The advantages and disadvantages of AI in law firms

Artificial intelligence and machine learning are common phrases nowadays, and very few people are unaware of them. However, any time a new idea launches, people are pretty reluctant to accept it.

Lawyers and legal professionals are no exception. 

Artificial intelligence (AI) and machine learning are already transforming the work of lawyers and law firms in many ways and there are enormous opportunities for the future. Let’s discuss how artificial intelligence and machine learning have gradually transformed law firms (both in positive and negative ways) and how they can continue to improve. 

Positive effects of AI and machine learning in law

First, let’s discuss the positive effects of machine learning and AI on the legal industry. 

Automatic reminders

Breaking down legal procedures or duties traditionally handled by legal practitioners and embedding some of those parts in technology is how legal automation is accomplished. The most popular legal automation is complex, high-volume labor and common and repetitive duties, and they’re most common in high-volume data collection, review, repeatable processes, and document generation.

Consider using mail merge technology to address typical form letters or an automated tickler or reminder system to keep track of court dates. However, legal automation’s uses have advanced sophistication, ranging from filtering giant document review sets during litigation to extracting crucial words from agreements in due diligence operations. Lawyers have recently begun automating the creation of legal contracts and key elements in the negotiation process and this is another area of law that can benefit from AI.

Suppose you always set the alarm, a phone call reminder, at 4:00 pm every Tuesday for about two to three months to do a similar thing. A machine-learning smartphone will recognize the pattern and send you reminders automatically. It can help avoid forgetting a weekly task and is an excellent help for lawyers. 

Contract review and analysis in less time

Lawyers have to analyze contracts in bulks and give comments and redlines to advise clients. Imagine a firm with thousands of reviewed contracts, and you need to keep a copy of their financial obligation, renewal, expiration dates, and more. In a law firm, AI can perform such tasks efficiently. 

The procedure for using AI-powered document evaluation is straightforward: The system identifies the required papers, analyses them, and identifies the requested terms and clauses, after which they are ready for review.

Managing the project while evaluating the uploaded documents is crucial for the new technology. This is a hybrid of technological and manual labor. AI-powered document review comprehends papers in various languages, file kinds, and practice areas, assisting in the practical evaluation and categorization of documents, allowing employees to spend more time on quality assurance and legal analysis.

Ease of legal research

Lawyers and legal firms now have unparalleled access to information about lawyers, judges, courts, and damages, to name a few. Data-driven knowledge has replaced anecdotes and personal experience as the primary source of information.

As a result of all of this, you’ll be able to create an even more effective plan. These AI-powered tools help you comprehend previously ambiguous aspects of your case, such as how frequently your judge grants summary judgment motions or which court is ideal for your client’s case.

Your clients want to know about legal expenses and the tenure of the case, and they want to know what their chances are of a positive outcome. You used to take full advantage of what you had, but now you have more. That same data, those same insights—everything that aids in developing a superior case strategy also aids in providing confidence to your clients. Keeping them informed entails more than simply providing answers; it also entails instilling trust in you and your client’s future.

Thomson Reuters’ legal research product, Westlaw Edge, provides broader coverage of all federal and state courts. Lawyers can compare verdicts by judges, courts, and lawyers to uncover interesting trends, predict case outcomes, analyze IP filings, and research competitors.

Elimination of time-consuming tasks

Artificial intelligence and automation can take over up to 23% of a lawyer’s everyday tasks. Many of these activities are routine, paperwork-based duties that divert legal professionals’ attention away from the strategic demands of a case.

E-discovery is the most basic and widely used form of AI in law: checking digital information to collect non-privileged data on a case or claim. Lawyers can use e-discovery software to scan documents based on search terms or parameters like dates or geographic location. This extra time enables lawyers to gather more pertinent information. Like Kira Systems’, AI platforms enable lawyers to detect, retrieve, and evaluate data contained in huge volumes of contracts. This helps to generate contract summary charts for merger and acquisition due diligence.

LawGeex reviews contracts one at a time every day. It includes a list of contract clauses that must be rejected or accepted. When a document is uploaded into the software, the user only needs to select the clauses from the list, and the result tells us which clauses are existing or missing. Since June 2017, JPMorgan has used an AI-powered COIN program to decipher commercial loan agreements. Work that used to take 360,000 lawyer hours is now completed in seconds. The bank intends to use AI technology for other types of legal paperwork in the future.

Case Analysis Research Assistant, or CARA, is an artificial intelligence (AI) tool developed by Casetext that analyzes citations and lists specific suggested cases that are not explicitly cited in the document. Lawyers can use CARA to find relevant agencies in seconds and review cases that opposing counsel is likely to cite. CARA searches legal papers, statutory provisions, viewpoints, and editorials using a proprietary algorithm, allowing the average lawyer to investigate more proficiently without worrying about missing ideal cases.

High-quality work

Innovative software that isn’t tired or confused can produce error-free work. Specialized document software can improve document organization and maintain that organization, including all internal cross-references, throughout the document’s life. Contract comparison tools detect missing clauses, wrong terminology, or ambiguous terms through document comparison and automatic learning, both within a single file and across similar documents.

