Transcriber: Eunice Tan Reviewer: Tanya Cushman
(Armenian) Good morning.
Good morning.
Very, very excited to be here this morning.
Let me start by asking all of you a question.
I want you to think about the last time
you had to enter into an important legal contract -
say, a new employment contract
for a new job
or a lease for a new apartment.
You probably would have liked to consult a lawyer, right?
But you probably didn't,
as you thought, like many others,
that it would be too expensive.
I want you to think about a time that you were confronted with a situation
where you needed to understand what your rights were,
like the sudden death of a family member
or being unexpectedly fired from your job.
Was finding the right information easy?
Probably not.
Well, you're not alone.
Even in a country like the United States,
with one of the highest ratios of lawyers per capita,
around 80% of the population does not have access to legal services.
And it's actually a bigger and broader problem than that.
The United Nations estimates
that around 4 billion people around the world
are actually excluded from the rule of law.
But wouldn't it be great if we can actually change that?
Well, we may have a chance,
using the latest innovations
in the field of legal technology and regulatory technology -
"lawtech" or "regtech" for short.
Lawtech or regtech are the use of new technologies,
from artificial intelligence to blockchain,
that can help us deliver not only legal services better and more efficiently
but also help us tackle regulatory and compliance burdens
more efficiently and more effectively.
And what I want to share with you all today
is how these latest innovations in the field of lawtech and regtech
will not only change centuries-old professions,
like being a lawyer,
but will allow us to conceptually change many of the big concepts we've had,
like trust, contracts, and access to justice.
And this will have not only impact on each one of you in the room today
but billions of people around the world.
Let me give you one example.
Imagine next time you have a legal question,
you can take out your smartphone and ask a robot lawyer for the answer.
Well, some lawtech start-ups are building just that:
legal chatbots.
These messaging apps
allow you to actually talk as if you're talking to a human lawyer,
but actually, instead, you're talking to a computer program
who can answer you anytime, anywhere,
with answers to your basic legal questions.
Just for example,
imagine you separate with your partner
and you want to know
what are the relevant custody rules that apply for your children,
or you're a single mom
and want to know what state benefits are available to you.
While the most complex and bespoke legal questions
will and should be answered by human lawyers,
the reality is that we can now program a lot of basic legal answers
into decision trees
and deliver this via chatbots to the public at large
via tools that people use every day -
from Facebook Messenger in the West and in Armenia
to tools like WeChat in Asia.
And where this becomes really powerful
is when we are able to help those who need it the most.
Think about refugees looking at making asylum claims.
In that instance, the chatbot -
accessible via any smartphone -
can ask the relevant questions,
determine what are the rights of that individual,
propose some options,
and potentially file on that refugee's behalf.
It allows us to actually help the people who need it the most
and do it in a cost-effective way and scalable way.
And with the advances we're making right now
with voice recognition technology and voice as a user interface,
we are finally able to offer these services
to the 750 million people around the world who are illiterate
and who cannot read and write -
500 million of them
being in developing countries and being women.
But even when you look beyond the most vulnerable,
the reality is that legal services are still not accessible
to even the middle class.
When I was starting out as a young lawyer in Canada and in Hong Kong,
one of the things we would do for corporate clients
was to go through hundreds of past cases
to find the specific ones that would have helped our client's case.
That's quite common in the practice of law,
but it's a bit like sending a human to find a needle in a haystack.
According to some studies,
lawyers spend up to a quarter -
and in certain cases, up to one-third -
of their time doing such research.
Not only does this actually make it very costly for those who can afford it
but also acts as another barrier to access to legal services,
including for the middle class.
Well, the good news is now we have a lot of actual lawtech technologies -
solutions being built by start-ups, powered by artificial intelligence -
that can go through all the available case law
and intelligently flag the ones and summarize the ones
that the lawyer should focus on,
not only on key terms but because of the context as well,
allowing us to bring down the work that would take hours into minutes,
and bringing down the cost of legal services,
and making it more accessible.
But when you look at this, often the question that comes up
is how can we actually use these technologies
to solve the big global problems -
the ones that are cross-border,
at transnational level?
The good news is we can now use these regtech solutions
to solve these problems as well -
at least try to.
Let me give you the example of global money laundering.
Today, banks around the world spend billions of dollars a year
to try to spot and stop funds coming from criminal organizations
and those coming from corrupt politicians.
The goal is to stop these funds from entering the global financial system
because once there,
they can go to fund terrorism, human trafficking,
or other corrupt practices that end up affecting us all.
The process is actually a pretty big problem.
The United Nations estimates
that the global volume of money-laundering transactions
around the world
is between 1 to 2 trillion US dollars a year.
And the problem is we're able, today, to stop less than 1% of that amount,
which means that despite all our efforts,
all our efforts against global money laundering,
have, in practice, failed.
One of the reasons, actually, is that the process is still very manual.
It's very costly, time-consuming, and prone to mistakes.
And here again, we have a lot of regtech solutions now
that can not only do the work being done today by humans
better and faster,
but also you can plug in into these regtech solutions
big tons of data,
and the AI can actually go spot the patterns
that even a human money-laundering officer could never even spot.
And the beauty of these solutions is that the more we train them,
the more data we give them,
the system becomes even more accurate,
allowing us to get one step closer
to stopping the funds from these corrupt politicians
from entering the global financial system.
But where this becomes real exciting with lawtech and regtech
is when we're able to take these new technologies
and completely transform how we do things.
One technology that enables us to do this is blockchain technology.
You've all probably heard about blockchain by now.
But to keep it simple,
it's really a database that is decentralized -
basically, not staying at the same place;
immutable -
once the transactions are agreed, they cannot be changed;
and consensus-based -
for a transaction to go on it, everybody has to agree.
