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Commercial Question

The use of AI in law firms

updated on 04 October 2022


What impact will AI have on the legal profession?


Originally published on 4 October 2022. 

The artificial intelligence (AI) trend is no longer a novel concept. It’s now a technology that’s increasingly being embraced by the legal sector. Forward-thinking law firms are already using an array of technological solutions to provide services more efficiently and, in some cases, to mitigate against human error during large-scale legal exercises. Several external factors have served as catalysts in the drive to adopt such solutions, namely a decline of in-office presence.

Like many other businesses, law firms need to innovate to compete with other law firms and legal businesses.

What is meant by AI and how does it work? 

AI automates tasks that typically require human intelligence. It will do so by identifying patterns in data and processing textual information. To achieve this, AI systems require an initial input of large volumes of ‘real’ data from humans for the algorithms that underpin the AI system to be ‘trained’. The AI system will then continue to improve as ongoing use results in additional data and ongoing training of the algorithms.

AI technology can be used in a law firm's overall management and in its practise of the law.

For business management, AI can assist with tasks like predictive billing by analysing historical data and estimating the likely costs of future matters.

As regards litigation, AI is being used to undertake large-scale disclosure or due diligence exercises to identify relevant documents and data. 

AI solutions are now being developed to assess risk and predict outcomes in litigious matters. The predictive technology analyses large amounts of data to find patterns in previous cases to identify potential risks that lawyers can then analyse.

Human interaction and other considerations

AI is unlikely to completely replace the human lawyer. As mentioned, AI technology still requires the initial human input to develop, train calibrate and test the algorithms. More importantly, lawyers will need to oversee and interpret the results and advise on the appropriate courses to take, albeit supported by the AI. Clients will still expect a ‘human touch’ to advise and guide them through the world's increasingly complex legal problems.      The increasing use of AI will, however, mean that the lawyers of the future can focus on the more intricate aspects of legal practice, such as strategy in litigation.

Tasks typically assigned to paralegals and more junior team members can now be carried out by AI. This means that their role can be evolved so they can now focus their time. So, for example, in a disclosure exercise they can focus their efforts and time on reviewing the relevant documents that have been identified by AI technology. With the roles shifting among the varying levels of lawyer expertise, law firms will need to consider how the different groups of lawyers are involved in legal processes that are supported by AI systems. In our view, this will result in a richer more involved experience for junior lawyers as less time will be taken up by process-driven exercises.

Advantages of AI

The use of AI allows law firms to increase their efficiency. Several of the tasks conducted by lawyers fall under ‘non-billable’ work which is often absorbed by the firm and not passed on to clients. The time regained can be spent in better understanding clients' tailored needs and dealing with any other complex matters. This efficiency also enables law firms to scale their businesses more effectively.

From an employer's perspective, the ability for employees (lawyers) to focus more of their time on interesting and challenging matters and less on mundane tasks, will assist with employee satisfaction and retention, and attract a wider pool of talent.

Ultimately, AI technology has been shown to deliver more accurate and consistent results than comparable ‘human-led’ processes, permitting law firms to deliver a more consistent and comprehensive service to clients.  

AI limitations

AI technology solutions are increasingly appearing on the market, but they’re not yet widely adopted. This is likely to be due to the initial costs of adoption (both in terms of the cost of the solution but the investment time of lawyers learning how to use the technology). The slow adoption may also be down to a lack of expertise within both the legal teams and IT teams at law firms. Lawyers will need to be specifically allocated to oversee implementation and the ongoing requirement to ‘train’ the AI technology and this may prove onerous for some firms. The initial time investment and overall buy-in from the law firm is often difficult to obtain when the benefits aren’t instant.

However, any initial reservations should be balanced against the advantages that we’ve set out. 

Looking ahead

AI adoption in the legal sector will accelerate. Practitioners will have to consider how and where AI can be effectively deployed in their area of practice and we predict that in the medium term, AI solutions will be a core part of the ‘toolkit’ that lawyers will use to provide legal services.

Law firms that adopt AI will be in an optimum position to compete in an industry and world where its competitors and clients will also continue to innovate and evolve.

Tatiana Menezes is a second-year trainee currently in her commercial seat at Michelmores LLP.