The Future of Generative AI in the Legal Industry
- 3 Mins
Generative AI has taken the world by storm. A third of respondents in McKinsey’s Global Survey “The state of AI in 2023: Generative AI’s breakout year” reported regularly using generative AI for at least one business function. When looking at legal, business, and professional services 41 percent had tried generative AI at least once. Another 36 percent reported they regularly use it for work, personal use, or for both purposes.
These statistics are probably not shocking; what is surprising is how rapidly Generative AI is integrating into the business world – especially the legal industry that is historically slower to adopt new tools. Generative AI’s transformation potential in legal is compelling. It is crucial to understand how legal is already using these tools, while also calling for transparency and to be conscious of ethical responsibilities.
The Current State of AI in Legal
The legal industry has embraced AI for years, as transformative tools and use cases continue to unfold and mature. AI tools are regularly used for document review, settlement evaluation, early case assessment, internal investigations, regulatory compliance, strategy decisions, and more. Seeing the benefits AI can offer has caused legal professionals to pivot and slowly turn an industry known for hesitation into one that embraces innovation. For example, AI tools have capabilities to detect and analyse data quicker and more efficiently. This has allowed lawyers to reallocate their workload, reach better outcomes, and tap into deeper business intelligence.
The rate at which organisations are already investing in generative AI is unprecedented, especially since this technology is still in the early stages and undoubtedly has more evolution in coming years. The ability to answer questions in a conversational manner and produce content based on prompts – in a matter of seconds – has caused mass intrigue. It will be interesting to see how this technology fits into already existing legal transformation initiatives and if the hype persists.
The New Frontier
Legal professionals should consider how generative AI can integrate into their workflows. The most significant short-term opportunities for both legal departments and law firms will likely be improving internal processes. Examples include generating reminders around security and compliance; information summarisation across commercial contracts; incorporating generative AI into existing eDiscovery solutions; template creation; and brief drafting. Industry sentiment reflects this. In the 2023 Wolters Kluwer survey “Generative AI in the Law: Where Could This All Be Headed?” over 80 percent believe generative AI will create transformative efficiencies for research and routine tasks. Only 31 percent believe that AI will transform high-level legal work.
Imagine a lawyer preparing for a deposition. They're sifting through hundreds of emails, memos, and other documents to determine what can be disclosed and what must be kept confidential. Thanks to their organisation's new AI assistant with advanced privilege detection capabilities, the lawyer receives a prioritised list of documents that are likely to be privileged. This allows them to quickly isolate sensitive materials and focus on preparing the deposition questions and strategy.
Today the AI assistant's capabilities extend beyond privilege detection. Amidst the pile of documents is a complex, 50-page contract that could be pivotal for the deposition. Instead of spending hours dissecting it, the lawyer uses the AI assistant's document summarisation feature. Within minutes, the assistant generates a concise one-page summary, highlighting key terms and obligations. This enables the lawyer to grasp the essence of the contract quickly, integrating its crucial points into the deposition strategy.
The AI assistant can also flag any borderline cases for manual review, ensuring that the lawyer doesn't inadvertently waive privilege. This saves time and adds a layer of protection against potential legal pitfalls. By having a tool that can manage and execute routine tasks, the lawyer is left with more time to focus on value-driven work.
The above scenario reflects a day in the life of a legal professional that has successfully integrated generative AI tools into their regular course of business. It may be daunting when thinking where to start. To come up with the best plan, a good resource is talking to provider partners about how generative AI can solve current issues and close process gaps. They have the expertise to consult, implement, and monitor new technology investments.
Remaining Transparent and Ethical
While new AI technology holds great transformative potential, lawyers need to remain intentional when adopting new solutions. It is important to use these tools responsibly, being transparent with clients and upholding ethical duties. Risk analysis and policy creation are critical to fostering safe integration of new tools.
A recent Sedona Conference article by Hon. Xavier Rodriguez proclaimed that “AI is poised to re-shape the legal profession. But AI will require courts, rules committees, and ethics bodies to consider some of the unique challenges that AI presents. It will require lawyers to evaluate whether to use such products, and the risks associated with any use.” In the McKinsey survey, only 21 percent said their organisation has policies around using generative AI for work tasks. The top risk cited was inaccuracy, which only 32 percent of respondents said they were currently mitigating.
Consider the following ethical obligations:
- Competence: Lawyers must keep informed about innovative trending technologies and basic features even if not utilising these tools, so monitoring generative AI updates is necessary.
- Confidentiality: Putting confidential client information into a generative AI tool can open the door to waive privilege and can violate the attorney-client relationship. Also consider the level of security and breach risk present before using a new tool.
- Factual Discrepancies: AI services may create untrue facts or leave out citations, but still appear convincing. This can result in violation of the ethical duty not to make false statements to the tribunal or third parties. Best practice dictates review of the facts to ensure they are accurate before filing with the court or transmitting to opposing counsel.
To remain transparent, notify clients of using generative AI on their cases and have policies in place to lower the risk of violating the above ethical rules. Also review public studies or testing data, talk to colleagues, consult with industry experts, or meet with counsel before making an investment to ensure that preferred AI systems promote transparency.
To utilise these tools responsibly, having a framework for implementation is prudent. More U.S. lawmakers have been pushing for federal regulation to keep up with advancements that are changing the way people work, such as generative AI. While lawmaking can often be a slower process, the rapid adoption of these tools and push for regulation may expediate the process. The Biden Administration also issued an AI executive order on October 30 setting forth requirements for the US government’s use, evaluation, and procurement of this technology. It applies to over twenty federal agencies, but also provides requirements for certain private organisations. The order is comprehensive and includes directives on security, responsible innovation, competition, federal oversight, and much more. The President called out Congress to also act on regulating AI, which adds to the urgency.
It is becoming clear that generative AI is not just a tool but a partner in revolutionising the legal industry. Legal professionals need to stay abreast of pertinent AI developments and consider how to thoughtfully integrate new solutions into their workflows. There will be a learning curve that will change over time as the tools advance, education ensues, and comfort level rises.
The contents of this article are intended to convey general information only and not to provide legal advice or opinions.