October 4, 2022

Legal Chatbots and Increasing Productivity of Legal Practice

I.            Introduction

Although the trend in recent years is changing, the “time is money” aphorism is still present among lawyers since most of them charge for their services on an hourly basis. However, not every task of running a legal practice is billable, in fact, most of them are not. 2020 Legal Trends Report found that law firms only spend an average of 2.5 hours each day on billable work. To increase revenue and client satisfaction, most lawyers work more time than they were planning, which results in being overworked and less productive. With that being said, the challenge for law firms is how to decrease or eliminate routine tasks, do more billable work, and be available to clients as much as possible for more meaningful work, or to put it simply: “How can a law firm increase income through providing same or higher quality of services, but work and spend less?” One of the answers is legal chatbots.

II.            What are legal chatbots?

Chatbots can be found in almost every work field, including the legal industry. In their most basic definition, chatbots are computer programs designed to emulate conversation with human users, especially over the internet.

A chatbot for lawyers is a time-saving automation tool that`s hosted on a law firm’s or any other legal service provider`s website and is usually available 24/7. Legal chatbots can handle not only simple and repetitive legal tasks, they can also take part in more complex legal duties like document or process automation. Some more advanced bots are based on artificial intelligence (AI), allowing them to learn as they interact with more people and thus improve their communication based on previous communication (experience).

Chatbots can for example arrange meetings with clients, help with quick legal advice, automate lead generation, do legal research, create legal documents, track time, take care of due diligence, book appointment for new clients and set up legal consultations with them, collect information for blog content ideas, etc.

Widespread implementation of legal chatbots may not be imminent, but it is very likely to occur at some point. Chatbots, however, will not replace human lawyers in the short term and are unlikely to this in the long term as well.

III.            Benefits of using legal chatbots

Essentially what legal chatbots do is help lawyers with routine tasks to free up their schedule for more meaningful work, all with the purpose to increase the quality of legal services and generate more billable hours. They can either unburden lawyers and staff of administrative work or provide basic legal advice directly. They are a great way of optimizing a work process to save lawyers time and money.

What are the main benefits of using legal chatbots?

·        Access to information 24/7

·        Improve client-centred experience

·        Simplify legal information for website visitors

·        Increase lead generation

·        Reduce service cost (no added costs of human intervention)

·        Capture relevant case details

·        Get first-hand information on what a potential client want and categorize the case

·        Providing (basic) legal advice

·        Help establish a law firm with a niche

Based on the information and feedback received from the chatbot system, legal chatbots can enhance efficiency and legal service provider profitability while providing a better experience for clients.

IV.            Things to consider

Legal chatbots can be a helpful tool, yet there are certain things law firms and legal service providers need to consider before using them.

Using legal chatbots for client interactions and performing legal services through the chatbot can require changing the fee structure since the hourly fee structure is not most appropriate for this type of service. Clients will presumably need to pay either a regular subscription or a fee per interaction with the bot. In both cases, the fee will likely be lower than the fee clients pay when interacting with human lawyers, which makes sense since the only cost is maintaining the legal chatbot system. To increase the revenue through chatbots, law firms will therefore need to get and support a much higher volume of clients.

The second thing to consider is hiring non-lawyer staff such as technical teams, marketers, and business developers to support the new technology.

Lastly, there are some ethical considerations to take into consideration. Law firms will need to ensure the security of a chatbot`s input and output databases. Client data needs not only to remain private and secure but also clients need to be informed what exactly the data is going to be used for.

V.            Practical application of chatbots

John works for a Slovenian company. In Slovenia, the employer must pay the employee who has the right to annual leave a holiday allowance at least in the amount of the minimum wage. John`s employer has issued him a pay slip but has not paid the holiday allowance that is calculated on it within the statutory period. John can thus, by Slovenian law, file an enforcement action based on an authentic document (the pay slip), without a lawsuit in the labour court. However, he doesn’t know how to do that alone so he seeks help from a law firm.

This law firm has realized that John`s issue is not unique and has created a legal chatbot on their website for clients like John. The chatbot guides the client to fill out the applications for enforcement without the help of a human lawyer, which makes the process much easier for the client and saves the law firm`s time. John can get his holiday allowance quickly and easily, paying just the small amount of fee for using the law firm`s chatbot.

VI.            Conclusion

To conclude, legal chatbots have a great potential to make lawyers’ lives easier by taking over administrative and other routine tasks, satisfying clients, and enabling lawyers to do mostly billable work. Nevertheless, law firms need to consider changing their business plans, restructuring fees, and ensuring the safety and security of client data.

Are legal chatbots going to change the legal industry for the better? What do you think? 

This Article was prepared by Ines Polak.

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About Ines Polak
Ines is Slovenian LegalTech enthusiast who just started to explore the field LegalTech and has an interest in international law.

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