E26 Transcript

Digitalising the Legal Industry - With Dominic Woolrych

E26 Transcript


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Transcript Commences

Chris Patterson 11:11
Today on the podcast, I have with me, and I'm privileged to be joined by Dominic "Dom" Woolrych. He is the founder of the online platform LawPath, and he's an expert in technological innovation in the legal industry and profession. Dom's mission is to transform and digitize the legal industry to make it accessible to all small businesses and to show lawyers that there are many non-traditional opportunities in the legal sector. Dom is on the advisory board and serves as an adjunct professor at the University of Technology Sydney. He is a director of the Australian Legal Technology Association, and in 2022, last year, he was a finalist at the Small Business Week's Young Hero Awards and was voted as one of the top 20 University of Technology alumni. Hello, Dom. Welcome. How are you today?

Dom Woolrych 12:41
Hi, Chris. I'm very well. Thank you so much for having me on the podcast and thank you for the nice welcome intro.

Chris Patterson 12:48
Oh, no, look, it's fantastic to have you on board. Technology, law tech—I tell you what, the only thing that doesn't change is change itself. And we are going through this year one of the most fundamental changes in law technology with the introduction of the likes of and I just use, just use one or AI development, Chat GPT. Oh my god, what a game-changer that is for lawyers and what great opportunities that arise. So I'm super excited about tapping into getting some of your insight into the current state of law tech, not only in New Zealand, Australia, but it's really international. And maybe even just getting your views on where technology is heading. So that as lawyers, you know, we can start adjusting to this new world that we're in. Because it's an exciting new world. No one should be scared about it, and also be excited about what the future holds. I mean, let's start talking about it now. When did you start getting an interest in legal tech?

Dom Woolrych 14:00
So I call myself a recovering lawyer. I started my career as a practicing lawyer. And I think I'll just say one thing, I think it's very hard to have a conversation these days without mentioning AI very quickly, whenever I'm speaking to lawyers or technologists or anything like that. So you're completely right. It's kind of turning things on its head a little bit, and we can definitely dig into that. But yeah, a very quick background on myself. I'm from Australia; I studied law and business at Bond University in Australia.

Chris Patterson 14:35
From a big continent for border breeds.

Dom Woolrych 14:39
Border breeds, people.

Chris Patterson 14:42
Were weeded out a law degree, University of New South Wales?

Dom Woolrych 14:46
St UTS—University of Technology Sydney. Yeah. So as you mentioned in your intro, I've been lucky enough now to go back, and I'm a professor there of legal technology. So it's gone full circle.

Chris Patterson 15:01
They took you back.

Dom Woolrych 15:02
They took me back, did to be honest, going through my degree. I never really thought I'd end up teaching there. But um, but it's funny how things kind of change. I went on like a very traditional legal path at the beginning, went to law school and then took a clerkship at one of the big commercial firms here in Australia, Minter Ellison, started my career there. The M&A teams really, really enjoyed the work. Loved what I was doing, kind of saw myself being a career lawyer.

Chris Patterson 15:31
Did you enjoy the hours?

Dom Woolrych 15:33
Yeah, you know what? I think when you're early and energetic in your career, it's kind of a bit of a badge of honor. You know, that first time you stay past midnight or that first time you do an all-nighter? I mean, I think things have changed a bit now. But I think whilst I was studying and when I started practicing, I very quickly began to realize that the legal industry is huge, you know, trillion-dollar-a-year industry globally.

Chris Patterson 16:06
It's getting bigger. It's not contracting, it's getting larger.

Dom Woolrych 16:10
It's getting larger, and I think, you know, a lot of the technology advancements at the moment, there's a lot of fear-mongering, you know, when you read the certain industry rags saying, you know, GPT is coming for our jobs or AI is coming for our jobs, and I don't think it could be further from the truth. I mean, I think what it's going to do is going to change the way lawyers work, but it's definitely going to increase work for lawyers.

Chris Patterson 16:35
I mean, I thoroughly agree. I think that the way I look at it for what it's worth, I'm interested in your thoughts, is that AI isn't going to be replacing any lawyers in terms of their output. What it's going to be doing is it's going to augment their output. It's a tool to help produce better work product. It's not a tool to replace a lawyer from producing output. It's, yeah, I mean, you've really got to think about it as being a tool to work better and forget about Google and Bing and search engines. It's not a search engine. It's a tool. It's a virtue. It's kind of like a virtual assistant as a legal assistant, law clerk. How would you describe it?

Dom Woolrych 17:26
Yeah, it's someone or something that can sit there and assist you as you do your work.

Chris Patterson 17:37
Would you say like a collaborator, collaborator?

Dom Woolrych 17:41
Yeah, a lot of the large tech platforms are calling their systems co-pilots. And I kind of like that idea, right, like Microsoft calls it a co-pilot because that's what it really is. It's a co-pilot when you're doing your work. And we are seeing that internally in my company LawPath, with our lawyers using it a lot internally and becoming far more productive and increasing their output. And then I even saw a study the other day, that I think Accenture or KPMG had released saying that their consultants, when using some form of AI assistant, were about 10 or 11 times more productive. So I think, back to that original point, which is, it's not going to replace lawyers, if you're exactly right. It's just going to augment and change the way that they work. And that's exciting. And I think if you look at other technology advances previously, every time something came in, whether it was, you know, even the beginning of email, right, like I'm probably a little bit too young for this, but I've heard stories about lawyers who were very skeptical about using email early on because they thought that it would take away from drafting and certain parts of their work. And then, you know, I don't know a lawyer today that doesn't spend half of their day in their email. So it's a very kind of crude example, but I think what it does, it's just going to superpower. It's a bit of a superpower for us as lawyers, so really, really exciting. But um, I do want to tell you why I got into legal tech because...

