AI for services: impact of Covid-19
Following our last blog post, we will be expanding on Innovate UK and KTN’s AI for services report, focusing on the impact of Covid on the LegalTech industry. The report’s key finding was that companies that had already adopted AI technologies have outperformed their peers during this period.
Covid has meant startups, SMEs, entrepreneurs, law firms, practitioners, Courts and related activities have had to rearrange both their structures and manner of working to deal with day to day tasks. Efficiency and productivity have been critical challenges.
When it comes to the macro analysis of the pandemic’s consequences, the AI for Services Report predicts a gradual fall of the investment in AI and data technologies, despite the slow but steady involvement of technology within the sector. The pressures created by the lockdowns are set to lead to significantly reduced startup activity and innovation, and are expected to significantly impact the availability and liquidity of funds for the development and adoption of AI and data technologies by service sector firms.
Despite this, IDC is predicting a V-shaped recovery in AI spending (Vernon et al., 2020). This is sustained by the fact that organizations and companies that have been adopting AI over the previous years (and even during the pandemic), have performed and coped with the current situation better than their peers.
An illustrative example of this is the Italian law firm Portolano Cavallo. The firm found its clients needed to quickly determine if any of their contracts had force majeure clauses and exactly how they could be triggered. Using AI, Portolano was able to complete this task in record time—in fact, Portolano states that it was able to complete a document review that might have taken many days in just 45 minutes.
Similarly, the UK branch of the global firm Dentons managed in record time to analyze vast troves of documents by taking advantage of Luminance, trying to find those clauses that might be key to risks triggered by the pandemic. The task would have otherwise been difficult to achieve under client’s demanding standards.
Additionally, the current COVID-19 crisis has deepened and accelerated the pace of digitisation. COVID-19 has brutally forced all companies to operate on a mostly remote basis. Virtually all companies are actively embracing digital technologies to enable remote working and operational resilience. Side benefits have included an improvement in cost control, management of risk and efficiency in the context of shrinking margins.
As a result, there is an increased engagement and interest in technology. According to the AI for Services Report, increased and wider usage of cloud and data technologies could lay the foundations for future AI adoption. A sign of this can be derived from a London law firm’s study carried out by CBRE that revealed 48% are already using AI and a further 41% will start to do so in the near future.
In our experience at Sibyl, new norms have evolved around legal processes over the past months, several that are here to stay. Businesses that could support remote working in March have won customers from those slower to make the switch. Paper has been outlawed. Legal services are now a digital first endeavour.
The opportunity now lies in going one step further: generating greater value from those raw digital inputs to enhance the speed and capability of legal services. These circumstances open a new and huge opportunity for AI startups and developers in the service sector.