Weekly Business Insights from Top Ten Business Magazines | Week 300 | Shaping Section | 1

Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 300 | June 9-15, 2023.

Generative AI could radically alter the practice of law

The Economist | June 6, 2023

Listen to the Extractive Summary of the Article

Lawyers are a conservative bunch, befitting a profession that rewards preparedness, sagacity and respect for precedent. The legal profession is hardly the only field about which one could say that for that profession AI is neither a fad nor an apocalypse, but a tool in its infancy—and one that could radically change how lawyers work and law firms make money.  But few combine as clear a use case with so high a risk. Firms that get it right stand to reap rewards. Laggards risk going the way of typesetters.  According to a recent report from Goldman Sachs, a bank, 44% of legal tasks could be performed by AI, more than in any occupation surveyed.

AI has the potential to transform the legal profession in three big ways. First, it could reduce big firms’ manpower advantage. In large, complex lawsuits, these firms tell dozens of associates to read millions of pages of documents looking for answers to senior lawyers’ questions and hunches. Now a single lawyer or small firm will be able to upload these documents into a litigation-prep ai and begin querying them.

Second, AI could change how firms make money. Richard Susskind, technology adviser to the Lord Chief Justice of England, argues that firms profit by “having armies of young lawyers to whom they pay less than they charge clients”. If ai can do the work of those armies in seconds, firms will need to change their billing practices. Some may move to charging flat fees based on the service provided, rather than for the amount of time spent providing it. 

Third, ai could change how many lawyers exist and where they work. It is hard to see how AI “doesn’t dramatically reduce the number of lawyers the world needs”. If AI can do in 20 seconds a task that would have taken a dozen associates 50 hours each, then why would big firms continue hiring dozens of associates?

That may not happen for a while, however. Moreover, AI could make legal services cheaper and thus more widely available, particularly for small and medium-sized businesses that currently often struggle to afford them. Ambitious law-school graduates may find that ai provides an easier path to starting a solo practice. If so, then ai could actually lead to an increase in the overall number of lawyers, as well as changing the sort of tasks they perform.

3 key takeaways from the article

1. The legal profession is hardly the only field about which one could say that for that profession AI is neither a fad nor an apocalypse, but a tool in its infancy—and one that could radically change how lawyers work and law firms make money.
2. AI has the potential to transform the legal profession in three big ways. First, it could reduce big firms’ manpower advantage.  Second, AI could change how firms make money.  Third, AI could change how many lawyers exist and where they work.
3. That may not happen for a while, however. Moreover, AI could make legal services cheaper and thus more widely available, particularly for small and medium-sized businesses that currently often struggle to afford them. Ambitious law-school graduates may find that AI provides an easier path to starting a solo practice.

Full Article

(Copyright)

Topics:  Law, Professions, Technology, Artificial Intelligence