Chris Patterson 19:15
No, no, I'm intrigued, and for our listeners, you need to sort of give us a date range. So when I got your age when you were starting at Minter Ellison, what sort of years were you there? Yes, I am a solicitor.

Dom Woolrych 19:33
As a young solicitor, I spent four years at Minter Ellison. So my early 20s was spent there, and then...

Chris Patterson 19:40
So what do we, what are we? What are we talking dates?

Dom Woolrych 19:44
Date? So 2010.

Chris Patterson 19:47
Yeah, okay, so, all right. So by that stage, the fax machine had almost gone.

Dom Woolrych 19:51
Yeah, yeah, we're not talking about the '90s or '80s here. No, no, I, you know, I'm 36 years old. So I've been in the legal industry now for about 16 years. The first third was what I would call the traditional legal industry working for one of the large commercial firms. And then the last two-thirds of my career have been really in legal technology.

Chris Patterson 20:17
Okay, so I think you were saying that, you know, while you were working as a commercial solicitor in the M&A department at Minter Ellison, you had noticed that there was a certain way work was being done with the certain available technology, and I take it you had a bit of an epiphany. Do you want to share with us that epiphany?

Dom Woolrych 20:38
Yes, you're exactly right. I think a few things all lined up. The stars kind of aligned a little bit for me in terms of three things happened. Firstly, my dad was an entrepreneur, and he was constantly telling me that he couldn't afford lawyers. And he would always come to me and say, "Hey, Dom, can Minter's help me with this?" And I would say, "Look, that's going to be about $100,000 for that document." He'd say, "Look, it just doesn't work for me." And then starting to realize that about 85% of businesses couldn't afford a lawyer. And there was this big gap of what I call kind of under-advised businesses out there that were missing out on the legal industry, usually due to cost but sometimes due to access as well.

Chris Patterson 21:21
So real access to justice for that sort of business sector issue.

Dom Woolrych 21:26
Yeah, I think a lot of times we think about access to justice, and we think about pro bono and individual type services. And you know, what, when I started to look into the problem, I realized that there are some government programs, you know, here in Australia, we have legal aid, I'm sure you have something similar in New Zealand, how, yeah, absolutely. And you know, those programs aren't perfect, but they are set up to help people that can't afford legal help at that end of the industry. And then you look at the other end and you've got corporates and they can afford legal services, but I found that there was this kind of missing piece, which was there were a lot of small businesses out there that because they were running a business it was assumed that they could afford legal services.

Chris Patterson 22:14
This whole SME market, you know, small, medium enterprise, and yeah, I mean, I pick up your point it's, there's just an assumption, but, you know, there are businesses of course, who make less money than, you know, some employees will even salaries.

Dom Woolrych 22:30 Yeah, exactly. And I felt like there was a big opportunity there. And then the second thing that happened is I took a little bit of a page out of our colleagues in the accounting industry, and I looked at what was happening there back in the 2000s. And, you know, homegrown Xero was kind of coming through and totally changing the accounting industry. They were platforming, you know, they were changing the way that especially that bookkeepers worked, and I really felt there were a lot of parallels between accounting and legal. And I thought that the next kind of innovation would be platforming legal services and automating legal services. So lining those kind of few things up. I felt that was a big opportunity. And, and to be frank, I really felt like the legal industry had not grasped technology like other professional services industries, and was very resistant that and that was that the legal industry is quite successful. You know, the incentives are not really there to change too much. Because we are all doing as lawyers, you know, okay. I think that's probably definitely changed in the last 10 years. We're getting a lot of pressure from the client side now to change things and use software. But fundamentally, the business model still works.

Chris Patterson 23:53
And I guess, I guess, Dom, if we take a step back, providing, I guess, access to let's just call it legal product, there wouldn't otherwise be accessible because we're talking I think what you're really saying is you're saying here we've got a small medium business that just wouldn't purchase, but I'll just use employment contracts for an example. They just wouldn't purchase the employment contracts. Because they just they can't afford it. It's, you know, it's more important to keep the lights on in the office or on the factory floor than it is to buy these comprehensive employment contracts from a lawyer. Yeah. Yeah. But the issue is, is that by not having the contracts as a kind of classic but for is that there's a real risk and that risk sometimes crystallizes that not having the contract makes if a dispute arises, more complicated and more costly to resolve. So you've got this kind of catch 22 going on, and in certainly an area of practice, practice enhancement. It's my area of expertise and interest is dispute resolution and kind of save yourself. Why didn't you just spend a few dollars on getting a decent contract that would have avoided this dispute possibly, or if it didn't avoid this dispute would have made the resolution of the dispute far quicker and less expensive? And, of course, disputes are a zero-sum game for businesses. They are, you know, they're just spending money. It's going off the bottom line. And it's also a massive distraction. You get the business owner, the management team tied up in resolving a dispute, rather than providing goods and services to their customers. Yeah, yeah.

Dom Woolrych 25:54
Chris, you are preaching to the converted here. I think the difficult thing is that really, when small business owners, we know as lawyers right that the impact, what can go wrong, and we would obviously, we like to starting our own small business, having seen what can happen would make sure we pull in protection at the beginning, but actually cost.

