The Impact of Generative AI on the Future of the Legal Profession

Dr. Michal Carmi -

Lahav Executive Education, Recanati, Tel-Aviv University -

June 19, 2023

Some Takeaways from a Comprehensive Lecture on the Multifaceted Impact of Generative AI on the Legal Sphere. Below are some of the topics covered in the lecture, with particular reference to the future evolution of the legal profession.

The transformation of generative artificial intelligence will lead to the following effects on the legal milieu:

Structure and Interfaces

1.???? Increasing global data intensity:

Human lawyers will have difficulty keeping up with both the scope and the complexity of the information.

2.???? Integration and Interfacing with the Broader Generative AI Ecosystem:

Generative AI is increasingly being embedded across various market systems and platforms. The firm's legal AI solutions will need to interact with this expansive ecosystem, which includes corporations, financial institutions, insurance companies, and other entities incorporating learning and generative intelligence. For example, Zurich Insurance employs a customized version of ChatGPT to simplify lengthy claim documents.

3.???? The "Agent's Death" Process:

Public Access to Legal Information and Tools - This process, where legal information and tools will be made, to a certain extent, more accessible to the public, signifies a shift away from the exclusivity traditionally held by legal agencies. This trend mirrors changes in other sectors such as travel agencies, real estate brokers, and recruitment firms, which once held exclusive and distinct expertise, but faced competition from online platforms, individuals, and websites, performing such activities online. Similarly and additionally, the legal services market is poised to evolve beyond the traditional law firm model, to include more variants than just the old way, and will diversify with a wider variety of professions and service models.

4.???? Democratization and Discrimination of Access to Legal Services:

Accessible, affordable, high-quality legal representation can promote greater equality and fairness, ensuring justice for all. Conversely, it also raises concerns about potential disparities that might arise between firms utilizing expensive, advanced legal technology and those that do not.

5.???? Virtual Lawyers:

One of the formats that will emerge in the markets will be virtual law firms, where all activities are conducted online, including through dedicated platforms. Law offices may also operate in a hybrid manner, offering the public access to their generative AI platforms for a fee, or providing their clients with the means for direct communication with digital legal assistants.

6.???? A Paradigm Shift in Lawyers' Roles and their Branding Perception:

Over time, changes might be noticed in the conduct, branding, and dynamics of lawyers, moving in various professional directions, with a growing focus on becoming strategic partners who lead business clients and are more involved in business and financial activities. Additionally, more lawyers are likely to become internet celebrities due to their access to time-saving, easily accessible, well-analyzed, and succinct knowledge on various issues.

7.???? Change in the Professional Mix within Law Firms:

The legal landscape is witnessing early signs of a change in the professional makeup of law firms. Today, we are seeing the emergence of roles such as Legal Operations Managers, Legal Technologists, Legal Data Scientists, and Legal Innovation Managers. While some argue that repetitive tasks will be negatively impacted by automation and the shift towards generative AI, I Would argue that, paradoxically, there is also potential for roles like paralegals to gain prominence. This is due to their lower cost and their access to AI-driven tools that can provide them with in-depth legal knowledge and analysis.

Additionally, as of now (June 2023) some U.S. states have modified their ethical rules for alternative legal service providers (ALSPs), allowing for the formation of firms that include non-lawyer professionals.

8.???? Change in the Market Stratification of Law Firms - Distributed Power Model:

The accessibility of the generative technological might is poised to disrupt the traditional power dynamics within the legal milieu. The current model, where lawyers with direct access to resources and support systems have a distinct advantage, is shifting away from centralization. This distributed power model will empower peripheral lawyers, those who may not have traditionally enjoyed such benefits, to gain prominence and recognition.

9.???? Transforming Client-Lawyer Communication: A Personalized, Technology-Driven Approach:

The rise of generative AI (Gen AI) will reshape how clients consume legal services, offering both benefits and potential challenges. Customized services, technological interfaces, and legal chatbots that communicate with clients will enhance the timeliness and quality of outputs. This efficient, cost-effective, and immediate technology is expected to boost client satisfaction and foster stronger, more trusting relationships. However, this technology-oriented interaction also has the potential to lead to alienation.

