The Lawyer 2.0: How AI is Reshaping the Legal Profession
Exploring the Intersection of AI and the Legal Industry
Executive Summary
Artificial intelligence (AI) is revolutionizing industries across the board, and the legal field is no exception. While the legal profession is deeply rooted in tradition, it has consistently adapted to technological advancements. This report explores the impact of AI, from chatbots to contract-focused large language models (LLMs), and examines how these innovations are transforming the practice of law and the way future legal professionals will work.
The legal industry is not exempt from the effects of AI
Enhanced Accuracy and Efficiency with AI: Legal professionals can leverage AI to improve accuracy, streamline workflows, and reduce costs. By using AI tools, law firms and chambers can minimize errors, save time, and lower client bills.
Challenges and Risks of AI in Legal Professions: While AI offers benefits, it also poses risks like job redundancies, biases, hallucinations, and security concerns. These challenges could negatively impact legal professionals and their work.
Adapting Lawyer Skillsets in the AI Era: Lawyers should focus on skills that are hard for AI to replicate, such as relationship-building and mastering mediation. These abilities can make legal professionals indispensable despite technological advancements.
Human Role in Adjudication: Adjudication remains a human-centric activity due to the need for discretion and moral judgment. While AI can support judges by assisting in adjudication processes, it cannot fully replace their roles.
AI’s Role in Legal Innovation: Legal professionals recognize AI’s potential to drive innovation and enhance research capabilities. Many believe that AI tools can provide significant support across the legal industry.
AI’s Impact on the Legal Profession
AI has the potential to boost productivity within the legal profession
Accuracy: AI has the capability to minimize errors in legal documents, ranging from basic spell-checking to conducting detailed audits that pinpoint inconsistencies. For instance, a large language model (LLM) can highlight problematic clauses in a contract, enabling users to quickly rectify errors and enhance precision.
Caveat: Despite its strengths, AI is still susceptible to hallucinations, generating incorrect or misleading information. This poses a significant risk in the legal field, where the accuracy of advice and information is critical due to potential legal consequences. Prioritizing the development of reliable, hallucination-free AI systems is essential for the industry.
Ironclad’s AI software flags issues within a contract for a professional to review
Cost-effectiveness: Research by LexisNexis indicates that 40% of law firms and 52% of in-house legal teams anticipate generative AI will help reduce expenses. Thomson Reuters projects this could save up to $100,000 in billable hours per lawyer annually.
Caveat: However, firms must weigh the upfront costs of implementing AI technologies alongside the investment required to train or retrain staff to effectively use these tools.
AI will enhance efficiency across a variety of tasks
Efficiency: AI can significantly reduce the time spent on routine tasks such as document review, drafting follow-up emails, and summarizing meeting notes. Thomson Reuters reports that legal professionals expect AI to save them up to four hours per week within the next year.
Shifting Focus: Most professionals interviewed for a Thomson Reuters study predict that over the next five years, their work will increasingly focus on judgment-based and expertise-driven tasks, such as adjudication in legal cases, rather than routine activities like legal research or document drafting.
The Potential Downsides of AI in the Legal Profession
Redundancy Risks
While AI isn’t expected to replace qualified legal professionals entirely, improved efficiency may lead to workforce reductions.
A study by Ironclad reveals that 31% of legal professionals are worried AI could impact their job security. Roles such as contract lawyers and document reviewers, where tasks like contract drafting and document analysis dominate are particularly vulnerable.
On the flip side, AI could open up opportunities in related fields, such as managing and implementing legal tech systems.
Imperfections of AI
AI introduces risks beyond job redundancy, stemming from its inherent imperfections, which can negatively impact the legal profession.
Issues such as hallucinations (false or misleading outputs), bias (potentially impacting impartiality), and security concerns (jeopardizing confidentiality) are critical.
These challenges underline the importance of rigorous testing and validation of AI systems to ensure they meet the high standards required in legal practice, protecting the integrity of the profession.
Leading Legal tech firms focus on developing advanced AI tools
Leading legaltech companies, including Thomson Reuters, Docusign, and LexisNexis, have developed AI systems specifically designed for legal professionals. With multi-billion-dollar valuations, these industry giants offer widely-used suites of legal AI software solutions.