Chris Patterson 26:12
But we're a little bit more cynical because an even deal goes wrong. And that's why people that's why people ring us they go are just ringing you because the deal has gone wrong. I need your help. No one ever rings and says, "Hey, Dom, I just want to let you know, that deal went so smoothly. Everything's gone fine for the last three years and we've had no problems." It's a bit like you were mentioning to me before we started the podcast that you had to go to the dentist. I mean, have you ever run your dentist up and said, "Hey, I just want to let you know. Everything's good as far as my teeth go." You don't. So you think everything goes wrong, you just become cynical. Or maybe I'm cynical.

Dom Woolrych 26:51
No, no, I think we're all the same there. You know, I really do. I think a lot about this idea that legal is typically reactive. And yeah, we're a big passion of mine is to try and change legal to be proactive. And I think the step there is how do we actually provide legal help at scale to bring the cost down? Because that is really why it's reactive, right? Your clients aren't calling you when the deal goes right because, you know, they, they know that look, if I'm going to call Chris, he's going to provide services to me. There's likely maybe some costs involved there. I don't really need to tell him what went right. But it goes wrong. They do need it. So, you know, I think this idea of can we swap legal, the delivery of legal to be proactive, is really important. So, you know, the employment agreement example is the perfect example, right? Like, we know that if it goes wrong, you should have just put in place that very simple employment agreement and then legals reactive because we have to try and fix it. Whereas if it was, it was, you know, in my view provided through a platform on demand at a reasonable cost, the barrier for the business to be proactive about their legal protection is so low that they might actually do it. You know, what might even happen is the business doesn't even have to think about it. Like, let's say, run through an example where we're setting up an employee, we're setting them up through zero or through QuickBooks or through one of the accounting platforms to get their payroll sorted. Why can't the software just provision an employment agreement for them right there and put it in place, automatically send it for a signature and store it. So, you know, you're taking it from a step of being proactive to just being completely automated. Now, I know one of the pushbacks when I speak to lawyers is we'll look, you know, an automated employment agreement. How do we know it's got the right clauses? How do we know it's correct, how do we know the award rates right?

Chris Patterson 28:47
But the answer to that is you read it. But this is this whole thing about augmenting what lawyers do not thinking that this is somehow a replacement. This is just a matter of being more efficient and generating the baseline documentation and then customizing it as suits. So I don't think anyone should be thinking, hey, let's just set up a system where everything's just automated and it's all fine. Well, it's not because humans are often unique and have their own particular nuances and things that they need. And, you know, I guess, Dom, you know, to the other extent, too, it is not just that aspect. I mean, there's got to be a productivity saving and so that lawyers can actually redirect the capacity to better value-add scenarios. Is that what you see as one of the goals or objectives of legal tech?

Dom Woolrych 29:53
Yeah, I think there's two concepts there that are really important. So the first one is this kind of concept called unbundling of legal services, which is that in a in a in a task to be done, or jobs to be done, there's a workflow that we go through let's use the employment agreement again, as a basic example. The lawyer doesn't need to be involved in the entire process, you know, part of the process, the process can be broken up and it can be, you know, you could have non lawyers, you could have technology. And what I really want to see is that we just inject the lawyer at the opportune time when their skill set is needed. So I think there's that idea and then that needs to concurrently run with this idea that we need to move away from time-based billing to value-based billing. So I totally agree. Yes, indeed, there is. Let's draft an employment agreement two hours of my time, 1000 bucks. That's how I bill, where it's actually the employment for the business, the employment agreement, to value, we don't, they don't care how long it takes to draft, they just want, they just need it. So I think if we swapped to a value-based billing system, which a lot of firms are doing that now. And then we say okay, at what point do we just inject a lawyer, software, maybe an automation can maybe do 90% of it, the lawyer come in and check it now? I think, I think then the lawyers are kind of getting involved at the point where no one else can do what we do, which is, as I said, there's going to be a unique circumstance there that software might not have been able to pick up. We can jump in there, but But you know, 80% of the cause is in the employment agreement, let's be let's be frank, I'm not going to change and kind of...

Chris Patterson 31:35
You're right. I mean, this is some boilerplate and mandatory requirements, you know, statutory requirements that have to be in there. And look, if you look at any employment agreements, you see the say the common denominators sitting in there, right? Absolutely. Not done. Something I've noticed is, I guess that's lawyers. I mean, I'm not criticizing them. I think they should be embraced, you know, trying to come up with their own, I guess, automated template solutions for for clients, and I can think of a law firm I've been dealing with recently firmus solicitors that specialize in relationship property and, you know, family trust type work in they have a, you know, when a couple of separates, they've got a little page we bring in, you know, all your details, your name, your partner's name, you know, how much you're all earning. Do you have a house and, you know, what's it worth and what's your rental properties and you fill that all and then they populate that information automatically into a draft Separation Agreement. I'm just using that as an example. But there's a real fragmentation because this isn't a one-off example of of law firms who are trying to embrace the technology and good on them. I think it's fantastic. But you know, do you think that's an efficient way of approaching it? And I can see why each law firm would want to have its own IP and have its own offering, but, you know, it's a little bit like, you know, every accounting firm trying to create its own form of zero to a degree, or, you know, QuickBooks or something.

