How Transformative Will Generative AI And Other Tools Be For The Legal Industry?

As the legal industry continues to evolve at a rapid pace, it’s becoming increasingly clear that generative AI will play a transformative role in how legal services are delivered. From streamlining the contract review process to automating document discovery, generative AI is already being used to improve efficiency and reduce costs in the legal profession. However, this is just the tip of the iceberg when it comes to the potential impact of this technology. As AI continues to advance, it has the potential to revolutionize the way lawyers work and fundamentally change the legal landscape.

Those are not my words; they are ChatGPT’s response to the prompt:

Write the opening paragraph for an article about how transformative generative AI will be for the legal industry in the style of Mark A. Cohen, Forbes Contributor.

ChatGPT’s answer was rendered in seconds, but it’s impact will linger for a long time. No doubt, this is a common response among those who have tinkered with OpenAI’s ChatGPT, DALLE- 2, or other generative AI tools. And this is just the beginning….

Sam Altman, OpenAI CEO, regards the current version of GPT as a work in progress. He recently tweeted: “ChatGPT is incredibly limited, but good enough at some things to create a misleading impression of greatness. it’s a mistake to be relying on it for anything important right now. it’s a preview of progress; we have lots of work to do on robustness and truthfulness.”

Perhaps Mr. Altman’s “curb your enthusiasm” message to users is a reminder that ChatGPT is a prototype and that he is well aware of flaws that include occasional factual inaccuracies and gibberish. Or maybe it stems from his knowledge that GPT-4 is slated to be released soon and promises to be a much improved version.

Rob Toews, a Forbes contributor focused on AI wrote: “As manic as the recent hype around ChatGPT has been, it will be a mere prelude to the public reaction when GPT-4 is released. Buckle up.” Toews predicts that the new version may be multimodal—able to work with images, videos and other data modalities in addition to text. That would mean that a text prompt as input could produce an image or take a video as input and answer questions about it in text format.

AI technology advances are not limited to generative AI. In the related field of machine learning, for example, where predictive and decision-based models are developed from running training algorithms across multiple, large datasets, technologies such as RegulAItion’s AIR Platform are now coming to market. AIR enables multi-company collaboration across large datasets to build more powerful AI models faster. Traditional hurdles of privacy, traceability, trust and security are addressed through decentralized peer-to-peer computing combined with blockchain and smart contracting features. This enables data owners to share insights from their data without it moving or leaving their custody and control.

What’s Behind All The Buzz?

ChatGPT is causing a stir for many reasons. It makes AI accessible, practical, easy to use, and versatile for nontechnical users. It provides detailed, intelligent answers (see above) across a wide array of knowledge domains. It is remarkably fast, erudite, fluid, thoughtful, and capable of providing nuanced responses to complex questions. Its mastery of content is rivaled by its ability, when directed, to respond in a specific artistic style or literary voice.

Unlike search engines like Google that produce a list of sources to sift through, review for relevance, and synthesize, ChatGPT curates, integrates, synthesizes, and produces a grammatically correct, well-written, and cross-disciplinary work product— in seconds .

There is a more visceral reason why ChatGPT has generated such a stir. It is a tool that propels the capability of technology into the realm of human creativity. It blurs the lines separating machine from human. Engagement does not require an ability to code or a technological background. It can engage in “conversation” that can be as wide or in-depth as the prompts. Most of all, its response has a human quality.

ChatGPT has taken us by surprise. In a world where change has become increasingly rapid and constant, ChatGPT stands out for its range, speed, and intelligence. Its eerily human quality is the real mind-blower. No wonder ChatGPT’s release has produced such a mix of awe, dread and excitement,

ChatGPT Is Front Page News

Since its November 30, 2022 prototype launch by San Francisco based Open AI, ChatGPT has spread like wildfire. It had 1M users within five days of its release and has grown so quickly that users often encounter access delays caused by excessive server demand. That’s not the half of it.

The New York Times reported Google CEO Sundar Pichai issued a “code red” in response to the threat ChatGPT poses to Google’s search business. A Financial Times article reported Microsoft, which had already invested $3B in OpenAI, is in discussions to invest another $10B. When tech Goliaths respond this way, business—and the rest of the world—takes notice.

