The legal profession has been overlooked amid the enthusiasm surrounding AI’s potential to transform healthcare, advertising, logistics, and other industries. In reality, the legal industry is a formidable competitor for the highest return on investment (ROI) from AI implementation.
The majority of law firms have been utilising machine learning (ML) for years despite being perceived as traditional and less enthusiastic about embracing new technology. ML is frequently integrated into the fundamental operations of prominent platforms such as Westlaw.
Generative AI is currently disseminated throughout law firms at a rate that exceeds that of class-action lawsuits regarding stock fraud. Individual attorneys have acquired the ability to utilise AI models similar to ChatGPT, and entire law practices have implemented extensive language models.
AI significantly enhances the efficiency, accuracy, speed, and client outcomes of legal industry workers in their daily operations. Three elements contribute to the explanation of those findings.
AI-driven time and cost reductions are typically substantial in legal operations. The benefits are not incremental.
- AI has the potential to be applied to a wide range of work processes at law firms.
- Once law firms adopt AI technology, its capabilities gradually increase as they tailor it to their needs. Customisation is critical here. Adapting AI to their preferred work methods can significantly increase the return on investment (ROI).
Meet the AI-native law firm
The advantages of AI have resulted in the rise of AI-centric (also known as AI-native) legal firms. This novel kind is notably more efficient and competitive than its competitors. At AI-native organisations, most support personnel and lawyers already use AI extensively for tasks like intake, research, drafting motions and briefs, making objections, analysing judges’ views, and more.
To make a legal practice AI-native, one must customise the behaviour of AI solutions to align with the firm’s current procedures and strategic guidelines. This enhances the capabilities and value of their AI.
Personalisation may manifest in several ways, such as developing case assessments that adhere to a company’s criteria. Artificial intelligence can analyse possible legal claims and generate subsequent actions based on the specific criteria set by an attorney. It may be instructed to adhere to an established procedure, imitate sequences of occurrences, pose or respond to essential enquiries following the same pattern, and compose in the manner of past instances.
When an AI model is taught to imitate the methods used by lawyers, it simplifies tasks for support workers. AI may assist paralegals in many tasks, including preparation, client relations, risk assessment, and strategy, regardless of their experience working with individual attorneys.
Law companies specialising in artificial intelligence (AI) are increasingly using generative AI technology to cater to customers needing personalised attention. Artificial intelligence (AI) has a role in several stages of a legal case, from generating ideas for pre-litigation case strategy to managing the process of gathering evidence. Artificial intelligence (AI) models are also used to assist in the preparation of depositions, assess the outcomes, and develop strategies for litigation.
Why is AI extraordinarily useful to law firms?
It has been asserted that the legal universe is comprised of six-minute increments. AI frequently accomplishes tasks that ordinarily require hours or days for a novice associate in seconds. In the intellect-intensive field of law, time reductions of up to 99% are expected and result in significant cost savings.
Lawyers must draft documents, make decisions, and analyse and consider compromises daily. Paralegals and novice associates must maintain high accuracy and efficiency while also ensuring that they pay attention to all critical information. The work can wear them out, resulting in errors, as they must navigate vast amounts of data and minutiae.
Due to its speed, scope, and personalisation, AI is a significant accelerator in the legal sector, resulting in productivity gains that surpass the “traditional” 10 to 20 per cent.
Costs come down and move around in AI-native law firms
Lawyers observe firsthand how AI systems can reduce the number of associate hours required to conclude a process. By incorporating AI throughout the life cycle of cases, they can enhance the profitability of individual duties. AI enables the team to concentrate billable hours on later, fully-compensated phases, as upfront work on cases is occasionally under-compensated.
Additionally, AI-centric organisations may expand without increasing their support staffing. Alternatively, the current staff can support a more significant number of associates billed at higher hourly rates, thereby boosting profitability.
Additionally, they can market themselves and stimulate development more effectively. AI frees up funds for marketing and business development by reducing operational costs. As with other businesses, generative AI expedites and simplifies marketing communications for law firms.
Employee experience: AI happiness
AI often needs to get the credit it deserves for improving working conditions for employees. In real life, lawyers and paralegals can give AI most of their “grunt work” and tedious jobs that they do repeatedly. This makes people happier at work, so they’ll stay with the company. Support staff and younger partners are in charge of AI.
To make the firm’s AI fit their needs, they can teach an LLM how to do something and then share that information with the whole team. This means lawyers can work in ways they’re used to, but on a bigger scale, and they can give tasks to support staff more easily without giving long details of “how I do this.”
Business models shift for AI-native law firms
Law companies that use AI from the start can take their business to the next level, improving capacity and helping income grow. In particular, they can set up their systems to handle more complex cases and valuable emergency jobs. AI speeds up much of the study and analysis, letting smaller firms take on bigger, more challenging cases.
Regarding contingency lawsuits, AI can boost productivity even more than it does in other areas of law, such as contracts, intellectual property, and family law. AI can do a lot of the initial review of possible outcomes. Taking on well-researched contingency cases can help you make a lot more money.
Those who get AI versus those who don’t
If AI is so good for them, are law firms rushing to become AI-native? Surprisingly, no. A 2023 poll by Thomson Reuters found that 60% of people did not plan to use creative AI. For the other 40%, that’s good news. When it comes to competition, law companies that use AI well are miles ahead of those that don’t.
Law is one of the top fields getting the most out of AI. Law companies that “get it” will keep customising AI systems and pushing them to reach their full potential, which will help them make more money. As law companies with AI have better growth and profits, other fields that use intelligence may follow their lead.