Dom Woolrych 33:24
Yeah, yeah. What's your thoughts? Yeah, I think that's such an interesting point. And I've learned a lot growing a technology company over the 10 over the last 10 years and some of that we've I reflect on a few of the biggest mistakes we ever made. It was trying to build our own custom systems. Before we knew exactly the product market fit of what we needed for clients. So to dig into that a little bit more. You know, when I came out, I hired a bunch of developers, you know, we have a team of 25 developers and I said, legal is unique. We need to build unique software. So we went about building this unique software contract management systems, workflow systems. And what we found was that we weren't experts in building contract management systems or workflow systems. We were experts in them in the in the legal aspect and so what I've changed now and how we build software, this company is we actually look generally across all industries and try and find the software that will be the closest fit, and then we like to adapt it because I think that a big key a big part of legal technology is actually finding IP outside of the industry and bringing it in. So for workflow software, you know, there's software developers out there, or software businesses that have built software development workflows for writing code, that it actually only takes a couple of tweaks to then change it to writing legal contracts. So I suppose the point I'm trying to make here is you're exactly right. I don't think firms should go out and build their own custom software. I really think that they should find third-party or white-label software that fits their needs, and then bring it in and alter it. One because the speed that software moves, you're never going to be able to keep up with it. But to and this is something I don't think a lot of people think about is the maintenance to keep these systems going is extremely expensive. And you know, let you know, if you're a law firm your core competencies providing legal services, not maintaining a software system that's doing your contract drafting for you. So I think we will see a lot of consolidation. I mean, there's a lot of contract management or Salems out there at the moment. 2021 was kind of a booming year for contract management. And ediscovery was a few years before and then it was contract management. So you've got a lot of companies out there a lot of companies that have actually raised a lot of venture and private equity money to grow and...

Chris Patterson 36:11
Particularly some of the some of the American and European companies literally spent hundreds of millions of dollars on getting this getting the like their ediscovery platforms, you know, right. And yeah, some might say that they're far from right, but you know, certainly, you know, it's a big industry.

Dom Woolrych 36:30
And I think they'll start to consolidate soon as well. I mean, we've started to see the big, the big players, the Thomson Reuters. LexisNexis start to buy up and consolidate, especially in ediscovery. And so I think what will happen is they'll just get more powerful and if you've built your own custom system, my personal opinion is that you'll struggle to keep up. It might be perfectly on in the first six months because you've built it specifically for you, but it will get harder and harder to maintain. So I'm a real fan of, of what kind of white-labeling or third-party software until it gets to a point where you just can't find anything in the world that's already been pre-built for you and have to build custom.

Chris Patterson 37:14
I guess lawyers inherently particularly trained to be designing software. Certainly not coding it. I'm in love. There's always exceptions. I mean, I've got a colleague and a friend of mine. I don't know whether he would say it's been a blessing or a curse, but he developed a great piece of Well, I think it's a great piece of software from what people have told me. seen it in action a couple of times called a key trick and it was designed so that people who have bought a house can follow the steps that are necessary from you know, bidding successfully bidding at the auction or signing on the dotted line to actually literally being given the keys to the house. And you know, it's just one of those classic things a lawyer sort of saw a potential need and developed a solution, I think for him at a lot of great expense, some stress. But yeah, I mean, it's great when you see I mean, I'm always keen on seeing innovation and promoting it so don't don't sound like a critic, but I agree with you. I think that it's the it's the actual software industry who probably best placed to develop applications that are going to work and can be leveraged.

Dom Woolrych 38:31
Exactly. Right. So yeah, I call the call finding a lawyer. That can be a great lawyer and code a unicorn, because there's not too many out there. And I you mentioned in your intro, so I do a lot of teaching at university and one of the questions I always get is, hey, I want to move into legal technology. Should I learn this is from law students, should I learn to code and my opinion is actually no. Because what I really think is that to your point, again, you know, there are there are expert lawyers, and there are expert developers, and I don't think you're ever going to find an expert coder and an expert lawyer. And so let's leave the software development to the coders and the lawyer into the lawyers. And if you want to work together, you just have to learn how to talk to each other. But you don't have to learn the core competencies of each one...

Chris Patterson 39:21
Let me share a little personal story. So in 1991, my my first year and I target university doing first year law, I was doing a commerce degree concurrently. And one of the commons papers I did was on information technology. It had two parts to it. One part was that the sort of the info tech we were using Microsoft Word Perfect I don't know if you Hey, yeah, probably a little better. But yeah, you know before Windows, this was all on an MS DOS type system. So you sort of had that the applications I can't remember what the spreadsheet application was called. But, but but WordPerfect was the processor. But the other paper that I had to do was computer science paper where for a year I was taught how to code and Pascal which I don't think anyone's used for about 30. Look, it was very fortunate for me that I happened to strike at that last year where they combined the two papers to give you one grade. And for some reason I managed to at the end of the year get a B for Information Technology, which told me that I must have got an A plus in the Infotech paper because there's no way I could have possibly passed the computer science paper because I literally turned up to the exam it was at multi-choice questions with various coding questions and I think the first toe I was like, Oh yeah, I reckon I might know the answer from that point onwards. It was pure guesswork. But look. Yeah, anyway, Pascal like learning learning lesson really, you know a language that no one actually speaks. But you know, there I guess there's some benefits in it.

Dom Woolrych 41:02
Yeah. That's when you knew that you were going to become a lawyer at

Chris Patterson 41:06
that stage. I knew I was not going to be coding software.

Dom Woolrych 41:11
That's great. I think. I think that kind of the advice I often give to law students or anyone really looking to get into legal tech is no, you don't need to learn how to code. But there is a basic level of kind of software literacy that you need. And often that comes in actually doing some skilling up or doing some education becoming a product manager. So we have in our software business, we have the kind of the core technology team. We have the lawyers, and then we have product managers, and they're kind of the translators. They're the ones that talk to each other. Some of them have leading law degrees as well. And they're the ones that kind of go back and forth and say this is legally how it needs to work. Okay software developer build it this way or, or go to the lawyers and say, technically, we can't do that. We need to do it another way. So I think that's, that's really important to have those those people between.

