While the use of generative artificial intelligence by law firms may not be widespread right now, that could change quickly. How soon? Well, within the next year, 73% of attorneys expect to somehow integrate AI into their practice, a newly released report shows. And while only about 46% of lawyers surveyed by information services provider Wolters Kluwer are fully leveraging technology right now, 87% said they believe it can generally improve their day-to-day operations.
As a range of industries look to use generative AI – which is a type of artificial intelligence that creates content such as text, graphics and documents – more and more legal professionals are turning to the technology to handle routine functions, like document review, legal research and contract editing.
Now, tasks that are typically time-consuming can be completed in minutes or hours – rather than days – enabling attorneys to focus on building client relationships as well as actually practicing law, instead of being bogged down by administrative work.
Currently valued at around $1.3 billion, the AI legal software market is projected to hit $8.7 billion by 2030, according to market research firm Global Industry Analysts.
A March 2023 study by Goldman Sachs found that while generative AI will be more of a supplementary force for many jobs, its impact on the legal sector will be quite disruptive over the next decade. According to the analysis, up to 44% of legal tasks could eventually be automated away — more than any other industry, except for administrative work.
In the near future, there will be two kinds of attorneys: those who use AI “to benefit their clients, to keep costs low and to improve their advocacy of those clients” and those who are unemployed, according to Christopher Warren, managing partner of Little Falls-based Scarinci Hollenbeck’s New York City office.
“It’s a bold statement, but I think it’s true,” said Warren.
Besides boosting productivity and efficiency, one of the most significant advantages of employing AI in the legal profession is its potential to reduce costs for firms and their clients, he said.
“It allows me to be a lot more competitive in the marketplace and allows me to respond faster to client inquiries. So, I’m able to do my job more effectively and efficiently at a lower cost point than traditional firms that are doing it the old way,” said Warren, who estimates a collective client savings of between $1,000 to $2,000 a day thanks to his daily AI use.
One valuable use he’s found is for editing contracts and legal documents.
“There is software that helps with things like inserting contract terms of mass changes to a document,” Warren explained. “I’m not saying that AI is used to write anything. It can’t really write a legal document the same way that an attorney can write a legal document, but it certainly can help in speeding up the process itself.”
“For example, if I’m drafting a complaint and I want to add a party to the complaint or change a name, instead of going through and changing all of the plurals and the possessives from her to them, I can have an AI program go through a 20-page document and update all of the grammatical changes that need to happen in a document,” he said.
It’s also proven to be helpful when it comes to research of case law and statutes.
“It’s almost like having a conversation with an associate who has reviewed 20,000 pages of records and is able to help me pinpoint information much faster and much more efficiently than if I had to go into a conference room, put down 20,000 pages and go through them,” he said.
“In a way, you’re still doing that, but you’re utilizing a tool to help you find the information you need to answer questions or do an analysis,” said Warren, adding, “It certainly gives me a really good start. And what used to take six, seven, eight or even 10 hours to do can be accomplished in a much shorter period of time.”
AI is also great for “very simple note taking,” Warren said. “You used to have an associate or paralegal on a phone call or in a room taking notes. Now, I can have AI take notes, email me a summary and give me the takeaways,” he said.
Warren also cited Chatbots. “Instead of an attorney being on the phone with a client, doing the intake and asking questions, this is a tool that can be used to determine if it’s the right client for the firm of if they should be referred to another attorney,” he said.
Warren also relies on it for calendaring and docketing. “There are programs that will automatically calendar and docket on your court filings. So, a court filing comes in, it reads the filing – which it gets right from the websites – and puts it on the calendar for you, so you never miss a deadline,” he stated.
“These tools are so powerful that it’s not even an incremental type of jump. It’s a massive jump in productivity and a massive jump in cost savings to the client. To not use these tools is a disservice, in my opinion, because you could be doing something so much more effective and so much more efficient and in a way that benefits the client directly. How do you not do that?” said Warren.
As for billing, Warren has adjusted his model because AI has cut down on the number of hours spent on certain tasks.
On a given day, which ranges from eight to 12 hours, Warren can shave off between one to three hours of work thanks to AI, so he does not bill clients for the time he saves them.
“On the flipside, I’m a lot more productive in the time I am working, because I’m able to get more work done,” he explained. “So, if I was going to bill 10 hours in a day, I’m still going to bill 10 hours in a day. However, the individual clients are receiving the cost savings because I’m billing them less for the same work.”
“It’s a game changer moving forward because of how much more competitive an attorney could be with another attorney,” Warren said. “Why would you not go with an attorney that costs you $2,000 instead of $10,000 for the same result? And that is part of what AI does. It’s a leveling field type situation because everyone who wants to will have access to this technology and can utilize it for the benefit of their clients.”
At the same time, Warren said he believes there are definitely a few functions at a firm that are not appropriate for AI. “I also wouldn’t have it draft briefs, pleadings, motions or affidavits – the attorney work product,” he said.
