Artificial intelligence is everywhere these days, affecting the way that industries around the world operate. And the legal field is no different.
In fact, AI for lawyers is already impacting how law firms do business. It has reshaped various aspects of legal practice with increased efficiency, improved workflows, and the ability to serve clients better.
However, despite the increasing opportunities to use AI and leverage the technology’s benefits, the legal field largely remains hesitant about adopting AI tools. In Embroker’s 2024 survey of more than 200 lawyers, we found that 78% of law firms aren’t using AI, with many citing hesitancies like data privacy, misuse or unintended consequences, and security vulnerabilities.
While AI isn’t guaranteed risk-free, like with any technology, one of the biggest risks for law firms is not adopting AI. Firms that resist adopting AI risk falling behind in the increasingly competitive legal field, potentially losing clients to firms that have embraced AI, while also likely facing increased inefficiencies and difficulty attracting and retaining talent.
Even judges at a recent American Bar Association (ABA) panel urged lawyers to embrace AI, noting that “it’s a must-do to survive in law.”
Why are some law firms hesitant to use AI?
It’s no secret that though AI has plenty of benefits, it’s not perfect.
While many acknowledge that AI is forever changing the legal industry, numerous law firms are still apprehensive about adopting AI. Let’s take a closer look at some of the reasons for law firms’ AI hesitation below.
Ethical considerations: Bias
Ethical considerations for lawyers using AI — such as the potential for bias — are commonly cited as an issue fueling lawyers’ AI skepticism.
In the survey we mentioned above, Embroker found that 42% of lawyers say legal and ethical issues due to AI misuse or unintended consequences are a reason for their hesitation about AI. And that’s not a misplaced concern. As AI uses data stemming from humans, who may have their own biases, AI tools have an inherent potential to intensify societal biases.
The Correctional Offender Management Profiling for Alternative Sanctions (COMPAS), an algorithm some U.S. courts use to assess a defendant’s likelihood of reoffending, has often been highlighted as an example of tech bias in criminal justice. A past study revealed that the software’s algorithm reinforced racist stereotypes, with Black defendants more likely to be misclassified as being at a higher risk for reoffending compared to white defendants.
AI biases can also affect hiring practices, resulting in law firms losing out on recruiting new talented individuals, which, given the ongoing talent shortage in the legal industry, could have a significant impact.
Ethical considerations: Data privacy
With a massive amount of sensitive information on every lawyer’s hard drive, data privacy is a fundamental issue for all law firms, regardless of their size and field of practice. So, it’s no surprise that 41% of lawyers surveyed for our Legal Risk Index noted concerns about data privacy as a reason for hesitating to use AI tools.
Every lawyer has a duty to protect client confidentiality, so firms must always keep data security top of mind and be cautious about what data they provide to AI platforms.
Accuracy of information
There has been no shortage of news in recent years about lawyers being reprimanded for submitting briefs created by AI that contain fabricated content, also known as hallucinations. AI hallucinations are when AI systems generate false or misleading outputs.
For example, two lawyers were sanctioned in 2023 by a New York federal judge for submitting a brief written by ChatGPT that included several nonexistent court opinions and fake quotes. In instances like this, the lawyers, not the tool, are to blame for the inaccurate information.
It’s important to remember that AI tools can help automate tasks, but they cannot replace human judgment, and any AI-produced results should always be vetted for accuracy.
Knowledge gap
The unknown can be intimidating and confusing, creating a barrier to embrace change. And the legal profession is well-known for being resistant to change, particularly when it comes to technology.
Even when acknowledging the benefits of AI for lawyers, many firms lack an understanding of how to integrate these tools properly due to unfamiliarity or skepticism. While most lawyers are using some form of legal tech tools, AI use isn’t quite there yet.
Lawyers don’t need to become tech wizards, but being aware of how AI works is crucial for using AI tools responsibly and effectively. By not remedying an AI knowledge gap, law firms could miss out on new opportunities, leaving them at a competitive disadvantage.
Cybersecurity
This one won’t come as a surprise. Cybercriminals are drawn to a law firm’s data like ants to a picnic. Any business is at risk of a cyberattack, but cybercriminals target law firms in particular for their large cache of confidential data. (This is also why cyber insurance is vital for law firms.) What’s more, while industries worldwide are reaping the benefits of AI, so too are malicious actors like hackers. Cybercriminals have jumped on the AI train to deploy more sophisticated and tailored phishing attacks, which has made some wary of the technology.
How AI can benefit law firms
As with anything, there are pros and cons associated with AI use. As already noted, law firms must consider ethical issues when using AI. Given the well-documented hallucinations that AI can produce and the fact that tools like ChatGPT don’t provide information sources, some lawyers may find it a burden to review and appropriately cite the material produced by AI.
That said, AI’s benefits far outweigh its downfalls. It all comes down to a bit of responsible oversight.
Some of the key benefits that AI can offer law firms include:
Increased efficiency
Freeing up time is hands down, without question, the top advantage that AI tools offer law firms. Automating repetitive and time-consuming but essential tasks is a significant perk for law firms, as AI systems can quickly scour through tons of data to provide research, analysis, or summarization, or even draft standard contracts.
A prime example of AI’s time-saving advantages is an in-house AI program that JP Morgan Chase introduced a few years ago. The program, known as COIN, completed in just a few seconds what previously took lawyers and loan officers 360,000 hours of work each year.
With more time freed up thanks to AI tools, lawyers can focus on higher-value work like client needs, more complex litigation analysis, and growing their practice. In short, time savings from AI mean increased efficiency and productivity for lawyers.