Thomson Reuters supports legal professionals with its CoCounsel generative AI, a tool designed to streamline legal research by enabling quick document searches, summarizations, and analysis. Additionally, it has integrated AI capabilities into its flagship platforms, Practical Law and Westlaw, enhancing their research efficiency and functionality.
DocuSign, widely recognized for its electronic signature solutions across various industries, now leverages AI to enhance its offerings. Customers can generate, negotiate, and sign agreements while using AI tools to summarize documents and extract key data efficiently.
LexisNexis has integrated generative AI into its platform, enhancing its renowned legal research tools with features like conversational search and summarization capabilities. The platform now assists legal professionals in drafting contract clauses and summarizing documents, further streamlining their workflows.
Notable start-ups are bringing AI to legal functions
Smaller companies like Ironclad, Harvey AI, and LegalZoom are emerging as strong competitors to larger players, introducing their own innovative AI-driven solutions to the legal industry.
Ironclad, a leading provider of contract management software, leverages AI to assist with contract clause drafting, language review, and data extraction. Trusted by in-house legal teams at companies like Mastercard and L’Oréal, Ironclad’s AI streamlines contract workflows for greater efficiency.
AI start-up Harvey specializes in providing tailored large language models (LLMs) for law firms. Its platforms support tasks such as document drafting, legal research, and workflow optimization, benefiting professionals at firms like Macfarlanes, Reed Smith, and others.
LegalZoom offers online support for various legal services, including company registration and annual report preparation. Its AI-powered Doc Assist tool simplifies document management by summarizing content, breaking down clauses, and addressing common questions related to the document.
The development of in-house AI tools is becoming increasingly prevalent
The Advantages of Building In-House AI Tools
Customization and Relevance: Law firms are increasingly developing their own AI systems, such as chatbots and AI paralegals, often leveraging platforms like Microsoft’s Azure OpenAI infrastructure. By creating tools tailored to their specific needs, firms eliminate unnecessary features, optimizing costs and functionality.
Enhanced Compatibility: In-house tools can be seamlessly integrated with the firm’s existing software, reducing compatibility issues and ensuring smooth workflows.
Potential Revenue Streams: Firms that invest in building in-house AI systems also have the opportunity to license their technology to others, aligning with the modern adage: “Every company is a tech company.”
Strategic Flexibility: Combining proprietary tools with third-party platforms allows law firms to maintain control over their systems while benefiting from the scalability of external technologies.
In-house AI development not only supports operational efficiency but also positions law firms as innovators in the evolving legal tech landscape.
The Drawbacks of Building In-House AI Tools
Limited Technical Expertise: Developing AI tools in-house requires significant technical expertise, which some firms may lack, potentially leading to less effective or flawed systems.
Time-Consuming Development: The process of creating, testing, and implementing in-house AI tools can be lengthy, delaying their deployment and benefits.
Readiness of Third-Party Solutions: Unlike in-house systems, third-party AI tools are often ready-made and require only implementation, offering a faster route to adoption.
While in-house development offers customization and flexibility, these challenges underscore the importance of weighing the costs, resources, and time required before pursuing this approach.
Lawyer 2.0: The Next Gen Lawyer
Lawyers in the AI Era Need to Develop Advanced Skills
The Irreplaceable Value of Relationship-Building
As AI continues to automate routine tasks, legal professionals must focus on developing skills that remain uniquely human, with relationship-building being a standout.
Client loyalty to law firms often spans years, driven by the trust and strong connections they share with their legal advisors. In the age of AI, maintaining and cultivating these relationships will be more important than ever, ensuring lawyers continue to provide value that technology cannot replace.
Time can be dedicated to mastering the skill of mediation
The Role of Mediation
For many disputes, particularly in specialized areas like international arbitration, a human touch remains essential to facilitate effective mediation between parties. Legal professionals can refine their mediation skills by leveraging empathy to understand diverse perspectives and employing strong communication techniques to navigate discussions toward resolutions.
These skills can also be used to guide their own clients during disputes, encouraging open-mindedness, flexibility, and cooperation. For example, fostering empathy can help clients approach sensitive matters, such as divorce proceedings, with greater receptiveness and understanding.
