Will law firms sink or swim with the generative AI?
December 25, 2023
AGI Effects on the Business of Law
It’s been a while since I penned this article for the Deutscher AnwaltSpiegel Going Digital (which was published again in December 2023). Frankly, with all the writing and news in and around AI (and generative artificial intelligence in particular), I wanted to revisit my crystal ball musing from the past.
As I went through the piece, I also ran into an intriguing article on the same subject by Richard Susskind. His argument was somewhat different, though; putting these two side-by-side was an interesting exercise.
Since I started 2023 with an article on AI, I might close it with a similar subject. As always, I am curious about your views on the future; if you want to add your 2cs, let's keep discussing via LinkedIn.
The still of the most beautiful city in the world, cyberpunk style
AI as a toolbox
In the guest post for Going Digital, I reflected on the transformative impact of Artificial Intelligence (AI) Large Language Models (LLMs) on legal services and the broader professional landscape. LLMs provided a tremendous leap from mere RPA, moving beyond the automation of repetitive tasks to becoming an (almost?) indispensable tool for all knowledge workers, particularly in the legal sector.
Naturally, AI's influence on humanity and industry is undisputable; the question is how long those who abstain from AI can compete with the rest. However, I have put AI, including LLMs, into the “tool” drawer. Akin to computers and software in general, AI can offer assistance rather than inherently solve or cause problems.
Simultaneously, I picked a few specific areas within legal services where AI can make a remarkable impact. Administrative tasks, often repetitive, are the natural first target. Examples include writing assistance, data extraction, document classification, and scheduling. The efficiency gains in these areas contribute to optimizing daily operations for legal service professionals.
But how about beyond administration? Indeed, AI can assist knowledge workers, including lawyers. As I highlighted, AI applications encompass document generation, legal research, trend spotting, contract review, and risk assessment.
However, as with any tool, it is essential to understand its application context; AI is far from a one-size-fits-all solution, and each legal service business has its peculiarities.
Back then, I haven’t mentioned any significant downsides. Legal professionals must know how AI works, its benefits, and its risks. Lawyers may have an obligation to inform clients when they plan to use AI, especially in data analysis. They must ensure their use is benevolent and in line with professional standards.
Finally, I concluded that human intellect and creativity will always be essential, particularly in critical areas like the legal sector.
(inb4, the evolution of AI accelerates at a pace that turns us all into ill-conceived Wachowski batteries to fuel its unfathomable mission)
AI helping mankind achieve justice
The main social benefit of AGI
In his recent LinkedIn article, revered Richard Susskind reflected on generative AI’s profound impact on the legal profession and the “frenzy” it has caused within the community. Susskind notes that lawyers have been closely examining the implications on their profession, where, in his view, they should have been asking another question entirely.
Indeed, generative AI can assist with mundane tasks; think about drafting, comparing, and summarizing legal documents.
AGI taking away at least a bit of the day-to-day drudgery of legal tasks is already valuable in its own right. Who would want to avoid getting routine documents and emails done in a fraction of the time? But wait, there’s more -
Susskind notes that lawyers are exploring AGI’s analytical potential in its experimental use, attempting to get it to answer legal questions and complete legal arguments. Caveat emptor, however, tread lightly and all that jazz.
Furthermore, and this, I feel, was the main Susskind’s idea, surrounded by the rest of the article’s text -
“The main social benefit of legal AI will not be in making lawyers more efficient but in empowering people who are not lawyers to handle their legal affairs. Access to justice issues may be cracked by making AI systems available to people directly so they can understand and enforce their legal entitlements for themselves.”
In other words, AGI, Sussking feels, will empower people needing legal services to understand and enforce their rights independently.
Regarding law firms, this is how cookie crumbles, Susskind argues -
AGI will increase the productivity of large law firms in the short term. Eventually, clients will manage to take over most of the work currently given to traditional (BigLaw) law firms.
“Loyalty to conventional legal and court services may erode if AI delivers desired outcomes faster and at a lower cost.”