Chris Patterson 42:06
Yeah, look, I agree now, am I crystal ball gazing a little bit here because we were mentioning the the legal publishers who who provide, you know, search functionality for research. You know, if you're a litigation lawyer, is probably a rare day if you're not sitting down and running a Thomson Reuters Westlaw search or a LexisNexis search or having someone search for you. But of course, this is search engine technology, which which we can probably fairly say, as as old technology now, and that the future is going to be more AI driven. And do you think these large publishers I mean, surely they must be going, right? We've got to create our own AI algorithms as such. We have effective algorithms the wrong thing to say because that's not the right thing for artificial intelligence. But they've got to create their own AI offerings, which means, you know, there'll be a change in how legal research is done won't be done on a search engine basis. It's going to move towards more of a, an artificial intelligence basis, is it? I don't want to be one of those, like, call them you know, these futurists it, or am I way off the market? What do you say,

Dom Woolrych 43:24
Oh, you can call yourself a futurist because you're back on point. So it's already happening. So yesterday, I just sat through a demo of LexisNexis plus, which is their new AI-powered search tools that they're launching. I think it's live in America and almost live in Australia. So you're and I think the really interesting thing too, we're going to see over the next couple of years is all these big players are making the call whether to build or buy. So Lexus chose to build they built it internally. Thomson Reuters they bought case text about two months ago case text he was he's one of the leading AI businesses over in the US. And so they've gone the other route. They've, they've said, Look, we can buy and integrate in so yeah, you know, I mean, your prediction is 100% Correct. What we're seeing is, actually, funnily enough, we just launched this very morning this morning, our AI-driven search on the lawpath platform. So it will actually go into the documents and read them pull out, not just the text and kind of show it to you in highlighting but actually pull out what he thinks the answer is. So yeah, there's gonna be some huge developments over the next kind of two or three years. But I think what super sorry, sorry. No, no. I think what's really important is what we're seeing is most of these providers are not building their own LLM their own large language models. They're saying, as we spoke about before, let's leave that to the pros. Let's leave that open AI or Amazon or Google. And what we will do is just piling in a layer on top that uses the power of the LLM, but also uses our data and then combined some to give you the output. So yeah, that's that's. So I suppose I'll also join you in saying that that's what I think will happen over the next couple of years.

Chris Patterson 45:43
It looks, going back to the issue of, I guess, you know, access to justice or access to legal information, Orzly and NZ Law being public, you know, database platforms for law. One thing I've noticed is lay litigants are now turning up to court, and some of them are turning up with some, I'd say not too bad legal submissions that they've been able to pull together by using the likes of Orzly and NZ Law. And of course, if those platforms move to a more AI-driven basis, it will make it more accessible to anyone with internet access and a better knowledge, not of the law per se, but probably more around how to frame prompting, you know, artificial AI prompting will be able to generate output. That's probably going to be reasonably good on a first pass and with a bit of fine-tuning, could get actually really quite good. I mean, do you think that's where things could go?

Dom Woolrych 46:57
Yeah, very much so. I mean, I saw that honestly, it's already been uploaded to one of the LLMs. So if you're on chat, GPT, it's likely that it's probably using some data from there. So I definitely think that, you know, I think the role of the lawyer, obviously, there's the research side of things, but then the role of lawyers then kind of crafting it and presenting it. So the research side of things is probably now what AI can do for everyone. It's not just the skill set is probably beginning going to become less important. Where the lawyer fits is they still need to translate that into a legal argument or submission or something there. So I think what's the phrase, I'm kind of like, you know, the toothpaste is out of that, that the toothpaste is out, you know, in the terms of like, the data is already in the LLMs so people can access it. And as the prompting, as you exactly said, as the prompting gets more sophisticated, people are going to get better and better output, and we will get to a point where people can turn up to court with very good submissions. I think prompting is there's that old saying, you know, like garbage in, garbage out. That is so true with AI. If you're prompting incorrectly or you're putting the wrong or you're doing it incorrectly, you're not going to get the response you need. But there are now we have two prompt engineers that work at LawPath. There are careers now that are just mainly around being able to correctly create prompts, and the better you are, the better output you get.

Chris Patterson 48:42
Well, here's a suggestion for anyone involved in continuing legal education, you know, whether that's Law Society or Law Association or, you know, whatever. Run a course on AI prompting, because it's, it's not like a search engine where you're typing and say, you know, negligent misstatement cases after 1986, but before, you know, we never exclude excluding case ABC. Prompting is an art form, and it's something that you can be trained on to understand, you know, both the limitations and the capability of AI. And then what to do once you get the output because it's not just a, you know, that's what the whole chat aspect of it is, is, is you're literally chatting with the AI to reach an endpoint and that chat, which is the output that you're ultimately looking for. I mean, I don't know about your experience with AI, but I very rarely ever run without, you know, or take output on a first pass. It's usually I'll look at the first output and then redefine the prompting or narrow or widen things out so that I get what I'm hoping I'll land out. I mean, do you think there's a training opportunity there?

Dom Woolrych 50:12
Yeah, I definitely do. I think I'll also make a prediction. I think one of the big changes we will see is that these companies like the big guys like LexisNexis and Thomson Reuters that have the platforms and the channels, part of the work they will do is actually helping with the prompting. So what we're seeing a lot of now with a lot of the AI is that not only will you chat to the system or provide inputs, it will also automatically bring in inputs from other places that you don't need to give it, but it will help the output. So what I mean by that is, let's say I'm looking for an employment agreement. Let's use the employment agreement. That's been a good example all the way through the chat. So when I make that search, and I say, "It'll draft me an employment agreement," it will find me an employment agreement. Not only will it take that instruction, but it will look at all the past data that I've given the system, and it will say, "You know what? I know that Dom is based in Sydney. I know that Dom hires these types of professions. I know that he's paid these award rates in the past." And so the output won't just be a generic employment agreement. It'll be customized employment agreement for this specific purpose. So I think the point I'm trying to make here is that I think prompting is really important now, and will always be important, but I think that the role of the software companies will be actually to kind of almost provide assisted prompting, where behind the scenes, prompting is going on that we don't know about, but it's helping us with whatever we're doing.

