On 3 October 2024, Richard Orpin, Director of Regulation and Policy at the Legal Services Board, gave a speech to the London Law Expo. The speech, ‘The role of regulation in supporting technological innovation that improves access to legal services,’ is available below.
Introduction
Good morning and thank you for joining us for this first session here at the Tech Hub.
And, Shawn [Curran, chair], I share your enthusiasm about digital innovation. Today we have an excellent line-up of speakers to explore its role in legal services.
So, I’m Richard Orpin, Director of Regulation and Policy at the Legal Services Board, or the LSB, and I thought I should begin by saying a few words about who we are and what we do.
The LSB is, in short, the oversight regulator for legal services in England and Wales.
We’re a statutory body created by the Legal Services Act of 2007. We’re independent of both the profession and government, and we’re accountable to Parliament.
Our role is to oversee the performance of the eight legal services regulators, who in turn regulate businesses, professionals, and other legal entities.
It’s worth nothing that while regulation applies to professionals who may use technology to provide legal services, neither we nor the bodies we oversee regulate the technology itself or the developers who create and build it. I’ll come back later to the risk inherent to that arrangement: the risk of an accountability gap.
What I’ll do this morning is give an overview of the LSB’s approach to technology and innovation, emphasising where we think it can add value for consumers and providers of legal services.
I’ll then explore the flip side: where we think digital transformations present risks, and what regulation might do to mitigate those risks.
What I hope you’ll gain from my remarks will be an understanding of our approach to oversight regulation and our expectations of frontline legal services regulators (such as the SRA, BSB and CRL) when it comes to technology.
Our approach to technology
Right off the bat, let me say that at the LSB we’re enthusiastic and positive about the potential of technological innovation in legal services.
As the oversight regulator, our objective is for regulation to support technology and innovation to deliver public good, to improve access to justice, and to help address unmet legal need.
We recognise, for example, that lawtech could improve the diversity and reach of legal services. And we can see how new innovations could improve efficiency and reduce costs, in ways that would help the legal sector to become more competitive and ultimately lead to lower prices for consumers.
Our research shows that consumers, including small businesses, are open to using tech to access legal services. Meanwhile, legal firms continue to seek tech-based solutions to meet their clients’ needs.
So, as I say, we’re enthusiastic and positive.
In fact, we think that legal services regulators should be actively encouraging innovators into their space. And those regulators should be flexible, to accommodate new types of service delivery.
We know that some innovators are put off by how complex the regulatory landscape is for legal services. We encourage regulators to help reduce barriers, making it easier for innovators to develop products that can benefit consumers, while protecting them from risk.
To this end, earlier this year, we published new guidance for regulators that reflects our pro-innovation approach to lawtech.
The guidance isn’t prescriptive. Instead, it allows regulators to consider how they can meet three outcomes in ways that are most appropriate to their regulated communities. And those outcomes are about how regulation can:
- enable the use of technology to improve access to legal services;
- balance the benefits and risks for the greater benefit of consumers;
- and actively foster a regulatory environment that is open to technology providers and innovators.
So, we’re outcomes-focussed, we’re technology-neutral, and we want to see regulators show an openness to technological innovation.
Earlier this year, we also published our strategic approach to AI regulation. On that note, we were pleased last month to see the Lord Chancellor sign the first international treaty to address the risks of AI, a treaty that specifically safeguards democracy and the rule of law.
Challenges
I’ve painted, so far, a positive – even optimistic – picture of the potential of technological innovation for legal services.
But we’re alive to its risks and challenges, too.
So, now I’ll pose a question, and I’ll suggest some answers from the LSB’s perspective. The question is this:
What are the most significant regulatory challenges and risks arising from the use of tech and specifically AI?
I’ll run through six areas of interest for us.
Pace of change
First, pace of change. We can all see that the pace of change is accelerating rapidly, particularly for AI. We, and the frontline regulators, are trying to hit a moving target in both the development and adoption of AI tools.
This is why our guidance is principles-based, to ensure that regulation can be flexible and adaptable as things move and change at speed.
Accountability
Our second area is accountability. Regulatory frameworks absolutely need to provide clarity around who is accountable should anything go wrong.
I’ve mentioned already the potential ‘accountability gap’ — that is, the people who develop lawtech are unlikely to fall within the usual regulatory framework for legal services in England and Wales. In other words, the lawyers providing the advice are regulated, but the tools they use, and those who develop them aren’t — or, at least, not by the same regulators.
We know that this is a concern for legal professionals who are worried about having to take responsibility for tech-related errors or decisions based on tools they don’t control.
