Speaker 1: Transcriber's Name Reviewer's Name Harry Lewis Harry Lewis. 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 when 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, which has 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. 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. Law tech or rec tech for short. Law tech or rec tech 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 law tech and rec tech 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 an 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 law tech startups 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. 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 are 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 to hundreds of past cases to find the specific ones that would help 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 this actually makes 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 law tech technologies, solutions being built by startups, powered by artificial intelligence, that can go to all the available case law and intelligently flag the ones and summarize the ones that the lawyers 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 actually, 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. And the good news is we can now use some of these rec tech 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, it's 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, 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 rec tech solutions now that can not only do the work that are being done today by humans better and faster, but also you can plug in into these rec tech 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 this actually not only, 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 really exciting with LaTeX and rec tech 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 from 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 US dollars. And the problem with this, 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 of 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, it actually 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 are making in this 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 clicking, to accepting those terms and conditions that you never read. The reality is that legal documents right now, legal agreements are actually not only lengthy and ambiguous, but in many cases, in most cases, you need to actually rely on a third party to enforce it. In the event that your contract counterparty does not fulfill its obligations, actually 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 it, is not only not practical, it doesn't exist in many countries around the world, but even when it does, it's very cost-prohibitive. And actually, this is where we can have blockchain be part of the solution as well. One way of 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 our 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 will actually 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 that the parties have agreed to, but automatically execute them upon an occurrence of often a publicly verifiable and available information. And the examples I just gave, the results of sports games, or the flight, landing, and departure times, which are all public. And again, blockchain to this day, we're still, the 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 in many years of actually contract enforcement and counterparty risk. So, all these examples that I mentioned are very, very exciting, and the field of law tech and rec tech 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 this around the world to fix these problems that I'm confident we will actually get there. Many of us in the global law tech and rec tech community are working not only with 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're a competition to human lawyers, a bit like the taxi industry did with the arrival of Uber and other ride-sharing devices. To come back to my initial example, in the U.S. you have more than 1.3 million licensed lawyers. And that does not include even 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 common-sense 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 as well that we've tried to focus to train 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.