Chris Patterson 52:03
Well, exactly. And this is one of the powers of AI, being able to say, "Okay, well, look, you've produced this output, and you can literally ask it and say, 'Do you think I've missed anything?' And it'll say, 'Well, Chris, as it so happens, I think you failed to take into account, you know, the annual leave of this employee should be increased by this amount of money, and that should be in the contract.' Yes, using the employment contract."

Dom Woolrych 52:33
I used the system the other day that I was blown away with. I uploaded a contract, and it ran a quick review of the contract and spat out all the missing clauses, and it said, "I've reviewed 50 other contracts like this, and here are the clauses that I would recommend you put in here, the clauses that are drafted incorrectly." And it was a little traffic light system. It just said right next to the clauses that were good in green, and the ones that weren't. I thought that I got a little bit scared, to be honest. Because I mean, I think that's one of the roles that a lot of lawyers do, is they'll review a contract and they'll go back to the client and say, "Hey, look, this is what I think," and this AI system did it very quickly, and I was really impressed with it.

Chris Patterson 53:16
Yeah. Now let's look at some exciting times. It's, you know, we're right on the cusp of, you know, it's a fundamental shift in the way in which law will be done and delivered. Yeah. Look, you know, we've talked about electronic discovery for a moment. I know it's, you know, that's not your key area, but you've got experience in it. I've certainly noticed over the years a significant improvement in electronic discovery, but it is becoming more and more important because we're just generating far more documents and in particularly large commercial disputes. You know, once upon a time we thought 10,000 documents was was a large discovery, and now we're getting into the tens of millions. It just can't be done without technology now. I mean, what's what's your thoughts on the current state of play of ediscovery platforms and possibly the future?

Dom Woolrych 54:23
Well, I think I will caveat anything I'm about to say with, "Yes, Chris, it's not my area of specialty" but I did. You know, being involved in the legal Australian legal tech Association, a lot of the association members are e-discovery businesses. And I think that was probably the first area that when we're thinking about this latest wave of technology coming into the industry that e-discovery was kind of the lowest hanging fruit and where there was a, like a burning need for technology. So there's a lot of e-discovery platforms out there that are now kind of 10-15 years old, and I think, you know, these recent developments. You know, I think one point around AI, just going back to that quickly, is that, you know, AI is not brand new, right? It's actually been around for a long time. It's just that in the last year, access to AI has just exploded because now anyone with very basic coding can plug into an API. So I think the AI platforms or sorry, the e-discovery platforms have been using AI for a while.

Chris Patterson 55:33
Identify some listeners, get you to describe what an API is, you know, the linking tool that Oh does.

Dom Woolrych 55:40
Yeah. I've gone blank on the acronym, application process interface or something.

Chris Patterson 55:51
As an interface, yes, links and links pieces of software together.

Dom Woolrych 55:55
Exactly. So when you are using two pieces of software and you want to pass data between the two of them. That is how you do it through an API. It's any, you know, any piece of software that we use these days, it's likely got APIs going out to other systems to talk to it, but more importantly, within a piece of software, you might have the login, the login portion of the software, and then it speaks to an API to the actual platform that you see. And then it speaks to the API that runs, you know, the billing, so everything's kind of connected through APIs. And now, any piece of software, they will typically actually have an open, what they call an open API, which means anyone can connect in because these days what's really, really useful is I'm sure a lot of the listeners use legal software that has kind of marketplaces where they can connect other pieces of software that they want to, to having an API open API is really important.

Dom Woolrych 57:21
So, sorry, back to your question about e-discovery. So, as you mentioned, it was comfortable, as I mentioned, it was a low-hanging fruit you need technology as the cake gets bigger as more documents are required. I mean, I'm not sure, Chris, probably out of it a little bit, but I know here in Australia, like some certain courts or certain judges will actually mandate the use of e-discovery software. Is that, yeah, it's across the board and I mean, just whenever it comes to large-scale litigation, you know, the parties have to, you know, are required to work through how the discovery process will be completed. And the parameters around that, and the judges are only brought in if there's a disagreement. But the underlying principles are both in New Zealand and Australia, it's around proportionality, etc. But, you know, to avoid discovery being used, you know, for oppressive purposes, you know, because otherwise, you're not getting to the real issues and the dispute won't be resolved efficiently. I have a question for you. I know in the US, there's a number of platforms now that will actually kind of predict the outcome of the matter before you go down it. Have you ever used any software like that?

Chris Patterson 58:28
No, I haven't. I've read the reviews of them. And the reviews are somewhat mixed. And then you do have these experts out there saying, well, you know, this was the future, particularly for small claims. Both parties will effectively put on the effectual matrix as such, and you know, the software will determine who wins and who loses. And, look, you know, maybe there is something for the future. Not quite sure that it meets the requirements of all parties that they feel like they've been heard and had their day in front of a human. If a computer's just churning out an outcome.

