E-discovery has already gone through an impressive cost deflation with the application of more sophisticated scanning, OCR, and search algorithms that recently (in the past decade) came onto the market. I've seen more than a few law firms that developed an over-dependency upon discovery-related fees in their business model either drastically downsize, abruptly change, or in one case shutter their doors entirely (after a painful circling the drain).

If deep learning technology like Watson deflates further the remaining e-discovery market as well as the initial case research billables, it will be interesting to watch how law firms adjust their business models. For those that can stand out with consistently innovative, novel and creative legal services delivery (like nearly always coming up with newly-accepted interpretations of case law) that depends upon people, I could easily see rates for those attorneys go dramatically up, partly to backfill the revenue gap that is created in the wake of automation of these aspects of legal services business models, partly due to an exacerbation of the bifurcation effect automation seems to have upon labor markets.