Humanity always moves forward. From the agricultural revolution, which substantially increased productivity with new tools and methods, and on to the industrial revolution with an unprecedented improvement of manufacturing processes. Another step forward is the recent transition from the industrial revolution to the information revolution. The information revolution has accelerated due to the growing computational power in combination with network connectivity, which allows every type of device to be connected to the Internet, while collecting and processing masses of data. Interestingly, big data and the Internet of Things has providing a bridge between the newer information economy and more traditional industries.1

The justice system is infamously slow in adopting technology.1 Although recent years saw an exponential increase in the role played by technology within the justice system,2 the legal industry has not kept pace with technical advancements to the same extent as other sectors. As put by former Australian High Court Justice, Michael Kirby, a Dickensian lawyer would still feel at home in the court halls of the 1990s courts, while a Dickensian doctor would not comprehend a contemporaneous hospital due to immense modernisation that had taken place at the same time.3 However, in the COVID-19 era, the courts and tribunals are forced to conduct remote hearings, which imposes a degree of technological awareness and proficiency on the justice system.

Legal tech (LT) products and services automate certain tasks that lawyers usually perform. The use of these tools in business-to-consumer (B2C) markets create many opportunities for consumers and the justice system in general, but also raises concerns in terms of access to justice, choice and information, quality, fairness, redress, and representation (Sections 11.1.1–11.1.4). This chapter deals with the question of whether the current legal framework in the EU (Section 11.2) is fit to meet the challenge LT poses in consumer markets, focusing especially on (national) legal services regulation (Section 11.3), EU consumer law (Section 11.4), and EU data protection law (Section 11.5). It concludes that applying the current legal norms to LT creates the risk of both under-regulation and over-regulation and discusses possible regulatory options that should be taken into account at the national and EU level to strike the right balance between innovation and protection (Section 11.6).

Artificial intelligence (AI) is one of many digital technologies currently under development.1 In recent years, it is having increasing repercussions in the field of law. These repercussions go beyond the traditional effect of an economic and industrial evolution. Indeed, the epochal industrial transformations and paradigmatic shifts it generates in many sectors have, from a legal perspective, a structural impact on legal rules and on legal practice. Moreover, the speed of these transformations also impacts on the regulatory response that a legislator is able to provide. In point of fact, rather than running the risk of new legislation rapidly becoming obsolete, regulators around the world have preferred so far to take their time to observe the changes unfolding in current technologies, and to assess their impacts from the legal point of view, before proposing any specific courses of action. Although legal experts, contrary to ethicists, have traditionally shown little interest in AI, algorithms, machine learning and so forth, it is now virtually impossible for them to ignore the impact of AI on the law, and more specifically, the question of whether actual legal rules and regulations can cope with the changes taking place in the economy and in the society, on one hand, and whether the use of AI tools in legal practice is compatible with the founding principles of our legal orders, on the other hand. If new rules are needed, lawyers will have to define their content and how to make sure they are suitable for the long term, in a context of rapidly changing technologies.

It is difficult to come up with any events after World War II that have led our entire global society to recognise that before The Times They Are A‐Changin’1 as clearly as today’s global crisis has done. The COVID-19 pandemic and its aftermath have revealed that almost everything we once considered stable and sustainable is actually built on quite shaky ground. But the crisis has also brought out the best in our coexistence, seeing that societies in many countries have shown that they are capable of finding creative solutions to overcome the current challenges. Digital technologies have played a crucial role in the world’s response to the COVID-19 crisis. Just think of modern methods of telecommunication such as video conferencing, which have made an immense contribution to maintaining the economy and work processes, or the various corona tracking apps, which try to help stopping the spread of the virus. It can be assumed that the harmful consequences of the pandemic would have grown even greater if those digital solutions had not been available. Just as almost every area of life is affected by the pandemic, so are the law itself and legal practice.