Dom Woolrych 58:54
Yeah. But I think that is fundamentally across all the delivery of legal that is the point there. Why we know that software won't take our jobs, right? Because at any point in any legal matter, whether it be a dispute or other, there is a point where you need a human to explain something to another human and software can't do that. So we can do all the grunt work under the hood. It can do the drafting and can do the review. But there is still a point where you need the translation to be done, especially when it's a lawyer to a layperson that probably doesn't understand things. So I think across the board, that is what we're finding. I mean, we draft hundreds of automated contracts that day, but there's, you know, we still have the lawyers in our business or externally that do the explanation and work with the client and do the personal, the personal touch.

Chris Patterson 1:00:21
Look, that's that's an interesting point. It is kind of a nice segue into sort of the next topic or to to get your input on, and that is the concept of remote court hearings. You know, pre-pandemic, almost unheard of. I mean, occasionally you might get a witness for practical reasons, might give evidence remotely but you wouldn't run a hearing remotely, or even case management might be done over the telephone, but but you don't have the element of of the visual and AVL, etc. But you know, have you, you know, are you seeing that, that the more tech industry is is attempting to respond to the increased use now, and I think it's a real positive of using remote hearings when it's appropriate to have a remote hearing.

Dom Woolrych 1:01:01
Yeah, I think that, I mean, even before COVID, I before I joined Minter Ellison, I did a stint in the in the court as a junior criminal solicitor and and obviously we would have dialogues and videos in from detention centers and things so it wasn't it wasn't unheard of. But now that people have become comfortable, the industry has been comfortable, the courts have become comfortable. I mean, it can only be a benefit, right? I do think that just the idea now that location doesn't matter means things can move faster, which must have a better outcome. Now I get it that, you know, maybe there are some, some intricacies of not being in person and you know that there might be some downfalls there, but as a kind of greater good. Having things online makes a lot of sense. I think one of the big, big changes I saw during COVID was remote witnessing and remote electronic signatures. I mean electronic signature, I think, if you if you couldn't get any shares in zoom, the next one you would have bought is probably DocuSign. DocuSign, that went crazy, especially remote witnessing, and I thought it was really good that the states and the government actually put in COVID legislation to allow for remote witnessing. I'm not sure if they did something similar in New Zealand, but here in Australia, they did and it looks like that legislation will actually be extended because we were having clients coming out to us, to us creating wills through our system, through video calls with lawyers, but then not being able to sign them and sitting in their house and they couldn't sign them. And so there were some kind of basic fundamental things that had to happen. And so now you can witness through video. So little things like that. I think we probably knew back in 2018 that that was eventually how things were going to end up, but COVID just kind of accelerated it.

Chris Patterson 1:04:27
Accelerated it and sort of made it happen. Yeah, I mean, I was involved last year in an Australian federal court hearing that was a six-week hearing that took place based in Melbourne. The only person in the courtroom was the judge. Everything was remotely done. All the lawyers appeared remotely. And in fact, one of the senior counsel was based in Sydney for one of the parties, and most of the other lawyers were based in Melbourne, but there was a law tech business from Brisbane that was engaged and took responsibility for putting up online on the screen all the documents. So a lawyer or the judge would ask for a particular document, and this business that had created this platform for electronic bundles, called DocuTronic, would just put it up on the screen. But it did require running two platforms. So the default platform for the audiovisual was Microsoft Teams. But the document platform was BlueJeans, so you had to run two platforms to fully participate in the hearing. But the other thing, the other thing that I thought was quite a good advancement with it was the hearing was actually open to the public. So you could, via the federal court's website, gain access to the hearing. The other thing that I noticed was that, and it's because I don't spend a lot of time on the federal court's Australia website, is just the access to documentation. That's for all the cases that have been through. I don't think there are really many other courts that have that much available documentation that you can just download off the internet or view on the internet. It's really quite an advancement. But, you know, certainly, this is an area that I think that we're going to see more innovation to provide a better experience for participants or even the public with open access to justice so that people who are interested in hearings, I mean, it doesn't need to be the Donald Trump prosecution in Washington or the Supreme Court scenario. We had something like 55,000 people connected into that hearing. But just to be able to watch cases, and I mean, for lawyers, the area that I think is super exciting is particularly for litigators. I'm a litigator, is being able to watch very experienced counsel at their art, whether it's cross-examination or openings, which otherwise would require you to walk up the hill or down the road to the courthouse and hope that you're turning up at the right time when you know that part of the hearing is going to take place. Whereas now, you can have it running in your chambers or your office and be doing something else and then go, 'Alright, this is the exciting part. This is when senior counsel is going to say, 'But you are the one that did it, didn't you?'.'

Dom Woolrych 1:08:00
I think even pre the courts' online dispute resolution, there are some great companies that have popped up during COVID. As you mentioned, doing the systems work to make sure that the documents are all in the right spot, making sure that the video calls are good, making sure that the negotiations can be done online confidentially and correctly. So it's a really good space and I'm COVID was obviously a horrible thing. But I think in terms of legal technology, it did actually push the industry forward.