A Fast Company article by Danica Lo provides a helpful primer on generative AI’s capabilities and uses. For example, besides its ability to answer complex questions across a wide range of knowledge domains, it can integrate those knowledge bases. The correct prompt enables it to “connect the dots,” a coveted human quality in today’s marketplace. It can write and debug computer programs, compose music, write and grade student essays (causing alarm among school systems and academics), and write poetry. Scientists used an earlier version of GPT to create novel protein sequences. One more time with feeling: this is just the beginning…..

McKinsey, among a growing list of leading consultancies, has proclaimed that generative AI tools like GPT and other technological advances could fundamentally change business. They have identified a wide array of use cases including: marketing and sales, operations IT/engineering, risk and legal, HR, and streamlining customer service. But the power of machines alone will not solve humanity’s wicked problems. Humans beings will play a key role, too. This requires adaptation, a key but often underestimated component of digital transformation.

Generative AI and other tools like robotics and data-insight enabling platforms have the potential to improve business as well as the human experience. To realize that potential requires investment in human beings— change management, cultural adaptation, lifetime learning, diversity, reevaluating hiring criteria, up-skilling, cross-functional workforces, and integration of the supply chain to cite a few.

The accelerating pace of technological change has heightened the importance and urgency of these human directives. Big business is investing significantly in the human aspect of digital transformation. It knows the success of the digital journey depends not only upon technology and data analytics but also upon human adaptation, creativity, inquisitiveness, agility collaboration, and teamwork. The legal function has a significant role to play in this process. It should lead, not lag. But will it?

How Will The Legal Industry Respond To Tools Like GPT?

The legal industry seldom coalesces. Its resistance to change is an exception. Law’s legacy stakeholders—tenured academics, law firm partners, senior corporate counsel, judges, and regulators— are united in their opposition to material change. Each has its own style of parry; all pay lip service to “innovation” while staunchly defending the status quo. The incremental change they acquiesce to seldom benefits end-users or the public at large.

Law is one of the last artisanal industries in a digital world. Erosion of public trust in lawyers; the opaque, torturously slow, protracted, costly, lawyer-centric, unpredictable judicial process; the many failings of legal education —to produce economically healthy and fit-for-the marketplace grads among them; the access to justice crisis; the erosion of the rule of law; and the assault on democracy are among the consequences of law’s stasis. Yet the legal industry stays its precarious course.

The legal market is a tale of two discrete segments: “people law” (individuals and SME’s) and “corporate law” (large companies and the wealthy). In the short-term, ChatGPT will affect each differently. This is particularly so in people law, especially if tools like ChatGPT remain accessible and affordable. They have the potential to democratize the delivery of legal services, change the role of lawyers, and transform the archaic judicial system.

Richard Susskind, the pre-eminent “legal futurist” and a good friend, offered: “we are seeing here the makings of a solution to the global access to justice problem – the emergence of tools that will empower people with no legal knowledge to understand and enforce their legal entitlements; systems that will enable people to draft their own documents, secure legal guidance without lawyers, and assess their own legal risks. We are still at the foothills but the road ahead is clear. “

ChatGPT builds and expands upon the seminal work of “people law” companies like Legal Zoom, Rocket Lawyer, and DoNotPay, each of whom has leveraged technology to enable millions to secure fast, affordable, and lawyer-vetted but lawyer-lite assistance. ChatGPT provides a powerful tool into the hands of users, one that does not require tech fluency. It can help them cut through the opacity and expense of retaining counsel. It can also help to demystify legal process, procedures, and language.

While the public may embrace ChatGPT with open laptops, don’t expect such a widely enthusiastic response from the corporate sector, especially law firms.

The corporate segment is principally comprised of law firms and corporate legal teams (“in-house”). There is a growing divide between the two as to purpose, mindset, relationship with the client and its customers, success metrics, and economics, among other things. Corporate legal teams are generally better acquainted with the enterprise, its leadership, risk profile, supply chain, business strategy, economics, products/services, and other risk factors than their outside counsel.

