Depending on who you talk to, AI is either going to destroy the legal profession or save it, but everyone seems to agree that change is coming.

But what shape will that change take? What are the current capabilities and limits of AI in the particular branch of legal practice involving real estate law?

At Jora, we're keenly interested in this question because we've built an AI-enabled platform for real estate conveyancing. For the last two years, we've worked closely with a team of paralegals and real estate lawyers, using the latest AI models to determine what AI can and can't do to help close transactions quickly and easily - with fewer mistakes. We've learned a lot along the way and have come to a few preliminary conclusions.

If you're thinking AI is going to take your job, become self-aware, and eventually take over conveyancing and then the world, we'd advise you to dial back the Terminator imagery for just a moment, and dive with us into what AI can and cannot do for real estate conveyancers.

Spoiler alert: It’s more R2D2 than Terminator.

 

The First Conveyancing Revolution

This is not the first time real estate law has been upended by technological change.

Not so very long ago, conveyancing was largely a pen-and-paper process which required lots of physical files and folders, post-it notes, trips to the post office and bank, in-person meetings for every signature, and endless phone calls confirming details, getting updates, and making reminders.

Then, slowly, gradually (and sometimes painfully), the process began to digitalize. Files were scanned in and stored in digital folders instead of physical. Email replaced snail mail; some of the funds could be transferred online. Digital signatures saved everyone a few trips to the office. Then remote notarization services enabled even relatively consequential steps in the process to be moved from the concrete to the cloud. The future, however, was not evenly distributed. While some firms embraced bits and bytes over paperclips and envelopes, some firms held fast to the old ways.

And then in March of 2020, a little bug entered the world system. And through a twist of fate, not only did the Covid pandemic force everyone out of the office, but it also precipitated one of the biggest real estate booms of the last thirty years. It forced everyone in the conveyancing industry to drive headlong into digitalization or be driven out of business.

 

What can AI Revolutionize?

Like the digitalization of conveyancing, the AI-enabling of conveyancing will not happen all at once. And we certainly hope the issue isn't forced by another pandemic. But it's going to drive real change, and the firms which take the time now to understand this change will stand to benefit the most. So, what can AI do for real estate law?

Where AI shines is in its ability to digest a virtually unlimited amount of data (documents, details, financial terms, content from external websites, etc.), interpret the intent of that data, and then summarize its findings for a human user. An AI agent, for instance, will always read every word of every document in a conveyancing file with 100% focus and attention to detail - something humans struggle to do.

Additionally, as AI ingests more and more context on a file (documents and their contents, as well as data manually entered by a human), it can keep all the relationships between all the details straight at all times. Humans, by contrast, are prone to losing track of context and interrelationships even if they fully comprehend the particular task in front of them.

Given these capabilities, AI is well-positioned to improve the conveyancing process in these ways:

1. Data Entry - Before about 2022, software developers using OCR had to create reams of hard-coded rules to process a single document type and have its data accurately transferred into a system. However, with AI using the latest Large Language Models (LLMs), documents of various kinds can be ingested by the same model and accurately extracted into a digital format. This is good news for conveyancers. It's few people's favorite task to spend hours looking back and forth from a document to a form field and manually typing in every detail. Furthermore, over the course of dozens of documents, the current data entry process almost always creates errors - some merely typos and some disastrous. A human may still be required to verify that details have been entered accurately, but AI can do the typing and prevent a lot of needless errors.
2. Context-Aware Workflow - Today, even highly digitalized conveyancing workflows don't provide much guidance on what steps to take and what steps to skip. This is because the software is not aware of the status of the file. But AI's ability to remember context can enable conveyancing workflows to adapt dynamically in real time as new information is added. This capability, of course, requires that the AI model be trained not only on conveyancing documents but also on the relationships between those documents and the steps used in between. This is one of the most interesting and powerful avenues for using AI in conveyancing. As the model learns more about the entire context of the file, it can provide more detailed and timely guidance to the paralegal or lawyer.
3. Enriched Communication - If AI has access to a file's data and documents, it can enrich communication with the file's constituents (clients, opposing firms, etc.) without the paralegal digging for documents and details. Good, thorough communication is crucial for a well-run process, and currently, it requires the conveyancer to assemble all the relevant details for all the relevant people. As AI's ability to learn a file's current status grows, it can ease the burden of communication.
4. Error Checking and Flagging - Even the best-motivated and detail-oriented people tend to skim documents - especially the types of documents they've seen before. Once you've seen a hundred estoppels and a thousand CPS, you've seen them all...until the 1001st contract throws you a curveball on page 24 in a section you wouldn't expect it. But AI never gets tired, bored, or distracted. It maintains the same level of minute attention to detail as it reviews every punctuation mark and phrase on every page of every document. Not only that, but a well-trained model can detect when something isn't where it should be or as it should be and flag it for a human to review. In some cases, it can even predict and suggest what needs to be done to address the issue. While this doesn't mean paralegals can now afford to be sloppy, it does give conveyancers a potent set of tools to counterbalance natural human weaknesses.