Chris Patterson 1:08:35
Yeah. Now, also, with all these advantages, there are also risks. And, you know, one of the risks is confidentiality. Okay, so if we've got all these lawyers who are now able to work remotely, whether that's at home or on the beach or wherever outside the office, the security issue and the risk of data breaches must increase, right? Yeah, most definitely. I think that is always a layer that lawyers need to think about, especially when they're purchasing software that other industries maybe don't need to think about as much, which is the privacy and the confidentiality issues. So I know a big burning question at the moment around the use of all these AI systems is where does the data go? Where's the data being stored? Where's the AI actually doing the computing power, the compute to generate the output? So, you know, very, most law firms have a policy at the moment that says you cannot put in information, specifically confidential information or personal information, to GPT. So don't put in the prompt, 'By Clyde Jade Smith, has been charged with extra feats.' Don't do that because that data is going straight over to California where it will be analyzed and then sent back to you. So that will most likely be breaching your obligations. That is why we've probably seen some releases recently. OpenAI released GPT Enterprise, where they actually said that the data still leaves, it still goes outside of your system, but they delete the data, and there are additional confidentiality measures. I think Amazon has just released on AWS (Amazon Web Services) their new LLM called Bedrock, which actually puts an instance onto your own systems. It never leaves your system. So I think there are some solutions out there, but lawyers should be careful when they're specifically looking into AI and always double-check the confidentiality and privacy. I think, Chris, to your point around documents leaving the office or my gut feeling is that we dealt with a lot of those issues when law firms started to use cloud software 10 or so years ago. I mean, I don't think there are many law firms left that are using on-prem servers. I think everyone's now got pretty comfortable that they're using Microsoft 365 or something like that. And everyone knows when we use Microsoft 365, our emails are stored in Microsoft's database, which is usually in Australia, but the information is moving around. But I think there are some additional, everyone got very excited with AI, and I think maybe some people kind of jumped the gun a little bit in using it with information where they weren't better down where it was going.

Chris Patterson 1:11:43
Yeah, and look, whilst I don't really hear this often, I certainly think about it myself because I do regard myself as a bit of a digital nomad when it comes to working. As the fear of losing, you know, a valuable device, when I say valuable device, a device that's got information on it of value, a laptop, mobile phone, etc. So, you know, I've had to think about what security mechanisms I have in place so that if that happens, I'm reasonably confident that that's not going to cause a threat or loss to someone else. And yeah, it's something I think about. I mean, is this something that law techs have thought about and want to provide solutions for across the board?

Dom Woolrych 1:12:38
Yeah, I think that law tech, we default to the software providers, really. For example, basic security around 2FA. You know, making sure that you have 2FA on all of your software. Some listeners won't know what 2FA is. Yeah, sorry, two-factor authentication.

Dom Woolrych 1:12:56
Authentication. So when you log into the software, you get a text message with a code, or you have the authenticator app on your phone.

Chris Patterson 1:13:07
Hopefully, you don't lose your phone. Yeah, hopefully.

Dom Woolrych 1:13:10
That's right. But I think, you know, we all know now when we log into our banking, there's always some kind of two-factor authentication protection there. I know that was, you know, the accounting software Zero has made it mandatory on their system. I know Salesforce recently did it, Google has too. So any software that you're using, you definitely should be using two-factor authentication. And to your question, I think the security side of things, us as lawyers, we outsource that to the security software platforms.

Chris Patterson 1:13:41
Well, that's, to the extent they do. Like, it would surprise me if every lawyer in Australia and New Zealand could hand on heart say that they're confident that if someone got access to one of the devices, there are mechanisms in place to protect the client information. The reality is that, you know, the level of awareness of those threats across the profession varies. You know, there are some people who don't even have passwords on the devices. And some of those passwords, I suspect, aren't particularly robust.

Dom Woolrych 1:14:28
Yeah, I know that there was a report that came out recently that said hackers actually choose professional services firms because typically they have the lowest security and the highest return on investment from a hacker's perspective, which is usually the information that they can get, allowing for the biggest ransom or whatever it might be. And we've seen some pretty big high-profile cases here in Australia recently, especially with law firms being hacked.

Chris Patterson 1:14:57
Yeah, well, I mean, the average forensic IT consultant, and I use the term quite easily, can open up most devices within a matter of minutes just using standard software that's actually reasonably available on the internet. Which is quite frightening that, you know, once upon a time, all the files were sitting in a filing cabinet. To have a data breach, someone actually literally had to come into the law office and take the file. But as you rightly said, using Microsoft 365 and storing data in warehouses somewhere in New South Wales, you could be anywhere in the world. If you know the credentials to get in and you've got access to the master key, away you go.

Dom Woolrych 1:15:49
Yeah, yeah, yeah. I think, I mean, I don't know your opinion, but I do feel like there are checks and balances in place, mostly. Let me rephrase. I think data breaches are obviously becoming more prevalent because there's just so much more data out there. People see the opportunities. But I do think that, as a whole, we are in a much better space having our documents sitting in Microsoft 365 than sitting in a filing cabinet. Do you agree?

Chris Patterson 1:16:21
Yeah, great. Look, I think you can use technology to make it far more secure than if it was in hardcopy, in many ways. But it's a conversation I don't think any lawyer wants to have with a client, having to say, "I've had a data breach, and your confidential information is now no longer exclusively held." It could give rise to significant potential liability. It's only a matter of time before it hits the news headlines at some stage. I don't want to be the prophet of doom and gloom, and I hope it never happens, but the ticker is out there to protect information, and it's worth investing in and using.

Dom Woolrych 1:17:44
Yeah, exactly, right. Hey, look, I'm going to wrap up our podcast. This has been fascinating. It's a little dive into where we're currently at with law tech and where law tech is potentially going. It's an exciting time. Unfortunately, I think this is one of those things where, you know, given 24 months, and a lot of what we've talked about is probably going to be obsolete, but you need to stay on top of developments and where things are going. You either evolve or you die. It's one or the other when it comes to these things. Thank you. I really appreciate you being on the podcast. It's been wonderful.

Dom Woolrych 1:18:20
Thank you so much, Chris. It's been a really good chat. We'll probably have to have another session in 24 months to talk about all the new technology coming into the industry.

Chris Patterson 1:18:30
Yeah. I look forward to it.