The Role of AI in Law Firms – Could we Expect an Even More Competitive Market?

Disclaimer: This article is written by Taha Ragheb. Any views and opinions expressed in this article are those of the writers and do not necessarily reflect the views or positions of the team editor nor any entities they represent.

With ChatGPT leading the market and paving the way for the next generation of AI tools, there is a wealth of opinions discussing its implications on business. This is especially true for law firms, as a large portion of staff, known as paralegals, might be expected to compete with this next generation of technology. A paralegal aids the law firm in researching case law and statutory provisions and instruments, as well as condensing the most relevant and important judgements to allow solicitors and barristers to save time in the case management process. These tasks are usually slow and repetitive, as the list of possibly relevant authority can stack high. Despite this, a role as a paralegal can serve as an important first step for an aspiring lawyer, allowing them to gain a deeper understanding of what case management looks like from the first stage. Gaining this kind of experience can be invaluable. But is this kind of task going to continue in the near future if we have technology to rid of it? And what does the level of legal advice and advocacy look like without human interaction?

Can AI really replace the role?

The first question to look into is what might the legal space look like without the role paralegals play today.

Paralegals sift through tons of heavy case law judgements and statutes, specifically looking to understand how previous judgements can be used in the future. This is especially important when anticipating the strength of a case and finding the key principles as to why previous cases were dismissed or allowed. This in turn allows lawyers to use a precedent (a previous judgement) to argue why their client should be preferred. Many argue that this might never be replaced by AI technology because it does not hold the capacity to find contentious points of importance. Polonsky states

‘While AI can analyse large volumes of data quickly, it is not yet capable of the kind of nuanced judgement and decision-making that paralegals are capable of’.

This argument is quite common amongst other commentators, however, other sources claim that legal services are most exposed to AI and Goldman Sachs estimates that 44% of legal work could be automated.

How technology has impacted employment in the past:

Although some predict the possibility of many roles being replaced by AI, it is important to consider how similar innovations have impacted the employment rate in the past. This might serve us with an insight into what the future may hold.

The University of Melbourne discusses similar innovations, such as the automobile industry. The University states:

‘The rise of internal-combustion engine destroyed a whole other personal transport industry – that around the horse and carriage. Lots of jobs were lost as a result, but rather than declining, employment in the automotive industry escalated rapidly and there was no net loss of jobs, even though productivity per worker grew in its early days.’

Considering the vast number of other industries technology has similarly boosted the productivity in, especially so in knowledge-based sectors with the impact of the internet, there may be a case in arguing that such technology will boost efficiency and boost employment. But this especially relies on whether the demand for legal services increases, as it did so with the automobile industry, for example. Since some argue that the increased efficiency in case management should reduce the cost of legal services, this may well be the case, as many avoid approaching firms for fear of the high expense fees.

High expense fees – A drop or boost in business?

With the rise of AI and its chance to reduce the effort required to carry out certain roles, the natural link in this case would be to assume that the cost of legal services should drop. At first this may seem worrying, as a lower level of money coming in may reduce the amount of staff legal firms can support, and could impact salary alongside this too. However, if the cost of legal services is reduced, there could be a positive impact on business. The Legal Services Board, carrying out the largest survey on legal needs in England and Wales, found that 31% of respondents had an unmet contentious legal problem, yet only 55% sought out legal aid. With the opportunity of legal aid becoming cheaper, there could be an increase in clients, which in turn could level the worry of unemployment, or even provide an opportunity for more roles.