Consumers, meanwhile, are concerned about transparency, privacy, and data confidentiality. They want to be sure that, in the final instance, there’s human oversight of tech’s involvement.
Our position is clear: lawyers are ultimately responsible for the advice that they provide, including advice developed in full or in part with technological tools.
It’s the lawyers’ job to assure themselves that their tools are appropriate and their advice is correct and sound. But there is also a responsibility on law firms, and other firms who employ lawyers in-house, to ensure that technology rolled out in their organisations has been appropriately tested.
Transparency
Third area of interest: transparency. It’s really important that lawyers who are relying on AI to provide advice can explain how that advice has been formulated. This means that regulatory frameworks must enable legal professionals to access, understand, and interpret the decision-making process of an AI system, where that system has contributed to the advice given to a customer.
This includes being able to identify, account for, and eliminate any biases that may be built-in to AI technologies or the data that underpin their operation.
Most obviously, these inherent biases may lead to poor outcomes in relation to EDI.
If a lawyer is unable to be transparent about how advice has been generated when AI has been involved, this will prove to be a barrier to the adoption of these technologies within the profession. It may also undermine public trust.
As the use of AI in legal services expands, so too does the need for transparency about its use. After all, the user experience of AI is so often designed to give the impression of human interaction.
There is already an obligation for legal professionals to be transparent to those they are providing a service to. However, it may be that in future a regulatory requirement will be needed to be clear with consumers when AI has been involved in the provision of legal advice.
Education
Following these points about accountability and transparency, another area where lawtech presents a challenge is around education, training, and ongoing competence.
It may be that lawyers will require greater training in data literacy, say, or the use of AI. Should this be mandatory? What would it mean for education, onboarding, professional standards, and ongoing competency?
This could be a significant change to the way that legal education works. Or it could provide a new route into the profession.
At the LSB, we want frontline regulators to ensure that legal professionals are trained, educated, and equipped to deal with tomorrow’s world, not just today’s. We know this is an area that legal services regulators are already thinking about.
Ethics
Another area of potential risk is one that’s very topical at the moment: how the use of tech and AI must support lawyers’ professional ethics.
I say topical because recent high-profile cases – such as the Post Office Horizon IT scandal – have raised serious questions about the role of lawyers in upholding the highest professional and ethical standards. Public perceptions of the profession, and the public’s trust in the rule of law, have undoubtedly been affected.
Regulators will need to consider how they can ensure that legal professionals are using tech including AI in ethical and responsible ways. Those legal professionals need to be supported, and incentivized, to handle harmful AI appropriately. This will require senior leaders in law firms, and other firms which employ lawyers, to instil a culture in which lawyers deploy AI in a manner consistent with their professional principles.
This will be an ongoing challenge for regulators, and the sector more broadly, given that pace of change I mentioned already.
I’d encourage you to keep an eye on the LSB website for a consultation on professional ethics that we’ll launch in the coming months.
Equality, diversity and inclusion (EDI)
The final area of challenge I’d like to flag: EDI and the workforce.
I’ve already mentioned that biases in AI technology or data may lead to poor outcomes in terms of EDI – discrimination against groups who are under-represented in the underpinning data, for example – but there are EDI considerations for the future workforce too.
As digital transformation moves through the legal services sector, will we see disruption to those roles that are traditionally more diverse?
For example, there tend to be more women and ethnic minority colleagues working as junior lawyers or paralegals. But these are the roles that may be under the greater threat from AI.
On the other hand, if lawtech could free up lawyers’ time, that might benefit the retention and promotion of part-time staff, who’re more likely to be women or people with disabilities.
The important thing, of course, is that any disruption to roles and working practices within the sector is an improvement, and helps the profession to become as diverse as the population it serves.
Closing remarks
I’m at the end of my remarks now, and I hope to have conveyed our commitment to ensuring that regulation actively unlocks the benefits of tech for consumers and providers alike.
Our approach, and our guidance for legal services regulators, is to encourage flexibility in harnessing the benefits of tech, while recognising its challenges and mitigating the risks.
We’ll continue to engage the sector, and wider stakeholders, to scan the market for opportunities and risks in their early stages. We’re also ready to act if we believe that regulatory frameworks are not adequately managing the risks emerging from new technologies.
Ultimately, we all have a great opportunity to act positively and proactively to harness the transformative potential of technology. It could significantly widen access to legal services for the thousands of consumers who need them each year. But we must build solid foundations at this early stage of adoption to ensure that AI tools are used to further the public interest.
It’s up to regulators and the sector to make this a reality.
Thank you. I look forward to hearing your thoughts.
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