Legal Tech And AI ' A Revolution Of The Legal Industry?

• Published date: 20 November 2023
• Subject Matter: Litigation, Mediation & Arbitration, Technology, Trials & Appeals & Compensation, New Technology
• Law Firm: KNOETZL HAUGENEDER NETAL Rechtsanwaelte GmbH
• Author: Ms Katrin Hanschitz

In a world where artificial intelligence (AI) is used by so many in the legal profession to undertake a wide array of tasks formerly undertaken by specialized legal staff, and where many businesses turn to ChatGPT and similar instruments for free legal support, should the legal industry fear or embrace AI?

A. Judicial Decisions - Austria

The Austrian Bar was unsure. So, it sought judicial guidance concerning a startup LawTech company operating in the DACH region (Germany, Switzerland, Austria) that used "incaseof.law" in its domain name and e-mail address.

1. The Defendant's Business Concept

The firm describes itself as an online "legal department on demand" for small and medium-sized enterprises. Clients submit documents and case descriptions online. These are processed by an AI tool to identify the underlying legal issue and identify an appropriate member law firm, based on specialized practice areas and industry focus as well as comparable cases and success rates.¹ The AI tool provides the matched law firm/lawyer with research, with suggestions for solutions and actions and even draft communications and briefs. All communication is undertaken via the platform until the client has mandated the matched lawyer. The matched lawyer is required to issue its invoice via the platform, which retains 25% of the fees paid.

As with ChatGPT and similar tools, the more documents and cases that are processed via the platform, the more the tool learns ' and the better the results its produces.

2. The Legal Environment

As in many other continental jurisdictions, in Austria the term "lawyer" is zealously defended, and may only be used by legal practitioners who have completed full training,² have passed the bar exam, and are registered with the local bar.³ The practice of law for consideration (representing clients in court and before public authorities, drafting legal documents, providing legal advice to external clients etc.) is, for the most part, reserved to "lawyers" and "law firms."⁴ The impermissible practice of law by non-lawyers is sanctioned by criminal penalties.

3. The Complaint

The Austrian Bar sought to prohibit the use of the brand "incaseof.law" as unfair competition, arguing that it suggests to the public that the company is a qualified law firm.

The Bar also wished to prohibit the provision of automated legal advice in the form of recommendations for actions by the platform to the lawyer as unfair competition, positing that this violated the rules...