Corporate legal teams, especially at the senior level, increasingly operate as business leaders with legal backgrounds, not as “lawyers” in the narrow, traditional sense. They speak the language of business, operate cross-functionally, have developed relationships with the C-Suite and key business managers, and operate in a corporate structure, not a partnership one. “Partnering with clients” is not a catch-phrase for them; it is a reality. So too are words like “alignment,” “teamwork,” “value creation,” “digital transformation,” “up-skilling,” and “agility.”

Most corporate legal teams will cautiously and curiously relegate ChatGPT and other tools to “first draft” tasks, at least initially. The top ones, like the DXC legal team led by Bill Deckelman, have long recognized the importance of early adoption of digital technology and principles by lawyers and contracting professionals. Deckelman enthusiastically embraces generative AI’s emergence and what it portends for the legal function. He shared: “ChatGPT represents a paradigm shift in AI, and even more advanced models will be appearing very soon. New applications applying generative AI technology will have the potential to disrupt traditional modes of law practice.”

Most law firms will regard ChatGPT and tools like it as billable hour killers and an end to client-subsidized junior lawyer training by observing. They will resort to “scare tactics” with clients, warning them of the unpredictability, inaccuracy, and risk of relying on new, relatively untested technology instead of focusing on use cases. Such short-sighted, self-interested, and defensive behavior will likely cause some corporate legal teams to narrowly restrict the universe of generative AI use cases and insist that “lawyer oversight” is required. That is a variation on law firms’ response to emails, e-discovery, and digital transformation more broadly.

One managing partner confided: ““Adoption comes only when big firms are forced to do so. Just about everything else is window dressing to entice a client in without really making the investments to deliver on the implied promise.” There are many reasons for this purposefully short-sighted view that is all-too-common among law firms. It will continue until clients exert more pressure to change and/or asymmetric competition enters the legal marketplace (see below).

This presents an opportunity for firms to differentiate themselves to talent, clients, and the corporate world. They can do this by:

> investing in the creation of new practice areas (such as generative AI, data agility, and other burgeoning fields);

>attracting top talent from multiple disciplines by offering an opportunity to work at the “bleeding edge” of law, business, and technology;

providing a sense of purpose;

>liberating lawyers from “drudge work” that generative AI can do faster, more efficiently, and arguably more reliably and better; and

>investing in agility training and up-skilling to identify and prepare for new opportunities;

>creating client-oriented solutions that advance business objectives and elevate customer experience rather than produce “legal work” alone.

Joe Andrew, the Global Chairman of the world’s largest global law firm has said frequently, “ When big law firms embrace new technology, they not only provide better service to clients, they are more likely to attract the best talent to their firm by lessening the drudgery of the more commoditized components of law. The future of every law firm is literally the talent it attracts and retains.”

The Big Four and tech Goliaths like Amazon, Microsoft, and Google will, increasingly, become key players in a discussion of legal industry transformation. EY made headlines recently by spinning off its consulting practice from the audit function and announcing that consulting intends to morph from a partnership to corporate model. Look for one or more of the other Big Four enterprises to follow suit. They are well positioned to help large enterprises (as well as collaborate with the tech giants) leverage generative AI and other platforms to align the legal function with the enterprise, its workforce, customers, supply chain, and advance enterprise ESG/DEI and other initiatives.

The tech giants may well elect to leverage their technological muscle to expand their existing footprint in the legal industry. They have the brand, capital, data, customer base, war chest, expertise, talent, vision, and transformational experience to fundamentally change the entire legal landscape and to reshape law as we know it. This column has suggested that prospect previously. The emergence of new technologies impacting business and law heightens the probability of Big Tech’s entry into the legal sector. This will not eliminate lawyers but it will certainly change their roles, tasks, organizational and economic models, backgrounds, training, and customer orientation.

Conclusion

Generative AI, data analytics, robotics, the metaverse, and other platforms are business and social tools, not “legal tech.” They will quickly become a widely utilized, accepted, and integral part of business and society. This will put pressure on the legal function to shift from defense to offense. Rather than creating reasons to restrict their use, legal will be constrained by business, Government, and social advocates to focus on leveraging them to help create scalable solutions to a wide array of challenges. This will happen sooner than most lawyers think. It’s good news for business and society, and it will help unlock the latent potential of the legal function if lawyers don’t stand in the way.