Machine learning (ML) and artificial intelligence (AI) often rank high on lists of digital transformation trends in the legal industry, and there’s a good reason: legal software that utilize ML and AI help lawyers make the strongest argument for client positions. One of the most time-consuming parts of practice is the legal research and due diligence required to determine where a client stands. These new tools drastically reduce the time it takes fortify client positions and gain an advantage in settlement discussions.
But advancements in legal technologies are only transformative when there are pioneers at leading law firms who are willing to implement new products. David Chodikoff, a partner and national leader of the tax disputes resolution group at Miller Thomson LLP, is one such pioneer.
Chodikoff is a former tax litigation counsel and Crown Prosecutor at the Department of Justice Canada who has appeared in over 565 cases heard by the courts. In addition to working at Miller Thomson LLP, he is currently working on his 10th tax book.
Miller Thomson LLP is a leading full-service pan-Canadian law firm. The firm is widely regarded as one of Canada’s best in business law.
Innovation is critical to meeting demands
Across nearly all industries, company spending on AI is expected to grow to over $125 billion in 2023, according to Forbes.
Historically slow to change, the legal industry is also beginning to adopt AI. In fact, according to research done by Thomson Reuters, 60% of organizations expect to increase investment in AI by more than 50% in the next year. This gradual shift is driven in part by individuals like Chodikoff who continue to push the innovation envelope.
“I think innovation is critical,” says Chodikoff. “When you see how firms are evolving on a global basis and dealing with the demands that our world is putting upon businesses, you have to be thinking about and employing ways to better serve the interests of your clients.”
What clients want
In today’s difficult economic conditions, clients are demanding bulletproof advice at a reasonable cost. To stay competitive, leading legal service providers are becoming highly responsive to the predominant challenges faced by the industry.
“There are common challenges to all practitioners – there is greater competition, pressures on fees and the ever increasing demands of clients,” says Chodikoff.
Firms that adopt AI-backed legal research software are taking proactive measures to ensure that clients walk away knowing they’ve received the highest quality legal advice without paying exorbitant fees.
“At the end of the day, clients care about results and costs,” says Chodikoff. “Clients want excellence of service, problem solving at the highest level, and cost efficiencies.”
How artificial intelligence helps
AI-based legal research tools offer lawyers a quick way to access data analytics to support clients’ tax positions.
Additionally, AI-based legal research also enables legal practitioners to fortify client positions by accessing the most relevant previously-decided cases that are factually similar to their client’s situation.
“Surprisingly, as one would not normally think about this, AI adds new dimensions to legal arguments and uncovers case law that is often right on point,” says Chodikoff. “Truly, AI is a major method to save time and costs.”
The AI tool that Chodikoff mentions is Blue J Tax. The software applies AI to all relevant past judicial decisions in an effort to help lawyers and other tax professionals determine the strength of their position on issues like carrying on business, tax on split income, taxable benefits, worker classification, and many others.
“Blue J Tax is both fast, accurate and provides an in-depth way to siphon through case law. Typically, the AI can further provide both valuable insight and useful, succinct analysis,” says Chodikoff.
“Prior to the availability of Blue J Tax and the rapid analysis of information that it enables, I’d either conduct my own research or rely on the assistance of an associate or student of law to conduct that research.”
Blue J Tax’s versatility lends itself well to several places in the research process, whether that is in the initial intake process or at a later stage of fortifying a client position.
According to Chodikoff, “every lawyer has their own way to problem-solve and the AI of Blue J Tax can be tailored to meet the needs of a particular style of research.”
Widespread adoption is coming
“The practical benefits to law from AI are intelligent computational tools. The relationship between AI and law is truly synergistic,” wrote Edwina L. Rissland in a 1990 article for The Yale Law Journal about artificial intelligence and the law.
It’s been almost 30 years since Rissland wrote her paper, and the message still holds true: the practice of law benefits from being involved with AI, and vice versa. Those who hold off adopting technologies powered by AI are depriving themselves and their clients of tools that can make a real difference in practice.
“At some point, the use of artificial intelligence will be standard fare,” says Chodikoff. “Technology continues to cause evolution in everything, including the law, and whether it takes longer or shorter, it’s going to have an impact. It’s just a question of time. Today and into the future, AI is, and will be, an essential component of any legal practice.”
This article was originally published in August 2019 as part of an ongoing series featuring leading practitioners at Canadian law and accounting firms who are leveraging new technologies and implementing innovative strategies. Blue J has since updated the article to reflect a more recent deskside chat with David Chodikoff, partner at Miller Thomson LLP.