Generative artificial intelligence (Gen AI) continues to make a splash in the legal industry. The rapidly evolving technology has been adopted and transformed in new and innovative ways, solidifying its potential to transform legal practices. Depending on how law firms and clients adopt and leverage it, of course.
The 2024 Report on the State of the US Legal Market by the Thomson Reuters Institute and the Georgetown University Law Center on Ethics and the Legal Profession explores some of the possible scenarios and implications of Gen AI for the future of legal services.
The report offers three hypothetical scenarios of how Gen AI could affect the legal market in the next few years, each with varying degrees of impact and benefit for different stakeholders.
1. The Rising Tide
The first scenario, called “the rising tide”, envisions a situation where Gen AI benefits both clients and law firms, as it improves client value and law firm profits. Clients will receive higher-quality advice, faster service, and more creative solutions, while firms reduce operational costs and improve labor efficiency. This leads to a shift in the composition and roles of legal teams within law firms, as well as changes in the career path, pricing model, and education of lawyers.
2. A Lopsided Landscape
This scenario envisages a situation where clients use Gen AI to assert more control over legal services, diminishing the traditional role and value of law firms. Clients may handle more legal work in-house, demand more competitive and transparent pricing models from law firms, and diversify their legal service providers. This will increase competition for law firms, making it difficult to differentiate themselves and justify their fees.
3. No Big Thing
The third scenario, “no big thing”, imagines a situation where Gen AI does not have a significant strategic impact on law firms, serving only as an advanced tool for knowledge management and search functions. In this scenario, this tech does not substantially alter current legal practices or the balance of power between law firms and clients. It finds some utility in operations, marketing, IT, and HR, but does not notably change client benefits or firm costs.
As a firm, we imagine Gen AI as “a rising tide” and have seen first-hand how we can achieve the rewards of this scenario by integrating these tools into our model. Caravel has been fortunate to have the opportunity to work with and implement a variety of cutting-edge tools that improve efficiency and streamline operations. Caravel continues to see the value in progressing alongside the tech industry, adopting new and innovative tools that enhance the quality of our clients’ experience.
The Reaction to Gen AI
The report highlights law firm leaders’ mixed feelings about the future role of Gen AI in the legal profession, as they weigh the opportunities and risks of this emerging technology. According to the report, 4 in 10 people linger on the side of pessimism, while 6 in 10 are optimistic of the future that Gen AI holds for the legal industry.
Biggest fears include:
- Accuracy
- Loss of jobs
- The demise of the profession.
These fears reflect the broader misuse or overuse of the tech rather than responding to the capabilities of Gen AI tools when leveraged as a co-pilot to legal professionals.
The 6 out of 10 that were optimistic of Gen AI’s capabilities expressed excitement over the prospect of increased productivity and efficiency that this tech offers.
The report concludes that law firm leaders need to be aware of the changes and opportunities that these new technologies present for the legal market and adapt their strategies accordingly. But what does the future actually hold for Gen AI? Should this information change your approach to these tools?
The response to AI and predictions of its future impact on the legal industry in this report highlights the approach taken by firms in their integration of Gen AI tools, rather than commenting on the skills of the tools themselves. When implemented correctly, balancing efficiency with accuracy and quality, leveraging Gen AI will prove to be an asset. While new tools come with new challenges, the risks of being left behind as the legal industry advances will pose a larger issue.
Want to learn more about how Caravel is leveraging innovative tech tools? Get in touch with our team today!