How Generative AI is Transforming Law Firms Now and in the Future

Artificial Intelligence (commonly known as ‘AI’) by definition is “The theory and development of computer systems able to perform tasks normally requiring human intelligence”. While its roots as an academic discipline can be traced back to Alan Turings’s research in the 1950s, it’s only in the last few years, following the well-publicised birth of easily accessible ‘generative AI’ tools such as ChatGPT and DALL-E, that it has been thrust into the public consciousness. Seemingly out of nowhere, generative AI has become THE hot topic in every sector, with nearly 80% of people believing it will have a ‘high’ or ‘transformational’ impact on their careers.      “How can it be utilised effectively?”“What changes will it lead to?”“What are its drawbacks?”“How is it going to develop further?’” These are just a few of the many questions being asked about generative AI as business leaders across all industries strategise ways of harnessing it to improve productivity, efficiency and quality within their respective sectors.

This is certainly true of the legal sector.

It would be fair to say, when compared with many other industries, the technological transformation of the legal sector has been somewhat limited. In part due to the intricacies of the unstructured data involved in law, and the reliance on expert professionals, many law firms are still using the same processes and methods they have traditionally always used. However, the rise of generative AI tools driven by large language models means this is all going to change. And change quickly.

Generative AI is going to alter the modus operandi in a way that has never been seen before in the legal industry, with an impact unlikely to be matched in many other professional fields. The change will be so profound, it wouldn’t be excessive to predict that the legal sector will be used as ‘Case Study Number 1’ in the future when it comes to explaining how generative AI can be utilised to catalyse significant technological transformation and revolutionise an industry. 

But what is generative AI? How can law firms actually use it? And what does the future look like? In this article we will look to answer these key questions, outlining how it is already transforming law firms now and in the future.

What is Generative AI?

Generative AI is a subset of artificial intelligence that uses ‘deep learning’ algorithms to produce a range of different types of content, including text, imagery, audio and synthetic data. While this in itself isn’t groundbreaking (this technology has been around since the 1960s), it has been the rapid advancement of Large Language Models (LLM) with trillions of parameters, underpinning a chat interface, that was behind generative AI’s meteoric rise in recent years.

In a way never possible before, anyone could now access a generative AI tool and ask it to produce tailored content or answer a particular question. Yes, there were (and still are) teething issues, namely questionable results based on old inaccurate data, but the release of ChatGPT in November 2022 was truly a watershed moment in the history of AI. No doubt you can remember when and how you were first introduced to it!  

While much of the initial hype around generative AI was focused on its novelties, it quickly became apparent that there was an opportunity for it to be utilised and applied within a business environment, especially within the legal sector.

Why Generative AI is Useful for Law Firms

“Generative AI is poised to unleash the next wave of productivity.”

“Generative AI Can Boost Productivity Without Replacing Workers” 

“Applying Generative AI Correctly Can Improve Productivity by 40%” 

Taking a quick look at the commentary surrounding the impact of generative AI it quickly becomes apparent that there is a common theme when its benefits are outlined; the positive impact it can have on ‘productivity’. 

This is a sentiment that can undeniably be applied to the legal sector. For those in the legal profession, generative AI will allow them to automate traditionally time consuming tasks, such as reviewing documents and writing contracts. Not only will this enable law firms to take on more work, the time lawyers will save completing routine tasks will allow them to focus on higher value work.  

But what are examples of appropriate use cases within a law firm?

Last year, Deloitte Legal published the report ‘Generative AI: A guide for corporate legal departments’. In this report they comprehensively and successfully answered this question by looking individually at each of the main capabilities of generative AI. We have summarised the use cases outlined in their report below.

• Content generation - Informed by the data and documents supplied, generative AI can be used to produce legal documents such as contracts, memos, policies, advice, and legal communications.

• Classification and organisation - “Tagging” legal documents and data so that it can be easily accessed within a law firm’s database.

• Summarisation - Putting together a short summary of a long document or collection of texts e.g due diligence reports, legal research, or legislative changes.

• Transformation - Converting content into a new form, format, or style. This could include transforming a document that contains legal language into something more understandable.

• Extraction - Pulling out specific information or data from a given input e.g during legal due diligence, or the comparison of content across a large portfolio of documents. 

• Reasoning - Producing logical analysis given a context or knowledge base e.g regulatory gap analysis where the differences between the two pieces of legislation are assessed. 

• Q&A - answering questions or requests using a text or knowledge base. This could be used for legal self-service requests to answer common questions.

Contained in this report were also a number of examples of generative AI applications within specific legal disciplines. We have also provided a summary of each of these:

• Litigation: Early case assessment and settlement analysis.

• Commercial Contracting: Streamlining negotiation processes.

• Mergers and Acquisitions: Conducting detailed due diligence.

• Competition/Anti-Trust: Assessing merger control regimes and antitrust risks.

• Regulatory Compliance: Comparing legislation and assessing impacts.

• Knowledge Management: Generating updates, briefings, training materials, and interrogating knowledge assets.

• Legal Operations: Automating RFP responses and enhancing objectivity.

When you look at all the functions associated with a law firm, regardless of legal discipline, the potential application opportunities provided by generative AI seem endless. The increased productivity and efficiency it can bring, the time it can save, and opportunities for growth it can facilitate, means it simply HAS to be integrated in the normal workflows of law firms. 

Steven Hinshelwood, CEO of Taylor Emmet, highlights how they as a firm have recognised the need to utilise generative AI and how they are looking to integrate it into their way of working:

What Does the Future Look Like?

Last year, Goldman Sachs estimated that AI could automate up to 44% of legal tasks. 

For many in the legal profession, this is a scary statistic, and taps into the wider societal debate about how far we are willing to go with using AI to replace human input. However, the level of investment in AI by large legal firms over the past decade, and the widely recognised benefits of generative AI, means it is here to stay and will inevitably lead to a seismic change in the way the legal practices function on a day to day basis over the next few years.

While the operational implications of increased automation are self-evident, there are many others who suggest that it could permanently alter the accessibility of legal advice. GPT-4, as an example, has enough knowledge to pass the Bar exam. This means anyone, in an instant, has access to a high level legal advice. This democratisation of legal knowledge will undoubtedly have significant ramifications for the legal market. 

Even though primitive legal-centric generative AI tools do exist, currently many firms are making use of generic Generative AI tools that aren’t specifically tailored for legal use. This will no doubt change and models designed to be used specifically within the legal sector will come onto the market. It’s also likely larger firms will bring out their own in-house generative AI tools. Generative AI is going to continue to improve, and as a result, so will the application opportunities it offers to law firms. 

What is the Conclusion?

We are merely at the start of the generative AI journey. The effect it is already having and will inevitably have on society cannot be understated. Even the new Labour government is publicly developing a strategy for how it can be harnessed. It is going to impact every industry in some way or another, the legal sector included. 

The legal industry will be revolutionised by generative AI as it offers unprecedented automation that will boost productivity and efficiency, and provide a level of access to legal advice never seen before. By embracing this technology, legal professionals can focus on higher-value tasks and improve their work output, ultimately to the benefit of the law firm they work for. 

We are on the precipice of something colossal in the legal sector that will transform how law firms work, forever. 

If you would like to learn more about how generative AI is already transforming law firms and what its impact will be like in the future, register for LegalEx Expo & Conference 2024.