Technology is Changing How Lawyers Serve Insurers

September 13, 2023 | Alan S. Rutkin | Mary Aperance | Insurance Coverage | AI

Like it or not, technological changes are on the horizon for the legal profession. This article highlights how lawyers will need to consider the ways in which technology tools can improve the way they serve insurers—while also being aware of the risks.

Thanks to the COVID-19 pandemic, technology has changed how lawyers serve insurers. The most notable is the adoption of Zoom for what was once in-person proceedings. Like it or not, more technological changes are on the horizon, complete with benefits and risks. Wise lawyers will consider how technology tools can improve the way they serve insurers.

A Change Did Us Good (Mostly)

COVID has been awful, but it forced lawyers to stop resisting many technology aids. Some lawyers had resisted technology changes by claiming to be “old school.” But that group has really become “no school” because technology changes improved collaboration and efficiency.

To a great extent, new technology has benefited lawyers and insurers.

Lawyers thought physical presence was needed for motions, depositions and other proceedings—but we were wrong. Remotes and other new technologies usually worked well. Complex motions were decided. Experts were deposed. Big cases were mediated. Insureds’ claims were settled.

What’s more, remote proceedings are almost always more efficient. Clients avoid charges for travel, delays and other wasteful logistics. Tech-aided remote is usually more efficient. It saved clients’ money.

Remotes transformed communications with clients. Communications are better when you see other people’s gestures, and they are better still when you see other peoples’ documents. It’s valuable to review and edit documents immediately and collaboratively (real-time editing is stressful for lawyers, but it is great for clients.)

These technologies were available before COVID. But now, setup is easier, resistance is gone and use is frequent.

More ‘Change Is Gonna Come’

While technology made big changes to lawyering over the past three years, the next three years may bring bigger changes.

The biggest change may be generative artificial intelligence; it’s generative because it creates things. This artificial intelligence (AI) is the brain behind chatbots like ChatGPT. The computer grabs data from the internet and other sources. Neural networks such as large language models (LLMs) find patterns in the data, which allow LLMs to respond to our questions. Our understanding of the technology was largely shaped by a great article in the Washington Post, “A curious person’s guide to artificial intelligence,” May 7, 2023.

What does this mean for lawyering? A recent Goldman Sachs report estimated that 44% of legal tasks could be automated by AI. That seems high, particularly in the near term. But AI will change law services in ways that save clients money.

AI will assist, if not do, many lawyers’ tasks. These tasks include legal research, contract analyses and document reviews. AI might be used to refine routine motions and other documents. Some firms have tried AI on due diligence, contract analysis and regulatory compliance. AI can help draft social media posts and blogs on legal topics and create pitches for attracting new clients. AI might also assist lawyers and insurers in preparing and maintaining administrative documents such as claims logs and chronologies.

While AI is important and attracts the most media attention, some technologies cry out for improvement.

Many existing tech tools are cumbersome:

  • Screen shares need to be more interactive so that parties can edit and mark more easily. • Secure file transfers need to be more easily done by lawyers alone, without help from IT. And transfers must be more secure. This is a crucial concern for insurers because hackers often target insurers’ files. • Password protocols and two-factor identification need to be easier (we can only hope that these processes cause criminals as much suffering as they cause us). • Document management and searches have greatly improved in recent years. However, we expect significant improvement in coming years, as well as lower costs.

We expect these and other incremental improvements.

It’s in the Way That You Use It

We also see risks with how lawyers use the next wave of tech, particularly AI.

AI presents a new concern: the generation of false information. Techies call this “hallucination.”

AI hallucination recently brought down a New York lawyer who relied on a chatbot to prepare his brief. The chatbot assured the lawyer that the “cases I provided are real and can be found in reputable legal databases.” But they were made up.

To protect against hallucinations, we’ll need guardrails, and we’re starting to get them.

U.S. District Judge Brantley Starr of the Northern District of Texas adopted a standing order requiring lawyers to attest that either no portion of their filing was drafted by AI or that any language drafted by AI was checked for accuracy by a human being. Even when not subject to this type of an order, no sensible lawyer will rely on AI without thoroughly checking the work.

The Senate is considering a bipartisan proposal to regulate AI.

What’s more, at the August 2023 ABA meeting, the House of Delegates adopted Resolution 609 calling for AI developers to “ensure that their products, services, and capabilities are subject to human authority, oversight, and control….”

Another AI risk is client confidentiality. Chatbots could disclose client confidences. ChatGPT warns users not to share sensitive information in conversations with the program. Some services are reportedly trying to protect confidential information.

The use of AI can also increase the risk of cyberattacks. This is particularly true for firms, which house a large amount of confidential data.

Bias can creep into AI. Chatbots are built by people who have their own biases, and as the models become more capable, the risk of bias can increase. Because the risk of bias can be so high, some companies will not use AI when making certain decisions, including hiring.

The creation of new content may also raise questions of copyright ownership and intellectual property rights.

As these technologies advance, law firms and insurer-clients must carefully consider how to use AI safely and accurately.

Again, while many focus on AI, there are also concerns about older tech practices.

A big concern to insurers is file sharing, which has proven vulnerable to attack. Law firms and insurers need to share files, and they do it with technology services. Sharing services are the arteries allowing work to flow between lawyers and insurer-clients.

However, these arteries can be cut and compromised, exposing large amounts of confidential data. The worst incident may have been the MOVEit hack. In the spring of 2023, MOVEit was compromised, reportedly affecting 40 million people and more than 600 entities, including some insurers.

Individual law firm security is another major concern. Prominent firms have been hacked with reports of cyber attackers gaining access to different types of data such as personally identifiable information.

Criminals will surely continue these attacks. Willie Sutton supposedly said that he robbed banks “because that’s where the money is.” Today, “the money is” in the computers of law firms and insurance companies—so we must guard these computers against the modern-day Willie Suttons.

The Future’s So Bright

We are optimistic about the next phase of technology change. Lawyers should embrace these changes, while being sensitive to accuracy and security.

What’s more, resistant lawyers need to consider their ethical obligations.

Since 2012, Comment 8 to Rule 1.1 has stated: “To maintain the requisite knowledge and skill, a lawyer should … (ii) keep abreast of the benefits and risks associated with technology the lawyer uses to provide services to clients or to store or transmit confidential information….”

This past August, the American Bar Association’s House of Delegates expanded on this obligation with Resolution 609. Here, lawyers were told that the obligation to stay informed about technology explicitly includes “artificial intelligence and machine learning.”

Technology resistance is no longer an option.

Reprinted with permission from the New York Law Journal©, ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

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