Cost savings and improving access to justice
One notable advantage of AI helping to save time with legal work is reducing costs for clients. If a task typically takes 40 hours to complete manually and can be done in three hours with AI, that time difference can translate into cost savings for clients. As a result, that has the potential to help reduce barriers to justice for those with limited financial resources.
It’s also worth noting that since AI’s potential to streamline various tasks, including casework, is so well-documented, many clients are beginning to push back against traditional billing practices and expect law firms to pass along cost savings gained through increased efficiency with AI tools.
Higher-quality work
Even the most diligent lawyers make mistakes from time to time. Though AI is certainly not error-proof, it can significantly help improve the quality of documents produced by law firms. In fact, a new study by researchers at the University of Minnesota and the University of Michigan found that AI tools can improve a legal professional’s quality of work by upwards of 28%.
AI-powered document comparison tools can help ensure consistency of language and terminology (which is particularly helpful if many people have been involved in drafting and editing a document), verify that documents follow in-house style guides, and identify missing clauses or undefined terms.
Client relationships
Time and cost savings are just the tip of the iceberg in terms of how AI tools can augment lawyers’ relationships with their clients.
Leveraging legal AI systems to analyze past interactions with clients, their opinions, and their behavior means that law firms can provide clients with a more personalized and positive experience. That, in turn, can be a significant competitive advantage and help a firm grow its client base. AI-powered tools can also provide insights into potential case outcomes, assisting lawyers with setting realistic goals and objectives with their clients.
Reduced stress and burnout
As we have already touched on, there is no shortage of time-consuming and monotonous tasks in the legal field. But this work, though perhaps sometimes dull, is instrumental to fair and proper legal representation.
Having AI systems complete at least some of the repetitive tasks that lawyers perform daily can help reduce stress and potential burnout, which is unfortunately common in the legal industry. Plus, creating a more positive working environment can help your law firm recruit talented individuals and avoid potential workplace-related lawsuits.
Avoiding malpractice claims
Sounds crazy, right? But what if we told you that some experts think it’s possible that in the future a law firm could face a legal malpractice claim for not using AI for lawyers? After all, Comment 8 of the ABA’s Model Rule 1.1 notes that “a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.”
That underscores what we mentioned earlier: Not implementing AI tools could be risky for law firms.
Practical uses for AI at law firms
Now that we’ve highlighted the benefits of AI for lawyers, you might be wondering the ways your firm can use it. Because who doesn’t like the idea of improving productivity, reducing administrative burdens, and delivering better service to clients?
The following are a few of the ways that law firms can use AI:
1. Research
Research is integral to legal work, but finding the right information to support a particular case can take a lot of time. Fortunately, AI makes research more efficient and faster. Legal AI tools enable lawyers to quickly search databases for pertinent statutes, regulations, case laws, and more.
As noted earlier, generative AI has become notorious for creating hallucinations. That’s why platforms designed specifically for use by legal professionals are the safest bet, as they use reliable and verifiable legal data sources.
2. E-discovery
A common way that AI is used in law is with e-discovery, the process of scanning electronic information to find evidence that could be used in a legal proceeding.
With e-discovery platforms, lawyers can scan records using specific search terms or parameters, significantly reducing the time it would take to manually sort through a plethora of documents.
3. Document automation
Every law firm knows how vital contracts and other agreements are. But they can also take a lot of time to draft. Fortunately, AI tools for document automation enable lawyers to create contracts and other legal documents based on pre-set templates and parameters.
AI software can quickly scan contracts and other legal documents to identify missing clauses or outdated language, streamlining the document review process and reducing the risk of human error. But that doesn’t guarantee a document will be completely free of errors, so always take care to review documents before the final sign-off.
4. Due diligence
As part of the due diligence process, especially when dealing with mergers and acquisitions, lawyers have to review a massive amount of data, often with strict deadlines.
AI-powered due diligence solutions add efficiency to the process of detecting potential legal liabilities, compliance issues, intellectual property concerns, and inconsistencies with financial information — all of which can be extremely time-consuming when done manually. Once again, it’s important to remember that AI tools can help automate tasks but cannot replace human judgment.
5. Predictive analytics
What if you could accurately “forecast” a case outcome? With AI, it’s possible. Predictive analytics enable lawyers to gain more insight into potential outcomes based on past rulings, judicial decisions, and even jury behavior, enabling law firms to create stronger litigation strategies based on proven and historical data.
How to introduce AI at your law firm
Proactive planning is the key to successfully introducing AI tools at your law firm. Start by assessing your firm’s needs and identify where AI can provide the most benefit. It’s also necessary to evaluate AI tools carefully to determine that they meet data security and compliance requirements. Because you don’t want your clients’ confidential information to end up in the hands of a third party, always read terms and conditions before implementing any AI software.
It’s also critical to introduce AI gradually. Rather than rushing to introduce as many AI tools as possible all at once, having a strategic and methodical approach to implementing AI will lead to a smoother onboarding and less potential for disruption. Establishing clear guidelines and protocols for AI use, particularly with data privacy and ethics, is crucial to mitigate risks.
And finally, don’t forget about training, which will help demystify AI and ensure that everyone at the firm is using it as they should.
Unlocking new opportunities with AI for lawyers
While it’s understandable that many law firms have been apprehensive about AI, there’s no denying that AI tools are forever changing the legal field.
What’s more, though there has long been some trepidation that AI will replace lawyers, the more accurate assessment is that lawyers using AI will replace those who don’t use it. Rather than eliminating jobs in the legal sector, AI can transform (and improve) how lawyers work by enhancing both efficiency and client service.
By overcoming initial hesitations, law firms can unlock new opportunities and set themselves up for long-term success in an increasingly digital world.
For more insights from our law survey, be sure to check out Embroker’s 2024 Legal Risk Index Report.
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