With all of these capabilities, it should be noted that the user experience for the paralegal or lawyer managing the conveyancing file will not just involve chatting with an AI bot. The capabilities of the AI model will be embedded within familiar user interface conventions. What the human user will notice is that the whole system will seem more aware of the user's intent and of the purpose of the task in question. AI-enabled systems will seem to know what else needs to be done for a condo purchase, whether a registration is likely to be permitted, and who needs to review a particular contract term.

These capabilities will (over time) change the conveyancing process dramatically. It'll be less about wrangling paperwork and more about establishing a flow and intent that the AI model facilitates and addressing issues that the AI surfaces.

But what won't change? Are there aspects of the conveyancing process which will stay the same even as AI advances?

 

The Legal Speed Limit for AI

Over time, AI will enable conveyancers to manage more files in less time with fewer errors by guiding human users through each step of the workflow - giving them nearly magical awareness of a file's context and superhuman attention to detail.

But even after this change has swept across real estate law, there's still a lot AI can't do for conveyancers - or can't do yet - either because of current Law Society rules or technical limitations.

For instance, it will be no surprise to those who work in a conveyancing office that the paralegals do much of the work required to complete a closing. However, the lawyer is the one licensed to conduct the transfer of title, witness signatures, agree to undertakings, hold funds in trust, and give legal advice. Because of this, it is the lawyer who is liable should something go awry. Similarly, while AI can handle many tasks within conveyancing, an AI is unable to assume legally-binding responsibility at the various inflection points within a real estate transaction where it is required.

It is possible that in the future, some of this legal responsibility and liability might be transferred to AI, just as appears to be happening with driverless taxis. However, for the time being, human lawyers are still 100% responsible for every detail of a conveyancing file, regardless of how much help they receive from administrative assistants, paralegals, and AI.

 

Real Property in the Real World

The "real" in real estate imposes some natural limits on the use of AI. Perhaps one day, through the use of robots and drones, even Real Property Reports (RPRs) will be accomplished with the push of a button. Home inspections and property disclosures might be accomplished through 3D imaging and deep scans of a home's building materials. The exchange of keys may soon be accompanied by the whirr of tiny rotors.

But not yet.

For now and in the foreseeable future, people will be required at key points in the transaction to accomplish real physical tasks.

 

More Human Lawyers

Beyond the legal limits imposed by current law society rules and the limitations imposed by physical reality, the technical limitations of AI in conveyancing are harder to predict. Over time, the quality of the models and their access to information will improve. These improvements will enable conveyancing systems using AI to automate more and more of what currently requires tedious human effort.

But remember that real estate law is, at its core, the process of moving humans, not just moving files. The buyer and seller are making one of their lives most significant and most consequential transactions amid clouds of uncertainty.

What will it mean for the elderly couple to sell the old homestead? What will it mean for the young family to move into a new neighbourhood in a new city? How will first-time home buyers be able to sleep at night with a huge financial obligation hanging over their heads? Are we ok with the neighbours having an easement across our land?

These questions, and hundreds more related to the legal process of conveyancing, can't be answered by an AI, and most people wouldn't want an AI-generated answer even if it were offered.

But in an oblique way, AI can help with these answers, not by answering them directly, but by freeing up lawyers' and paralegals' time from the manual tasks which currently consume the majority of their attention. If a lawyer has time and focus to spend with their clients and really understand their concerns, worries, and needs, then not only can they provide better guidance during the transaction but they can guide other aspects of the client's legal lives as well.

AI can be helpful, but it can't replicate the personal touch. Relationships and empathy matter, and that’s what (even today) sets excellent law firms apart—positive client experiences.

 

The Risks of AI run Amok

AI can bring positive change to the conveyancing process and has the potential to improve the relationship between clients and real estate lawyers.

However, utilizing any technology as advanced as AI brings risks as well. What might those risks be, and who is responsible for mitigating them?

As we've all experienced, AI sometimes hallucinates an answer to our question even if it doesn't know the answer. If we're asking it for restaurant recommendations for a corporate gathering in Calgary, then such hallucination might not cause harm, but the stakes are much higher when we're trying to close a real estate transaction.

Even if AI isn't hallucinating, one of the obvious risks of AI in conveyancing is that it will misinterpret a critical clause but do so confidently - in a way that convinces the human user to take the wrong action. If you blindly trust AI's summary without reading the details yourself, you could end up agreeing to something significant without realizing it.

The responsibility to mitigate this risk is shared by software vendors like Jora and the lawyers and paralegals managing the file.

Just wrapping existing conveyancing software with a ChatGPT integration without deeply considering context and workflow and keeping up to date with authoritative data sources is likely to do more harm than good. AI will provide answers...but those answers may be based on outdated or erroneous information.

Additionally, even where AI is integrated into the conveyancing process in a well-considered manner, it's important (especially in the early stages of AI adoption) to have a human in the loop to check AI's work at each critical juncture. Humans need to verify all the details in the conveyancing process to be able to take responsibility for the outcome.

 

The Road Ahead

The promise and limits of AI in real estate law will only come into complete focus over the next months and years.

Some aspects of conveyancing may never change - maybe getting a clean title will always take forever - but many, many others will change dramatically.

The good news for conveyancing firms is that AI is almost sure to reduce the burden of tedious administrative tasks, which today constitute the bulk of the time required to close a real estate transaction. Where the road leads thereafter has many twists and turns, but eliminating work no one likes doing is a good first step.