“The bread and butter of an attorney is not necessarily in fact gathering or the collation of information,” he explained. “It’s in the analysis. We shouldn’t try to make AI come up with the strategy and analysis of what are clients are trying to accomplish.”
“At the end of the day, that’s what a lawyer does – takes their client’s position, advocates it to third parties and puts it in the best light possible. And putting that argument forward in a way that’s compelling, articulate and convincing and then being able to respond,” he explained. “Robots can’t do that — at least not yet. They can’t advocate on someone else’s behalf.”
Considering that lawyers are notorious for logging long hours, contributing to stress and potential burnout, it’s no surprise that any technology that can make the routine parts of the job without sacrificing quality is welcome.
Warren – who leads a team of 25 attorneys specializing in financial services, government investigations and business litigation – said the conversation about work-life balance is especially important. As part of his goal to foster a sustainable work environment for attorneys, Warren wants to “empower them with the tools that make them as productive as possible.”
Before beginning his legal career in 2013, Warren gained decades of experience in the business and financial services industry in roles ranging from licensed advisor to founding partner of several real estate investment and services companies.
Six years ago, he founded Warren Law Group, which merged earlier this month with Scarinci Hollenbeck, a move that the New Jersey business law firm said will boost its presence in New York City, as well as expand its range of legal services for clients.
Areas of concern
Since generative AI is still quite new, the legal world – like many other industries – is trying to answer important questions surrounding the technology, particularly when it comes to confidentiality, accuracy and liability.
Last year, when ChatGPT, an artificial intelligence chatbot, took the bar exam, the technology scored in the 90th percentile, placing it in the top 10% of humans.
On the flip side, after two attorneys filed legal briefs written by ChatGPT that ended up being full of fake cases and citations, a federal judge ordered them in June 2023 to pay $5,000 in fines.
An October 2023 survey by Roseland-based law firm Lowenstein Sandler and the Association of Corporate Counsel – New Jersey concluded that in-house counsel believe the need for human oversight and formal policy, as well as education, is key to addressing concerns and fully harnessing generative AI’s potential.
In recent months, the New Jersey Supreme Court has formed a special committee to explore the legal and ethical implications that AI poses for court operations and the practice of law. The American Bar Association also launched a year-long task force to study the effects.
Warren believes the benefits of the technology are still “not widely understood” in the legal landscape.
“In the marketplace, I don’t think I’ve ever met another attorney that uses AI as much as I do, or that’s as interested in the field in terms of how it can be used in a business capacity for productivity,” Warren said. “My interest is how to make people as productive as possible and return the greatest benefit and value to a client.”
In advance of merging with Scarinci Hollenbeck, Warren said the two firms started a committee to discuss AI — a step he recommends all firms take before incorporating it.
“It’s useful in that the attorneys have a place to talk about the issues, brainstorm and ask the right questions and then find the right answers so that they’re comfortable using some of this technology,” he said. “And, adapting it in a way that they understand the benefit of it and the risk – or detriment – of using it.”
A changing market
Warren pointed to a generational shift in population that will affect the job market – both inside and outside the legal industry.
“There are a lot more boomers than there are Xennials, Gen Z and Millennials. So, we’re actually going to have a slightly reduced population, which means there’s going to be less jobs and less people to do the jobs. So, the competition will naturally be a little bit more fierce and there’ll be more work to do for less people,” he explained.
“But, with tools like this, you can actually accomplish it,” he said. “You can actually do the amount of work that would normally take you 20 hours in two. And that’s not an exaggeration, by the way. It’s literally that significant. It’s a massive reduction in time and a substantial reduction in cost in time.”
Te Wu, chief executive officer of Cedar Grove business management consultancy PMO Advisory and an associate professor at Montclair State University, said, “Artificial intelligence is here to stay and it is being weaved into the fabric of business … whether we like it or not.”
“For most business professionals … the option is not whether to join this revolution but to understand who will likely be most impacted, what the potential opportunities and threats are, when to trust AI and its analysis and recommendations, where to most appropriately apply AI to enhance speed to market without sacrificing quality, why to use (or not use) AI, and how to balance the power and promise of AI with the delicate and complex nature of human work,” he said. “These are not easy tasks, which is a good thing. After all, we still need true organic intelligence to make the most of the artificial one.”
Moving forward, the technology is expected to become more sophisticated, said Steve Roberts, vice president of marketing at Los Angeles-based Kindo, a secure AI productivity platform.
After noting strong interest in the tool for daily workflows – particularly by human resources groups and law firms – Roberts said, “Many have experimented with AI for routine tasks, yet concerns about its effectiveness with complex work and security remain prominent barriers,” he explained.
AI now primarily interacts through text-based input and output, which Roberts said “suits certain roles well” but “doesn’t align with the specific needs of others.”
“Looking ahead to 2024, we are due for a dramatic shift with the introduction of multimodal AI, agents and co-pilots, promising to bridge this gap in usability. On the security front, emerging solutions like Kindo are entering the market, offering a secure, comprehensive and turnkey AI experience for any AI model,” he said.
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