Automation of lower-level tasks

Automation of specific tasks helps lawyers have free time for client interaction and complex analysis of cases. It helps to increase the efficiency of law firms. Client interaction is an integral part of a lawyer’s profession. Automatic review of documents allows lawyers to discuss important matters with their clients, which helps get a favorable judgment. 

Law firms can use AI-based chatbots to handle their customers’ questions and concerns. These AI-powered chatbots can provide people with preliminary legal advice and assistance in bringing them on board. Chatbots can also buffer law firms and potential clients, collecting information before human engagement. If a client’s case requires legal assistance, these bots will refer them to a lawyer.

Accurate result prediction

Usually, lawyers have to predict the results for their clients to let them decide whether they want to pursue the case or opt for settlement out of court. 

AI developers are developing machine learning models to anticipate the outcomes of pending cases. Although such technologies are still in their infancy, they yield encouraging results. Some companies are developing a tax-law-focused AI-based legal prediction engine. They claim that their AI tool can accurately forecast the outcomes of ongoing cases with a 90% accuracy rate. These kinds of legal AI tools will change how law firms handle cases. Law firms will use such applications to develop litigation tactics, speed up settlement negotiations, and limit the number of cases that go to trial.

Accurate risk assessment

Technology-assisted review tools, such as predictive coding, can help examine data in real-time. This enables lawyers to find potential risks beforehand and prevent legal problems later. When a lawsuit is filed or even threatened, these intelligent solutions enable law firms to identify pertinent information and define the data and custodians that must be safeguarded. With AI, law firms can quickly determine outcomes, reducing costs and risks while defending their clients with more information.

Efficient and accurate background checking

A prominent part of a lawyer’s work is to perform exhaustive and extensive background checks for their clients or about them. These facts need to be evaluated for better decision-making and to support their cases. In law firms, AI can replace this tedious job to a large extent, and it can perform due diligence efficiently and accurately. 

For example, you wrote a memo or brief and then went over it again and again. It’s not the most efficient or cost-effective technique, and you’re unlikely to be able to charge your client for your perfectionism. However, you may now save time and money by reducing unbillable hours while improving your assurance that you haven’t forgotten anything. You can also use tools for studying legal documents powered by artificial intelligence to examine your papers in minute detail. This means you may rest assured that the memo or brief you’re submitting is flawless and that you haven’t overlooked anything.

You have credibility, and your sources and quotations have been checked. That assurance is unrivaled, but being able to verify your opponent’s work product with the same level of care is a close second. Did they misquote a case by accident (or otherwise)? Did they cite any claims that were later overturned? They may not have noticed, but you did. And it’s all because of AI, which has become the gold standard in law and legal research.

Reduced stress of legal professionals

Lawyers have to deal with multiple clients, review documents, do legal research, proofread, etc. It’s a pretty tedious job. The software helps to do the essential work so that lawyers can focus on creative analysis. It improves attorney work satisfaction. 

Tools help to complete tasks fast and accurately, and it also helps to save time and reduce the stress of lawyers. For example, accurate scheduling of major tasks is a huge help in completing them on time. If you’re the type of person who forgets things even when you write them down, you might benefit from using tools like email calendars. These calendars can send you notifications when events or deadlines are approaching. Furthermore, applications such as OneNote and Todoist can assist you in tracking your task completion progress.

Few things are more stressful or bewildering than forgetting a task until the last minute or missing a deadline. Thank heavens, there are apps to assist in dealing with it. RescueTime and Remember the Milk, for example, were created to remind users of important deadlines and motivate them to be more productive.

If technology continues to grow at the current rate, automation will quickly become a part of a lawyer’s daily routine. Although some may be concerned about this change, it provides a welcome relief from stress and fatigue. Apps like Case Text, for example, can help accelerate the legal research process. Billing is a time-consuming task, but apps like AllocateLegal, BillerAssist, and SmokeBall significantly reduce the time required to complete the process manually.

Remote work facility

Since the COVID-19 pandemic struck our lives, especially during the lockdown, almost every organization started working remotely. Law firms are no exception. The pandemic has forced the legal industry to change court practices and run fully digital, and AI has helped lawyers perform their jobs remotely. Today, the professionals in a firm can access documents from their homes and arrange a video meeting to analyze and decide on a case. 

According to the Legal Industry Report 2021: Lessons Learned from the pandemic, law firms have become more productive and efficient using new technology.  According to the survey, 82% of law firms reported that their businesses had fully reopened, and 77% of firms had no plans to reopen.

In terms of continued remote work, 53 percent of the participants said their firms would give the remote working option to lawyers and law firm staff once the offices reopened, and 70 percent said they would opt for the hybrid option once the offices reopened. As a direct result of the pandemic, nearly half (46 percent) of respondents said their companies invested in remote working software. This makes sense given that remote working tools were frequently the only way to get work done due to social distancing requirements.

Due to the pandemic, the most popular remote-working tools firms invested in were video conferencing tools, e-signature, law practice management software, time and billing software, and communication software. Law firms have used the following tools and strategies to get their job done. 