Susskind argues that the long-term significance of AI in law is not about replacing tasks performed by human lawyers. Instead, he likens it to the future of surgery, where robots don't entirely replace human surgeons but work alongside them. The focus should be on using AI to deliver legal outcomes in new ways (e.g., online dispute resolution, risk prevention, enablement).
Economic recovery after some market turmoil
Biases, compliance, business models
Suskind's article provoked a somewhat polarized discussion on LinkedIn. Some challenged his view that “clients will take over work” with the help of AI as overly simplistic (my interpretation). As long as AGI relies on inputs, often burdened by biases, a senior background in the specific legal domain and critical thinking will remain paramount.
Adding to the point - the compliance trend has only one direction (or at least it did so historically). And nobody in the business is disputing that. We will eventually witness an arms race between AGI capability and compliance complexity. Would that help an average citizen cope with legal issues alone?
And what about business models? Susskind rightfully believes in the AGI’s potential to reduce the need for some of the work traditionally done by law firms. However, this is a static view that doesn't consider the evolving nature of business.
Biglaw often takes flak for being slow to move and not innovating enough (and many examples dispel this notion). However, we should not forget about -
The potential to create new markets - self-serving applications in certain domains haven’t made a dent in law firms’ business. Think Flightright and the likes; it is an exciting niche, mainly because they created an opportunity for everyone to enforce their rights;
(that possibility was always there on paper, but the drudgery and cost of pursuing this endeavor by traditional channels meant barely anyone was even doing it; the alternative legal service providers in this space have created a whole new market, one that hasn’t existed before)
The ingenuity of legal service professionals - again, it is a popular trope that lawyers will keep sitting idly while AGI keeps displacing them (or, worse, eradicating the market). Successful lawyers are not only well-educated and experienced but also intelligent and street-wise.
(most lawyers I know have a fantastic business sense and continually seek ways to evolve their practices. Sure, some might prefer the artisan approach; every market has those that come on top, and some fall behind just the same. Let’s not assume that the business of law will not evolve as the tech advances)
Prevention-loving corporate clients - as legal departments mature, the shift towards compliance risk prevention grows in importance. One day, corporate legal departments will subscribe to external providers' compliance packages (some vendors might be law firms) or use no-code toolkits to develop their apps internally.
(you might argue that either approach would be eating into law firms' lunches; however, these would be the same as the contemporary trend of growing legal talent internally. Continuing the previous point, AGI + no-code will allow law firms to develop their CaaS (Compliance as a Service) pipeline and revenue streams. How law firms react to such potential remains to be seen)
AI powered cyborg considers its options
What does it all mean
Technology accelerated its trajectory at a rate we haven’t seen before. That may be why we are missing a reference point or two and are speculating around doomsday scenarios.
As in any transition, some will manage to get into the front seats, while others will lag. Technology will alleviate some aspects, while compliance might make others more complex. So what else’s new?
Ivan Rasic is the Law Firm Management SMB Director of Engineering and the “Sofia Tech Hub” MD at STP.one. In his off-time, he enjoys classic Sci-Fi literature, dad jokes, and making bread with his bare hands. His DMs are open if you feel like throwing a pun (or discussing a serious matter if that’s your flavor).
Stay in the know
(every morning we go through most relevant articles in the Business of Law)
Subscribe to get your latest know-how (once or twice a month):
Hans Van Heghe was too kind to volunteer his time for a short chat. We discussed Knowliah’s approach to solving information complexity product development and challenges inherent to CLDs. The “JERI,” their forward-looking approach to managing and using information, made a particular impression as, in my humble view [...]
It’s been a while since I penned this article for the Deutscher AnwaltSpiegel Going Digital (which was published again in December 2023). Frankly, with all the writing and news in and around AI (and generative artificial intelligence in particular), I wanted to revisit my crystal ball musing from the past [...]
LegalSifter recently closed an investment round that should propel them to new milestones through funding and synergy effects. Seeing this news, I remembered my first contact with their team (shout-out to Laura Taylor and David Heyman) and this discussion with Marko Porobija, one of their users. It was a [...]