And blockchain will change many facets of our lives over the coming years,
but it will have also a particular impact in the field of law.
Let me give you an example.
Today, in most countries,
if you want to go buy a house,
you have to go see a lawyer or a notary,
depending whether you're in a common law or a civil law jurisdiction.
That individual will perform some checks,
say, to ensure that the house you're buying
actually really belongs to the seller,
but also will try to verify that the title you're buying
is clear of any hidden mortgages or other liens attached to it.
Once again, the process is not only costly but not very efficient.
And by the way, that is not even the big problem.
The problem is that for most of the world, that legal title does not even exist.
Again, according to the World Bank,
70% of the world's population
does not have access to proper land titling.
To put that in economic terms,
some experts estimate that the value of "dead capital" -
in which people do not have access
to the legal title to the land, the house, the car,
and other assets that they own -
at around 20 trillion U.S. dollars.
And the problem with this
is it traps people into this vicious cycle of poverty.
You cannot borrow money
based on the land that you have or the house you have,
but also you can lose the roof that you have at any moment
or the one you just thought you paid for.
And probably even worse than this,
you are at the mercy of corrupt government officials
who can come and amend those land titles
whenever they want
in exchange for bribes -
a problem that is still, unfortunately, common in many countries around the world.
Well, blockchain can be part of the solution.
Not only putting land title transactions
on the blockchain
makes it cheaper to buy and sell houses,
as you don't need those lawyers anymore or notaries
to act as those trusted intermediaries
as the blockchain can do that work,
but most importantly, actually,
it makes it practically impossible for corrupt government officials
to amend these land titles
and take the property away from those who probably deserve it the most.
And the advances we're making in the space are actually quite impressive.
Let me give you another example:
contracts.
All of you enter into contracts every day,
from buying goods online
to actually accepting those terms and conditions that you never read.
The reality is legal documents right now, legal agreements,
are actually not only lengthy and ambiguous,
but in many cases - in most cases -
you need actually to rely on a third party to enforce it.
In the event that your contract counterparty
does not fulfill its obligations,
enforcing it is actually very costly and time-consuming.
You have to first find them, hire lawyers, go to court,
and hope that you're going to end up with an impartial judge
who's going to set the record straight.
The last point, as we all know,
is not only not practical
and doesn't exist in many countries around the world,
but even when it does, it's very cost-prohibitive.
And this is actually where we can have blockchain
be part of the solution as well.
When we're doing this is via what we call "smart contracts."
Smart contracts are actually programming code on certain blockchains -
most notably, the Ethereum blockchain.
It allows you to not only facilitate and execute contracts
using only blockchain technology;
the smart contract code
will actually set the rules, the obligations, and the benefits
as a normal contract would,
but the smart contract would automatically execute them
upon the occurrence of a certain event.
For example,
let's say you make a bet with your friend on the outcome of a football game,
where the winner would automatically get paid by that smart contract
as soon as the game is over.
Or imagine buying a travel insurance policy
where the smart contract would automatically pay you
as soon as your flight is delayed.
Smart contracts allow us actually to code
not only the obligations the parties have agreed to
but automatically execute them
upon the occurrence of often public and verifiable and available information -
in the examples I just gave,
the results of sports games
or the flight landing and departure times,
which are all public.
And again, blockchain in today's use cases are quite narrow,
but the beauty of it is actually we're starting -
and we're still very, very far from getting rid of traditional contracts,
but we are able to solve
some of the most long-standing problems we've had for many years
of actually contract enforcement and counterparty risk.
So all these examples I mentioned are very exciting,
and the field of lawtech and regtech will really transform the world we live in
in the coming years.
However, it's important to understand
that we're still in the very, very early days.
A lot of the use cases that I mentioned will succeed,
but many, many of them will fail.
But we are so many people trying, around the world, to fix these problems
that I'm confident we will actually get there.
Many of us in the global lawtech and regtech community
are working not only with the regulatory and legal practitioners
but also with governments and regulators
to ensure that we have the right ecosystem in place
to allow these technologies to flourish.
But we also need the legal industry, the regulatory practitioners themselves,
to be willing to change.
For example, for the legal chatbot example that I gave,
it will be interesting to see if bar associations and law societies
will be willing to embrace these new technologies
or actually try to block them as they are competition to human lawyers,
a bit like the taxi industry did
with the arrival of Uber and other ride-sharing devices.
Come back to my initial example.
In the U.S., you have more than 1.3 million licensed lawyers,
and that does not include the large number of paralegals and regulatory staff
that do a lot of the monotonous and actually time-consuming work.
Many studies over the years
have tried to predict the impact technology will have on lawyers.
Some predict that 25% to 40% of legal jobs will disappear,
to other more extreme ones -
actually predict the structural collapse
of law firms.
The reality is actually more nuanced than that.
Yes, many jobs will disappear.
A lot of the monotonous, regular, time-consuming work done by lawyers
will disappear.
But technology is still very far
from disrupting some of the real value-added work that lawyers can provide,
like strategizing, negotiating,
making commonsense judgments,
or even visiting a client in jail.
But it's true that many jobs will disappear.
But also new ones will be created:
think about smart contract-coding lawyers
or regulatory data scientists.
And it's very important
that we try to focus on training the next generation of legal talent
to be ready not only for these roles
but for this new reality they're going to live in.
I remember a joke when I was in law school
that went like this:
How many lawyers does it take to change a light bulb?
The answer -
as many as you could afford.
I'm hoping with the changes going on and for the years to come,
in the coming years, the answer to the question
of how many lawyers does it take to change a light bulb
will change to only one:
the one who built the chatbot and programmed the smart contract.
Thank you.
(Applause)