notify users that they are having a conversation with a chatbot, provide the list of circumstances where lawyers would be involved, as well as a transparent list of fees that is presented in a manner that is easy to understand. There must also be an explanation that the users are not receiving legal advice through the chatbot, but are merely going through the first part of receiving legal assistance where their enquiries are answered.
The proposed two-step approach would also eliminate concerns relating to the unauthorised practice of law. The conversation would be general enough so that no situation where something akin to attorney-client privilege is likely to arise. The chatbot would forward the conversation to a human lawyer after the user provides preliminary details. It would also not constitute a relationship with a particular individual beyond the usual scope that a chatbot would require for machine learning. Finally, legal professionals would be involved at every step, apart from the initial stage, and the requirement of having a lawyer’s supervision would be fulfilled.
Apart from the legal practitioners who would subscribe to the platform, legal technologists should be involved in the maintenance of the chatbot. This team would periodically review the chatbot’s replies to ensure that they are logical and generally correct. The team should also be responsible for monitoring the chatbot so that it would not go rogue and start providing hateful or racist remarks, for instance. This could potentially occur due to biases inherent in the datasets used to train the artificial intelligence in complex chatbots, or where sensitive legal information is disclosed.
At the same time, the involvement of a team of legal technologists who would be responsible for chatbot maintenance does not necessarily mean that competitiveness between LegalTech start-ups and traditional law firms will erode. The objective behind such a chatbot platform is to promote innovation and to provide better service to clients. Chatbots are available 24/7; they are capable of being more patient and polite than lawyers. This is an example of a technological innovation that could bring about immense benefits to the legal industry, if implemented correctly.
One of the most important concerns when it comes to implementing chatbots to the legal services industry is the interests of the consumers. The system should not be used to mislead a potential client into thinking that he is talking to a legal professional, either qualified attorney or, for example, a paralegal. Such a user should be guided through the process at every step of the way. The team of legal specialists is still supposed to act as a guiding intelligence behind the legal proceedings. Later, when the user complicates the conversation with specific details, the case should be transferred to the human lawyers who would be responsible for creating the relationship of trust with the client. Those requirements are also necessary to eliminate concerns related to the unauthorized practice of law.
Some jurisdictions have more flexible rules when it comes to alternative legal services providers, such as the UK that has enacted a new Legal Services Act fairly recently. Others, such as the majority of the states in the US, have stricter rules when it comes to providing legal services. As a result, such platforms could be first implemented in the countries and states that already have some experience when it comes to regulating various types of alternative legal service providers. However, we can see how different law firms and start-ups are using chatbots in multiple jurisdictions. For instance, a chatbot designed by Norton Rose Fulbright can provide replies on legal issues related to Australia, Canada and European Union.
Currently, the LegalTech scene is very driven, but also chaotic at the same time, because various legal technologies are being tried out by different players of the field, such as traditional law firms, start-ups, and public institutions. The use of combined models where different law firms are involved on equal footing between each other and legal technologies are also being used can potentially promote innovation and stability.