IBM Watson in Quiet Talks With Law Firms to Expand AI Offerings

The makers of IBM’s Watson artificial intelligence tool have been in quiet, informal discussions with a small group of prominent law firms in a bid to launch an expansion of offerings for firms and to help them collaborate around AI.

IBM until now has been mostly content to focus its legal business marketing of Watson—arguably the world’s best-known AI system—to legal departments within large corporations, Brian Kuhn, co-founder and global leader of the Watson legal practice at IBM, said in a Jan. 30 interview with Bloomberg Law.

Though IBM has a select number of arrangements with U.S. and U.K.-based law firms already in place—which Kuhn, citing non-disclosure agreements, declined to detail—the company is preparing for a larger-scale entrance into the American and British law firm markets. Kuhn said IBM Watson Legal, the legal services branch of Watson, will make an announcement on the matter sometime in 2019.

Several of Watson Legal’s clients to date have been in insurance industry legal departments, said Kuhn. Watson’s tools can speedily read and understand legal invoices from outside counsel, thus helping departments reduce legal spending.

“We do have plans to serve law firms, Watson Legal does,” said Kuhn following a keynote address at the Legalweek conference in New York. “You can expect that, here and in the U.K., in the coming year.”

Mining Existing Data for Value

Though he declined to provide many specifics, Kuhn said the group has been talking about the possibility of building a series of AI tools to help to mine and decipher valuable, existing data that firms already possess, including pleadings, as well as emails, interrogatives, memos, and case research from previous client interactions. He called this data the “actual unstructured documents” created by the firm.

Key questions Kuhn said the group is discussing include how to repurpose firm data and mine it for insights.

“It’s not just the data; it’s the knowledge in the context of the legal services that were delivered to clients in the past,” he said. “How can you take what you do and operationalize it?”

Kuhn declined to name the firms involved in the discussions, or say how long they had been ongoing. He did say that the number is on the smaller side, closer to three firms than 20.

He said “it’s incredibly cool” that the firms have come together, despite the usual competitive pressures, to help devise novel AI solutions.

“It also aligns with a huge trend in digital and in AI, which is ecosystems,” he said. “These days, with fragmented value chains, with new business models, it makes sense for businesses to come together and form partnerships to leverage each others’ economies of scale.”

Cut Out of the Loop

Kuhn’s confirmation of discussions with major law firms comes as firms have been attempting to speed their adoption of AI tools to satisfy increasingly restless clients, who are demanding that their outside counsel develop legal business solutions that are cheaper and faster, and provide better results.

And firms, historically slow tech adopters, are lagging behind their clients on that score, said Kuhn, who is an attorney himself.

“Law firms, regardless of artificial intelligence but just in general, should be afraid of certain of their workflows being disintermediated by their clients,” said Kuhn. “If their clients can, their clients will.”

Forty-eight percent of corporate legal spend is in-house, Kuhn said during his keynote address—and that percentage has been growing by one to two percent in each of the last several years.

“Not to put too fine a point on it, but you need to change,” he told the audience, which was largely made up of law firm attorneys and executives. “Otherwise, you have a lot to fear.”