Running a law firm in today’s business environment is challenging enough, but what happens in the future as machine learning systems – like IBM’s Watson – become part of the law firm?

Panelist gathered during the CFO-CFO Forum to discuss that very issue in a session called “The Watson Effect: Delivering Client Value in Artificial Intelligence & Machine Learning Technology.”

 As moderator John Fernandez, U.S. chief Innovation officer and partner, Dentons US LLP, and global chair of NextLaw Labs, noted, the application of artificial intelligence and machine learning as a business solution has been teased for some time with observers saying, “This is the moment.” While many of those moments have been “hype” up until now, a number of attendees noted that law firm partners and clients are becoming more interested in the technology.

As Craig Courter, global chief operating officer at Baker & McKenzie LLP, noted, there’s likely some “reality” with the current machine learning technologies, but there is a “peak of inflated expectations” right now.

“What we’ve got is a tool, a solution, that’s come to law firms looking for a problem to solve,” Courter noted. “Several law firms are going to spend a lot of money trying to solve this – several will fail, a couple will succeed. At the end we are going to figure out, ‘how does this really work in law firms,’ but I think there’s a [way to go] before we know that.”

As Kingsley Martin, president and CEO of KM Standards, explained, many organizations have succeeded in creating or leveraging technology that can perform tasks like e-discovery and contract work that can exceed human capabilities, but there’s a misunderstanding about the technology itself. “We need to talk about the definition of A.I. (artificial intelligence), and it’s neither ‘A’ nor ‘I,’” he remarked. “It’s not ‘I,’ it’s not intelligence… not in the way that we think of Sherlock Holmes and his deductive reasoning process, it’s actually the other way, it’s an inductive reasoning mechanism, it’s pattern recognition.”

As Martin described, attorneys have seen, and are already familiar with these technology capabilities, when it comes to tools like Westlaw.

Madhav Srinivasan, chief financial officer of Hunton & Williams LLP, was keen to point out that “artificial intelligence” was a term coined in 1955, but when IBM recently put Watson’s APIs for public use, the term “cognitive computing” took on a new relevance because it is “a true problem-solving approach, which has business value.”

He goes on to note that the legal business has been fascinated with the technology because it has been deployed in e-discovery and contracts, leading many to wonder where next? In some ways, cognitive computing will perhaps extend its impact on the firm in more incremental, practical ways. The panel cited examples beyond the legal industry – like retail, weather forecasting and more – where cognitive computing has made an impact on a big data “problem.”

Courter noted that in his firm, data analysis has been one area where cognitive computing has been effective, enabling the organization to work from a single, global database to look at metrics, including profitability and processes. The value proposition in the evolution of the technology may be more unexpected, he notes.

“My understanding of something like Watson is that it could go in and find things that we’re not asking it; it can go in and find things that are just hidden to us in the vast amount of data there,” Courter said.

The challenge for law firms, Courter and Martin agreed, is the cost of investing in such technology. To Srinivasan, law firms face another challenge – unstructured data.

“The first step is, ‘what do you want to solve,’ and the next step is ‘what is the technology that will solve it?’” he noted. The panel seemed to agree that the threat cognitive computing poses to the human attorney is, in large part, “talk.”