Law Firms Embrace Generative AI with Caution and Innovation

As the legal world evolves, a significant number of law firms are exploring or planning to incorporate generative artificial intelligence (AI) into their workflow. The primary drive behind this trend is the anticipation of reduced operating costs and heightened productivity. Generative AI, known for its ability to craft human-like text and other content, could automate mundane legal tasks, such as scrutinizing and generating contracts and churning out preliminary legal advisement.

Integration and Experimentation

Australian outfit Gilbert + Tobin has deployed a generative AI feature designed to answer questions, equipping lawyers with a wide-ranging expertise on multiple legal subjects, particularly contract guidance. To further inspire their legal team's engagement with AI, the firm initiated a challenge last year with a reward of A$20,000 for innovative AI-application ideas. More than 100 uses were proposed, indicating a widespread interest among the law professionals.

The Challenges Ahead

Despite the enthusiasm surrounding AI technology, law firms remain cautious, acknowledging potential pitfalls, like AI 'hallucinations' which can lead to generating fictitious facts. Such incidents have resulted in some lawyers mistakenly using faulty AI-generated content in court documents. To mitigate these risks, firms like Gilbert + Tobin have established 'guardrails' to safeguard client data and ensure AI interacts only with firm-approved information.

Next-Generation Tools and Safeguards

MinterEllison has engineered a generative AI program capable of delivering a draft of legal advice swiftly, achieving about 80 percent accuracy, by leaning on past cases and other legal resources. Firm-wide rollout is planned, with the aspiration that in a year, 80 percent of the staff will utilize this efficient system.

To uphold accuracy, MinterEllison's tool demonstrates the sources it references, and senior lawyers review its output before it reaches any client. This ensures that the information fed into the AI is up-to-date and relevant, an important prerequisite for the AI's effectiveness.

AI Impact on Business Models and Strategy

Some firms are considering strategies to commercialize their AI solutions by offering them to in-house legal departments, aiming to generate new revenue streams and enhance service efficiency. A notable example is the AI contract negotiation tool ContractMatrix, devised by A&O Shearman. The tool speeds up contract drafting processes substantially, signaling a shift in how legal practices may operate in the future.

The Global Perspective

On an international level, quality contrasts among generative AI tools can be significant. For instance, in China, legal firms like JunHe find the domestic AI software to be less adept at drafting legal documents, though it's somewhat effective in research, analysis, and language translation tasks.

Despite hurdles, including regulatory challenges and concerns about the dependability of generative AI, the legal industry largely sees the technology as an essential part of its future. Firms understand that while there are immense opportunities, there's also a risk of falling behind if they don't adapt.

law, technology, innovation