“A good settlement is better than a good lawsuit.”
- Abraham Lincoln
Robot Mediators: A New Approach
While mediation is traditionally a human skill, technology has begun to make its mark. In the 2019 Canadian case E v D, involving a dispute over unpaid fees, a robot mediator was successfully employed.
However, this wasn’t a human-like AI engaging in conversations with the parties. Instead, the tool used was Smartsettle, an app where both parties submitted blind bids by adjusting sliders until they reached an agreement—remarkably, this was achieved within an hour.
A human touch is needed to judge legal cases
While AI applies the law strictly as written, human judges bring discretion to the table, using their judgment to ensure fair and just outcomes. This human element allows for flexibility in situations where rigid application of the law might fall short. Judges exercise discretion in several key areas:
Sentencing Flexibility: Judges can adjust the severity of a sentence based on factors like the defendant’s remorse, observed through verbal and physical cues.
Consideration of Third-Party Impacts: In family law, for instance, judges weigh the effects of rulings on children, considering factors like their age and relationships with parents.
Matters of Equity: In cases where strict application of the law might lead to an unjust result, judges can apply principles of equity. For example, in Westdeutsche Landesbank Girozentrale v Islington, the court awarded property rights to an unregistered contributor, prioritizing fairness over technicality.
These decisions often require empathy and a holistic view of the case—qualities that AI currently struggles to replicate. Consequently, human judges remain essential to the process of adjudication, ensuring outcomes that balance the letter of the law with the spirit of justice.
Morality in Upholding the Rule of Law
Moral Progress: The rule of law emphasizes equality before the law, but AI systems often reflect the biases ingrained in human data. Unlike AI, human judges have the capacity for moral progress—they can adapt their views on social issues as societal perspectives evolve or as they gain a deeper understanding of an issue. For example, movements advocating for racial and gender equality have encouraged more equitable treatment by judges who evolve alongside societal changes.
The Human Advantage: While human judges are not entirely free from bias, they possess a unique ability to grow and adapt their perspectives, promoting fairness and upholding the principles of the rule of law more effectively than AI systems.
However, humans are also susceptible to moral regress, where their views may become less progressive over time, potentially undermining equality and justice. This underscores the need for continuous education and reflection to prevent such setbacks.
AI-Assisted Adjudication
Despite the strong case for human adjudication, efforts to integrate AI into the judicial system continue to gain traction.
Smart Court Systems in China: Chinese judges are required to use the Smart Court System of Systems (SoS) as part of their decision-making process. This AI system recommends applicable laws and scans judgments for potential errors. If a judge disagrees with the system’s suggestions, they must submit a written explanation for their decision.
ChatGPT in Judicial Assistance: In countries like Colombia and Pakistan, judges have turned to AI tools such as ChatGPT for assistance in reviewing cases and making decisions, highlighting the growing role of AI in supporting judicial workflows.
These advancements demonstrate how AI can act as a supplementary tool, aiding human judges while preserving the essential role of discretion and morality in adjudication.
The workflow of the lawyer of the future
Maria is a newly qualified associate at a prominent global law firm, working from its London office. Her expertise lies in mergers and acquisitions (M&As), where she advises clients on complex corporate transactions.
Conclusion: The Future of Law in the Age of AI
The legal profession is undergoing a significant transformation as artificial intelligence reshapes traditional practices. AI introduces new possibilities for enhancing accuracy, improving workflows, and reducing costs through tools like generative AI and contract analysis software. These advancements bring greater efficiency to the field while redefining how legal professionals approach their work.
Challenges such as bias, security risks, and concerns over workforce impacts require careful consideration. Despite these obstacles, the human element remains crucial. Skills such as relationship-building, mediation, and moral judgment will continue to set legal professionals apart in an AI-driven world.
Rather than replacing human expertise, AI serves as a valuable tool for amplifying human capabilities. The next generation of lawyers who embrace these technologies while focusing on empathy and fairness will shape a legal profession that is both innovative and rooted in its core values. The future is not about competition between humans and AI but about collaboration for better outcomes in the pursuit of justice.