Virtual receptionists can answer client calls, but they can also do many other things:

• Online client payments – make it simple for the customers to pay with a credit card. 
• Practice management software – helps law firms use cloud computing with a multifaceted solution to manage and grow their firm!
• Outsource time-consuming tasks – use the time and talent of freelance lawyers to collaborate virtually to complete more work.

In the future, artificial intelligence could be utilized in the following areas:

Mergers and acquisitions

Get a single platform for the entire due diligence process, including reporting and documentation. Find clauses in multiple documents and get project management and reporting assistance.

Legal procedures

In a matter of seconds, combine your search terms with artificial intelligence to receive a quick overview. Optimize your search by determining which groups of papers you should examine to locate the needle in the haystack.

Reorganization of the group

Locate contracts that need to be renegotiated and moved without needing to be renegotiated.

Real estate investments

Data should be extracted and compared across leases. Get a quick summary of the contracts’ deadlines and differences.

The benefits of AI-assisted document review

• From the beginning, this process generates a quick and thorough overview of the data volume.
• It saves time reviewing vast amounts of data and uses resources wisely throughout the process.
• Provides a high-level perspective of the process.

Adverse effects in law firms of AI and machine learning

Artificial intelligence and machine learning do not always have positive effects. Law firms may also see the negative consequences of implementing AI discussed below. 

Professionals may experience unemployment 

One of the significant disadvantages of AI is replacing manual work. As a result, professionals associated with law firms can experience unemployment. According to Deloitte, about 100,000 legal-related jobs can be automated by 2036.  According to recent Deloitte Insight research, “technology has already led to a loss of 31,000 positions in the legal sector, but there has been an overall rise of around 80,000 jobs, the majority of which are higher qualified and better compensated,” in the legal field specifically.

At first appearance, “job loss” appears to be negative. However, it is an obvious advantage when the removed jobs cause a significant turnover and poor job satisfaction. This allows for the development of higher-skilled professions and increases employee value in ways that would be impossible to achieve without AI taking on some of the responsibilities.

Only big law firms can afford AI

Relatively smaller firms may not have the financial strength to adopt the new technology. Therefore, those law firms that can afford AI can become richer while others cannot. 

A solo law practitioner can purchase a digital or AI assistant for around $200 to manage work. A small firm will spend approximately $30,000 on software to manage time-consuming legal tasks such as workflow management and contract review. And if lawyers need a system that can handle 500 users, they are looking at $250,000, to begin with. There is then the cost of tech support after the initial setup.

Machines cannot be trustworthy

Minor damage to the machine or software can create a huge mess. Though AI could hypothetically be without error, there’s still no guarantee of a device or software being error-free. In the case of law firms, the potential damage could create havoc. The company has to bear the cost of installation in such a scenario. There are no rules or regulations to monitor AI tools. Plus, AI can’t listen, empathize, advocate, or understand politics. 

Vulnerable to cyber threats

Another cause for anxiety is privacy and cybersecurity, which is understandable. According to recent research conducted by a malpractice insurer, cyberattacks affected 22% of legal firms. The victims were more well-known figures in the industry than you might anticipate, but smaller businesses are not immune. According to the American Bar Association, this proportion was 35 percent among legal companies with 10 to 49 practitioners, implying that more than a third of small law businesses had been hacked.

Rather than being a liability, AI, according to CSO, adds to the fight against the continual threat of cyberattacks. AI technology incorporates self-learning algorithms that allow it to better recognize and foresee possible risks in ways that humans cannot.

What should law firms consider before using AI? 

Although legal automation has the potential to accomplish great things, it will take quite a bit of work to implement these technologies successfully: You’ll still need a “lawyer brain” to build different automation systems to execute particular things with automation. You may make several mistakes if the instructions at the time of configuration are incorrect. Waste goes in, and garbage goes out. Furthermore, as the law changes, some algorithms need to be changed. You can’t rely on a five-year-old legal opinion, and you certainly can’t rely on a five-year-old automated procedure.

As a result, you’ll need buy-in from those whose input you want to record through technology. This will necessitate knowledge and time. Most of the time, “translators” will be required between the legal brain and the legal technologists who integrate the software processes. Organizations must also have a firm grasp on their current procedures. If you automate a duplicative or defective process, you will be making multiple errors.

Perhaps most crucially, start with a change management strategy. What will be the method of presenting the technology to lawyers and clients? How will you motivate and encourage adoption both internally and externally? How will AI technology work with the existing systems and processes of the lawyer or law firm? What AIs will you use to track how the technology is being used?

To end this article, I would like to mention that more and more legal roles are being automated and replaced by artificial intelligence systems. Law firms have no choice but to accept this new technology. However, some people believe that manual reviewing is more accurate and better for lawyers. But, artificial intelligence systems can do work in much less time, and thus it is favorable when the main concern is performing a job in as little time as possible. Sound machines and software can perform a task accurately and fast. 

Through AI deployment, lawyers can have adequate time and patience to counsel their clients and improve their work. It can be said that deploying AI in law firms can provide positive momentum for the law firm, thus helping lawyers to work efficiently.

Lyle Solomon is the principal attorney at Oak View Law Group.