Generative AI could radically alter the practice of law

That is the wrong lesson. Blaming AI for Mr Schwartz’s error-filled brief makes no more sense than blaming the printing press for mistakes in a typed one. In both cases, fault lies with the lawyer who failed to check the motion before filing it, not the tool that helped produce it. For that is what AI is: neither a fad nor an apocalypse, but a tool in its infancy. And one that could radically change how lawyers work and law firms make money. The legal profession is hardly the only field about which one could say that. But few combine as clear a use case with so high a risk. Firms that get it right stand to reap rewards. Laggards risk going the way of typesetters.

According to Goldman Sachs, a bank, 44% of legal tasks could be performed by AI, more than any occupation surveyed except for clerical and administrative support. Lawyers spend an awful lot of time scrutinising tedious documents—the sort of thing AI has already shown it does well. Lawyers use AI for a variety of tasks, including due diligence, research and data analytics. These applications have largely relied on “extractive” AI, which, as the name suggests, extracts information from a text, answering specific questions about its contents.

“Generative” AIs such as ChatGPT are far more powerful. Part of that power can be used to improve legal research and document review. As Pablo Arredondo, creator of a generative-AI “legal assistant” called CoCounsel explains, using it “removes the tyranny of the keyword…It can tell that ‘We reverse Jenkins’ [a fictional legal case] and ‘We regretfully consign Jenkins to the dustbin of history’ are the same thing.” Allen & Overy, a large firm based in London, has integrated a legal AI tool called Harvey into its practice, using it for contract analysis, due diligence and litigation prep.

Not all lawyers are convinced. One recent survey found that 82% of them believe generative AI can be used for legal work but just 51% thought it should. Many worry about “hallucinations” (as AI boffins refer to chatbots’ tendency to present falsehoods with aplomb, as in Mr Schwartz’s case) and about inadvertently feeding information subject to attorney-client privilege into algorithms. Yet if these challenges can be tackled—and they can, with better technology and careful humans in the loop—then the misgivings of the doubting 49% may pass. After news of Mr Schwartz’s debacle broke, for example, a federal judge in Texas told attorneys appearing before him to file a certificate attesting they did not use generative AI or checked the final result before filing anything. Much as it made little sense for lawyers to insist on doing legal research in libraries once the vastly larger and more easily searched databases of Westlaw and LexisNexis were a click away, when a critical mass of firms embraces generative AI, more will follow.

AI has the potential to transform the legal profession in three big ways. First, it could reduce big firms’ manpower advantage. In large, complex lawsuits, these firms tell dozens of associates to read millions of pages of documents looking for answers to senior lawyers’ questions and hunches. Now a single lawyer or small firm will be able to upload these documents into a litigation-prep AI and begin querying them. As Lawrence Lessig of Harvard Law School notes, “You can be a smaller, leaner specialised firm and have the capacity to process these sorts of cases.”

Second, AI could change how firms make money. Richard Susskind, technology adviser to the Lord Chief Justice of England, argues that firms profit by “having armies of young lawyers to whom they pay less than they charge clients”. If AI can do the work of those armies in seconds, firms will need to change their billing practices. Some may move to charging flat fees based on the service provided, rather than for the amount of time spent providing it. Stephen Wu of Silicon Valley Law Group speculates that firms may charge “a technology fee”, so that “clients don’t expect to get generative AI for nothing”.

Third, AI could change how many lawyers exist and where they work. Eventually, Mr Lessig argues, it is hard to see how AI “doesn’t dramatically reduce the number of lawyers the world needs”. If AI can do in 20 seconds a task that would have taken a dozen associates 50 hours each, then why would big firms continue hiring dozens of associates? A veteran partner at a prestigious corporate-law firm in New York expects the ratio of associates to partners to decline from today’s average of perhaps seven to one at the top firms closer to parity. If associates aren’t worried about their jobs, he says, “they should be”.

That may not happen for a while, though. And in the near term, AI could make legal services cheaper, particularly for small and medium-sized businesses that currently struggle to afford them. Ambitious law-school graduates may find AI provides an easier path to starting a solo practice. If so, then AI could lead to an increase in the overall number of lawyers in the near term, as well as changing the sort of work they do—just as the ATM led to an increase in the number of human bank tellers rather than their replacement.

Ultimately this will be good news for clients. “People who go to lawyers don’t want lawyers: they want resolutions to their problems or the avoidance of problems altogether,” explains Mr Susskind. If AI can provide those outcomes then people will use AI. Many people already use software to do their taxes rather than rely on professionals; “Very few of them are complaining about the lack of social interaction with their tax advisers.”

© 2023, The Economist Newspaper Limited. All rights reserved. From The Economist, published under licence. The original content can be found on www.economist.com

Updated: 07 Jun 2023, 03:01 PM IST

Originally appeared on: TheSpuzz

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