The Future of Legal AI: How Artificial Intelligence is Transforming the Legal Industry
The Legal Industry’s Shift to Digital Tools
While ChatGPT is currently experiencing significant attention; its open-source application has brought the potential of artificial intelligence (AI) to widespread awareness. Notably, the technology that forms the basis of this intriguing tool existed well before its 2022 debut. According to a 2018 article published by Harvard Law School, it remarked that “Within a few years, AI will be taking over (or at least affecting) a significant amount of work now done by lawyers. 39% of in-house counsel expect that AI will be commonplace in legal work within ten years”.
On a similar note, Jeannie Marie Paterson, Professor of Law and Co-Director of the Centre for Artificial Intelligence and Digital Ethics (CAIDE) at the University of Melbourne highlighted that “Although tech in the legal sector has been around for some time, it has predominantly been used for what is sometimes called process automation, for example helping lawyers to manage large volumes of documents in due diligence or discovery”.
In Malaysia, the rising use of artificial intelligence in the legal sector was remarkably captured by an article published by Taylor’s University wherein it was mentioned that “Undoubtedly, AI has ushered in a new era for the legal industry by making legal processes more efficient, accurate, cost-effective, and accessible for not only legal practitioners but also clients”.
Open-source AI ability to generate language expands the potential for artificial intelligence to enhance lawyers' capabilities significantly. However, several challenges and obstacles must be addressed to fully realize this potential
AI Risks Associated with Legal Work
According to the 2023 survey conducted by Thomson Reuters Institute, that involves over 440 lawyers from large and midsize law firms in the US, UK, and Canada, revealed a cautious attitude towards the adoption of AI. According to the survey, 62% of respondents (80% among partners or managing partners) expressed reservations about using ChatGPT and other generative AI technologies in their professional practice.
Liz Pinnock, Director and Head of Group Legal at RSM South Africa commented that “There are a number of risks associated with the use of AI in legal work. These include both the quality of the output and the potential for bias. The output is based on and is only as good as, the data on which humans train the AI solution, which, if biased or incorrect, can result in inaccurate results”. She further added that “A real risk is also presented in legal professionals becoming overly reliant on AI solutions, which is a problem because AI lacks human reasoning. Legal professionals are bound by ethical obligations and the irresponsible use of AI may result in civil liability as well as reputational damage”.
In May 2023, CNN news reported that a lawyer in the United States was found to have cited fake court citations from ChatGPT as he had relied on the AI Chatbot to compile information for the filing and failed to ensure the validity and accuracy of the citations used. Too bad for the lawyer, the cases incorporated by ChatGPT into the draft were fictional, the AI chatbot fabricated sources to lend credibility to its responses.
How SMEs Can Leverage Legal AI?
In May 2023, CNN news reported that a lawyer in the United States was found to have cited fake court citations from ChatGPT as he had relied on the AI Chatbot to compile information for the filing and failed to ensure the validity and accuracy of the citations used. Too bad for the lawyer, the cases incorporated by ChatGPT into the draft were fictional, the AI chatbot fabricated sources to lend credibility to its responses.
SMEs can significantly reduce costs by leveraging Legal AI. Automating routine legal tasks, such as contract review and document drafting, eliminates the need for extensive manual labor and minimizes errors, leading to substantial savings. Additionally, AI-powered legal research tools provide quick and affordable access to comprehensive legal information, reducing the need for expensive legal consultations.
Recently, a rising Malaysian company known as LawBank Asia offers services to streamline these processes by introducing Legal AI chatbot to chat with people, specifically SME’s owners, in helping them to obtain legal solutions to their business-related legal inquiries and consultation. In this way, SMEs can allocate their resources more efficiently, allowing them to focus on strategic growth and core business activities. LawBank Asia also facilitates the process of conversing through their Legal AI by helping SMEs owners to articulate their business related legal inquires, formulating comprehensive and accurate advice to the owners.
AI and The Future
As the old saying goes, “An ounce of prevention is worth a pound of cure”. In operating businesses, a poorly drafted contract, lease, or employment agreement could result in expensive litigation in the future. Ultimately, AI has the capacity to propel sectoral growth by driving substantial efficiencies, optimizing cross-border legal operations, elevating the caliber of legal services, and fostering closer lawyer-client bonds.
However, these advantages can only be fully realized if lawyers grasp and adeptly manage the attendant risk.
AI tools like LawBank Asia, Rocket Lawyer etc. would expect to propel and reshape the way we work, learn and create, as concluded by Liz in her work supra, “It is reasonable to conclude that the use of AI in the next 5-10 years will dominate the legal sector, and legal professionals who are not making use of AI to increase efficiencies will fall behind significantly to the point of becoming redundant. AI may also potentially see certain job functions and positions becoming redundant such as legal researchers and highly administrative legal functions which don’t require the application of one’s legal knowledge”.