Digitalization in the legal domain is an amazing example of the way information technology (IT) can displace or enrich typically human tasks. Fueled by the recent progress in artificial intelligence (AI) (big data, machine learning, natural language processing, etc.), this phenomenon of digitalization affects more and more legal tasks and functions. Effective examples of digitalization in the legal domain are very diverse, ranging from exploration of patent classifications1 to prediction of legal cases’ outcomes (e.g., anticipation of foreseeable damages from an action).2 One can also mention e-discovery,3 as well as the digitalization of the organization and review of legal documents.4

Today, during the fourth industrial revolution, law firms are navigating in a somewhat changing landscape. Traditional legal practice and the ways of doing business in providing legal services is under pressure to change. The pressure comes from other law firms and increasingly self-sufficient in-house counsels who are gradually handling more and more legal matters internally. Companies and their in-house counsels are demanding more specialized services and alternative pricing structures other than the traditional practice of billing by the hour. This demand is one consequence of the fourth industrialization that includes the evolution of various forms of digitization, automation, machine learning, AI, and other technologies. As any other business, law firms are not exempt from the effects of such technologies. If anything, law firms will experience significant disruptive effects on how they do business and the types of services they provide. This is mostly due to the impact of emerging technologies on changing business models, as well as the content of the demand and needs of clients, in ways that were unthinkable twenty years ago.

By 2020 law firms will be faced with a “tipping point” for a new talent strategy. Now is the time for all law firms to commit to becoming AI-ready by embracing a growth mindset, set aside the fear of failure and begin to develop internal AI practices.1

Given that artificial intelligence (AI) and machine learning (ML) count among the key technologies of the digital age, the debate on whether and how to regulate this technology raises some of the most fundamental current questions of lawyering in the digital age.1 In fact, these issues are intensively debated and are particularly controversial. In Germany, for instance, two key institutional players have taken fundamentally different views. On the one hand, the influential ‘Initiative D21’, Germany’s largest non-profit network, dedicated to a digital society and comprising key actors in business, politics, civil society, science and academia, prominently rejects the introduction of any new regulations for algorithms.2 On the other hand, the Data Ethics Commission, a group of sixteen independent experts, created by the Federal Government, ‘holds the view that regulation is necessary, and cannot be replaced by ethical principles’.3 These positions seem to imply that an either-or decision needs to be taken with respect to AI – either ethical principles or legal regulation. At least, both the Initiative D21 and the report of the Data Ethics Commission are based on the understanding of ethical and legal rules as two entirely different categories, two categories that neither overlap nor interfere with one other. This chapter will query that understanding and argue that ethical guidelines and principles may in fact bring about significant legal implications, despite their ethical branding. If this is true, it seems misleading to disguise rules as purely ethical principles, thereby hiding their effective relevance and impact. The relevance of such a potential hardening of soft ethical principles cannot be overstated, given the current emergence of a multitude of such guidelines on AI, at various levels and by different players.

The modern world increasingly integrates information and communication technologies into more and more digital services. This involves the use of artificial intelligence (AI) and its algorithms with, necessarily, a transfer of data between various stakeholders, whether through networks or devices.

Herbert Simon noted that it is the duty of people who study a new technology to offer their interpretations regarding its likely effects on society.1

Digitalization and the development of automated systems, as well as the evolution of artificial intelligence (AI), have radically changed the legal landscape and will continue to impact law at an accelerated pace. These developments have led to the creation of a new industry, legal tech (LT), which aims at creating technological applications specifically tailored for law and the legal market. LT includes a broad range of applications: some of the most prominent and recurrent examples include automation in the drafting of contracts, “mining” case-law, or the creation of smart dispute resolution systems not requiring human intervention. As a result, operations that were previously unthinkable, or that would demand an enormous amount of human resources, can now be readily done through numerous legal services available to lawyers, other professionals, and consumers.1 The rise of LT has brought about various responses, from those who advocate the innovating potential of LT2 to legal traditionalists that consider the replacement of human resources by technology to be highly disruptive.3 In addition, there are those who advocate for a level-headed distinction between “hype” and reality.4 Nonetheless, it would be shortsighted not to see that the advancement of LT is going to have a profound impact on the legal sector, in a degree similar to that which industrialization had on manufacturing.

Until one is committed, there is hesitancy, the chance to draw back. Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. I have learned a deep respect for one of Goethe’s couplet’s: “Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it.”