10.? Changes in Academia and Apprenticeship Models:

The evolving legal landscape necessitates a corresponding transformation in legal education and mentorship models. This transformation will encompass curriculum adaptations and a shift towards AI-powered mentorship simulations. Law firm training will increasingly incorporate machine learning and simulation. Generative AI can be used to create a virtual mentor with the identity and expertise of a well-known and leading legislator in the intern's field of specialization. This sophisticated method will provide young lawyers with an opportunity for substantial learning and exposure to the complexities of the legal profession at an earlier stage in their careers.

11.? Shifting the Pricing Model: Efficiency Meets Value:

The legal industry is poised for a significant transformation in its pricing model, driven by the efficiency gains brought about by generative AI (Gen AI) technology. The introduction of this technology will lead to reduced process times and shorter turnaround times for legal services.

This, in turn, will naturally prompt a shift away from traditional hourly billing and towards value-based pricing models. Consequently, for some legal services, these reduced turnaround times will naturally prompt a shift away from traditional hourly billing to a more value-based pricing model. This transformation will allow for pricing strategies to be based on specific issues, projects, or services, reflecting the efficiency and cost-effectiveness of shorter execution times.

12.? Insurance Implications (Professional Risk) – Addressing the Liability of Generative AI in Legal Services:

As generative AI (Gen AI) increasingly integrates into legal services, significant insurance considerations arise, particularly regarding professional liability. As Gen AI becomes an integral part of legal workflows, functioning as a virtual partner or employee, it is crucial for the firm to establish appropriate insurance coverage to mitigate potential risks. Given that generative AI is inherently prone to errors, it is necessary to construct appropriate insurance coverage to address these risks. Mistakes made by Gen AI could lead to financial losses, reputational damage, or even legal consequences for the law firm or client.

Essence and Content

1.???? Moving beyond the technical and into the strategic realm:

generative efficiency will drive both efficiency and quality. The gains in productivity, cost reductions, and time savings will be redirected towards strategic thinking, advisory services, focusing on higher-value work, strategic considerations, and brand growth (e.g., the contract review process has undergone a fundamental shift. The review itself is not the objective, but rather the starting point for a lawyer's interpretation and explanation of the contract's content).

2.???? Professional Evolution:

A substantial leap in high-order legal skills, stemming from exposure to the vast corpus of knowledge provided by generative AI, enabling a focus on intricate legal issues.

3.???? Cultivating high technological literacy and proficient communication skills for interacting with generative artificial intelligence:

Laying the foundation for seamless collaboration in AI-powered dynamics.

?

4.???? The evolution of various legal domains, such as property and intellectual property, towards a virtual orientation will impact legal practice:?

The shift towards a blockchain-driven economic paradigm (featuring automatic smart contracts, digitally represented products and transactions, etc.) will render obsolete a substantial layer of current legal work related to property infringements.

5.???? Broadening expertise and the ability to synthesize legal opinions and research with other fields, such as economics and insurance.

6.???? Globalization and Cross-Border Legal Practice:

Enhanced accessibility to data and intelligent, in-depth analysis of international law, treaties, and foreign legal systems will expand service offerings and support global activity, bolstering this opportunity in an era where connectivity and remote work patterns have become the norm. This comes, however, with regulatory challenges.

7.???? The uniqueness of Human Lawyers: compared to legal generative AI, lies in their inherently far more meticulous attention to social subtleties, human behavior, and nuances. Meaning, this goes beyond just relying on the learned data from past experiences but rather involves, as well, unique discernments for the different cases. Human lawyers utilize intuition, human creativity, and out-of-the-box thinking to develop new perspectives and viewpoints, demonstrate skepticism, raise doubts, and critically analyze arguments.

For now, humans are still more adept and capable at understanding the unique aspects of each case and the people involved, fostering familiarity, and building close, trusted relationships with clients.

Moreover, new opportunities will arise for human lawyers, with new expertise, tasks, and roles. The future surge in legislation due to upcoming exponential technological changes will result in the creation of specialized legal niches and the emergence of new legal specializations.