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Canada, and the Toronto area, in particular, is a hotbed for AI startups focusing on the legal and financial professions.Getty Images/iStockphoto

For years, budding airplane pilots and race-car drivers have been able to strap themselves into virtual simulators to test their respective skills and odds of real-world success. But what about lawyers?

Recent advances in artificial intelligence and machine learning mean legal professionals are now getting the same preparatory tools as their vehicle-oriented counterparts. Proponents say the technology, which can simulate courtroom judgments, among other things, will allow lawyers to do a better job and make legal representation more affordable and accessible to a broader population.

"Law as a career will become more intellectually engaging, not less," says Benjamin Alarie, the Osler Chair in Business Law at the University of Toronto and co-founder and chief executive officer of Blue J Legal. "It's going to make the law more predictable, accessible and transparent."

Toronto-based Blue J is among a wave of startup firms using AI to tame and manage the continually growing pile of documents, transcripts and case law that legal professionals deal with.

A good portion of many lawyers' time – and therefore what their clients are paying for – is spent combing through such files by hand to prepare cases. AI tools offer the promise of automating the search processes, then delivering summaries of pertinent information and saving their human users hours of drudgery.

With machines able to quickly sift through reams of data, lawyers will then be able to spend more of their time personally interacting and crafting strategies with clients, Mr. Alarie says.

Blue J, which launched in 2015, goes a step further with simulation software that predicts how a court might rule in a given case. The company's first product, Tax Foresight, crunches various inputs, including client details, arguments and previous case law, and delivers a simulated judgment.

Mr. Alarie says the system, which is aimed at tax lawyers and accountants, is about 90 per cent accurate. While not perfect, it can give users a clearer snapshot of their respective positions, which means fewer cases going before a judge.

"The parties will get a better mutual trust because they'll be able to say, 'If this were to go to court, what would a court say?' We'll get increasing resolution of the boundaries."

Blue J has landed a number of big customers over the past year, including KPMG and several government agencies. In May, the company secured an undisclosed amount of funding from Mistral Venture Partners II and is now up to 20 employees.

Canada, and the Toronto area, in particular, is a hotbed for AI startups focusing on the legal and financial professions. Aside from Blue J, a few notable standouts include Kitchener, Ont.-based audit software maker Ark Paradigm, Toronto-based Knote, which designs text redaction tools, and legal document search firm Ross Intelligence, also based in Toronto.

Blue J is finishing off its second product, Employment Foresight, which will bring similar predictive judgment simulations to labour law. Mr. Alarie believes that just about any field that involves contracts, transactions or relationships – which includes tort law, personal injury and liability – is fertile ground for his company's software.

"Every time we tackle a new area we become more versatile," he says. "The sky is the limit."

As with any new form of automation, the application of AI to law is provoking concerns about the future of employment in the profession. A report this year by the International Bar Association, for example, added lawyers and accountants to the list of workers who could eventually be replaced by algorithms.

While robots have been replacing humans in manual professions for years, improving AI will soon do the same to people performing routine cognitive tasks as well, the report warned. Any job that involves repetition – such as searching through legal documents – is at risk.

But some observers aren't convinced that's a bad thing.

Colin Lachance, CEO of Canadian legal research platform Compass and former president of the Canadian Legal Information Institute, says AI will likely change the traditional training path for the young lawyers who often get saddled with document-searching tasks, but the need for legal professionals overall is unlikely to wane.

"You're removing an inefficiency in a market where there's already a surplus of demand over supply," he says. "If you can reduce the cost of operations through the application of technology, you should in theory be able to serve more clients."

That improved efficiency could lead to the lower legal costs and greater public accessibility that AI proponents suggest, but it could also result in the opposite. Experts warn there is always the possibility that legal firms could simply gobble up the cost savings in the form of higher profits.

"Anything we can do to lower the cost of legal services is a good thing. That should, at least in theory, get passed on to the consumer," says Sunil Johal, policy director at the Mowat Centre in the school of public policy and governance at the University of Toronto. "It should serve to open up the marketplace in a positive way for consumers – if it's managed appropriately."

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