In Brief:
- The integration of Generative AI in legal services can not merely automate tasks but also disrupt the entire foundations of legal justice.
- The global legal tech market will reach US$68.04 billion by 2023, growing at a CAGR of 8.7% during the period of 2024-2034.
- Data privacy, ethical use of AI in decision-making, and the need for continuous supervision and validation of AI-driven outputs will remain key challenges of Generative AI in legal tech.
Where most industries are adopting a substantial technology-driven approach, the legal sector has been untouched due to the unstructured nature of legal data. However, the emergence of Generative AI has now introduced significant advantages to the industry.
In recent years, the legal tech sector has experienced a crucial transformation where law firms are forming strategies with use cases. According to the Deloitte report, General Counsel (GCs), senior corporate counsel, and Legal COOs over the past three months has started or ended with a discussion about Generative AI.
Considering the Future Market Insights report, the global market of legal tech is going to experience growth at a CAGR of 8.7%, from US$ 29.60 billion in 2024 to US$ 68.04 billion by 2034.
Generative AI can be applied in several ways that are relevant to legal services, including textual content generation, summarization, classification, extraction, Q&A, and reasoning. There are a range of opportunities of leveraging Generative AI that law firms should look at for their legal operations work.
Why Generative AI Matters for The Legal Industry?
Before diving, let us understand Generative AI. Simply put, Generative AI (GenAI) is a branch of artificial intelligence (AI) that emphasizes creating new content, such as text, images, or audio. GenAI performs by learning patterns and structures from existing data. The integration of Generative AI in the legal sector takes the industry to the next level.
A survey by LexisNexis Legal & Professional revealed that over 40% of lawyers have used and have plans to use generative AI in their legal work. The ability to create highly specific content by Generative AI in response to users’ queries has sparked interest among legal industry professionals.
Taking the reference of the LexisNexis survey, 77% of lawyers believe the use of generative AI will increase the efficiency of lawyers, paralegals, or law clerks. Additionally, 63% feel that it will change the way law is taught and studied.
The adoption of Generative AI is increasing within both small-scale and large-scale law firms to achieve economies of scale. This AI tool can be pervasive to the core of how legal services are being done today. Generative AI can not only automate tasks but also disrupt the entire foundations of the legal industry.
Here is how Generative AI is beneficial to the Legal Industry.
- It is efficient and cost-effective
- It minimizes errors and inconsistencies in legal documents
- It provides data-driven insights for informed decisions
Also Read: Top AI Innovations in Recent Years
Generative AI in LegalTech: Real-World Use Cases
As a human-like AI tool, Generative AI has led to various applications in the legal industry. Let’s have a look at the top use cases of Generative AI in legal tech.
Legal Research and Analysis
Generative AI tools can evaluate extensive legal databases, case laws, and precedents for fast and accurate research results. Enabled by natural language understanding (NLU), these AI tools can extract relevant information, summarize cases, and recognize patterns that human researchers might overlook.
Companies like ROSS Intelligence and Lex Machina leverage AI-enabled legal research platforms that help lawyers prepare cases efficiently.
Contract Drafting and Review
In the legal industry, one of the meticulous tasks that require detailed attention and precision is contract drafting. By creating initial drafts based on predefined templates and clauses, Generative AI can bring automation to the drafting process. The AI tool can also review existing contracts and flag inconsistencies while ensuring compliance with legal standards.
For example, platforms like Kira Systems and LawGeex take advantage of AI to streamline contract management workflows.
Due Diligence and Compliance
To analyze risks and compliance issues during mergers and acquisitions, and regulatory audits, legal teams conduct extensive due diligence. This process can be accelerated with the use of Generative AI. The AI tool can examine documents, identify potential risks, and provide comprehensive reports.
Platforms such as Luminance and Leverton leverage AI algorithms to enhance the accuracy and efficiency of due diligence.
Legal Predictive Analytics
With Generative AI, law firms can predict case outcomes and litigation trends. The AI tool can assess and understand historical data and case precedents and forecast potential legal outcomes. This will allow lawyers to make informed decisions and implement effective strategies.
Companies such as Premonition and CaseMine offer predictive analytics services powered by AI to help professionals in the industry anticipate judicial decisions.
Can Generative AI Replace Professionals in the Legal Industry?
As Generative AI models have already proven their significance by automating various legal work, questions like will this AI tool replace human workers in this industry are arising. However, many industry professionals believe that it does not seem possible at this point.
Generative AI can automate time-consuming manual tasks, freeing up lawyers to tackle more unique and creative tasks about legal issues. It is not surprising that AI-powered tools and techniques can outperform humans. The technology can even eliminate the need for human input in certain aspects of legal work like writing contracts or checking papers.
Despite this, the industry needs human professionals to bring empathy and understanding in law which cannot be possible with Generative AI right now.
Also Read: The Double-Edged Sword: The Impact of AI on Academic Integrity
Challenges and Considerations
Although Generative AI promises a lot in transforming LegalTech, there are certain challenges that need to be addressed. Key challenges include data privacy, the ethical use of AI in decision-making, and the need for continuous supervision and validation of AI-led outputs to ensure reliability and compliance.
What Does The Future Hold for Generative AI in Legal Services?
With rapid technological advancements, Generative AI models will continue to evolve and their adoption in the legal industry is expected to grow. Law firms can gain a competitive advantage by embracing AI-driven solutions to deliver faster and more accurate legal services while enhancing client satisfaction.
In essence, Generative AI will bring innovative solutions that improve accuracy, efficiency, and decision-making capabilities, shaping the future of legal tech. We believe its transformative impact on legal practices and client services will undoubtedly create a more dynamic and agile legal ecosystem.
Stay tuned to The Future Talk for more such interesting topics. Comment your thoughts and join the conversation.
Your writing has a way of resonating with me on a deep level. It’s clear that you put a lot of thought and effort into each piece, and it certainly doesn’t go unnoticed.
Thank You Alfredo. We will continue providing such insights.
Good job
keep up your good work
I will share and support.
Thanks Vivek, your writing sounds a real alarm for us to get ready to be augmented. I consider AI as a definitive great and smart intern we shoudl rely upon. I can’t predict the future, but I see legal experts to become more prompteers.