Lawyers’ use of generative AI “accelerating quickly”

AI: Most will adopt the technology soon

Lawyers’ use of generative AI is accelerating quickly but there is a major mismatch between in-house and private practice expectations of the impact on billing, new research has found.

More than a third (39%) of all respondents, and 62% of those at law firms, said their organisation had made a change to their day-to-day operations as a result of generative AI.

“The latter half of 2023 saw generative AI transition from theory into practice. Leading law firms and in-house legal teams moved at pace to incorporate generative AI into their internal processes and external offerings,” said LexisNexis.

It polled 1,225 lawyers at law firms of all sizes, in-house, the Bar and at academic institutions last month, six months on from a similar survey.

Just over a quarter (26%) were currently using generative AI tools on at least a monthly basis – up from 11% in July 2023 – with the figure rising to 32% at large law firms. But only 3% were using it every day, with 11% every week.

A further 35% of respondents had plans to use the technology in the near future. The proportion of respondents with no plans to adopt generative AI dropped from 61% to 39% in six months.

“While these AI adoption figures aren’t staggeringly high, for the risk-averse legal profession, they represent a huge shift,” the report said.

Asked how they planned to use generative AI in the immediate future, respondents identified their priorities as drafting legal documents (91%, up from 59% in July 2023) and research (90%, up from 66%).

Relying on generative AI tools to draft emails or other communication-based tasks was also listed by 73% of respondents (up from 33%).

More complex tasks such as contract analytics (53%), connecting generative AI to case management (50%), or real-time comparisons of law across jurisdictions (45%) were also on the priority list.

The most common changes to day-to-day operations included launching an AI-powered product for internal use (15%), carrying out AI-related training for staff (11%) and developing policies on the use of generative AI (11%).

The report said: “Large- and medium- sized firms were the most likely to have made some sort of change, with only 29% of respondents revealing their firm had done none of the above. In-house teams were the most likely to have launched an AI-powered product for internal use, at 22%.”

The survey found that the biggest hurdles to AI adoption were concerns over hallucinations (57%), security (55%), and a lack of trust in the current free-to-use technology (55%).

LexisNexis cited concerns about accuracy as the reason why the proportion of in-house lawyers expecting their external counsel to use generative AI fell from 70% last July to 57%.

Just over half (52%) of in-house counsel expect bills to be reduced as a result of generative AI, compared to 40% of those at law firms, rising to 53% of large firm lawyers.

“There was a stark contrast in opinion when it came to restructuring pricing as a result of AI. Nearly two-thirds (62%) of in-house legal teams said they expect law firms to make changes to billing practices as a result of generative AI.

“However, only 18% of law firms said they will make changes to billing practices – despite 42% believing it will reduce overall costs for the firm and 30% believing it will increase hours billed.”

Only 10% of respondents expected AI to bring an end to hourly billing, with 41% disagreeing and the rest sitting on the fence.

The report quoted John Quinn, founder and chairman of international litigation firm Quinn Emanuel Urquhart & Sullivan, as saying: “The whole economic underpinnings of law firms and how clients are charged are going to have to change. They are not geared towards large teams of lawyers…

“There will be less need and demand for associates at firms. What we’re going to need is lawyers who are more capable with generative AI, and who are better at engineering and designing prompts for artificial intelligence programmes.”

The report concluded: “For a centuries-old profession, the level of excitement we’re seeing for generative AI in the legal community is completely unprecedented…

“However, many are still cautious about the risks that come alongside this increasingly popular technology – and rightly so. A welcome solution to this challenge will be generative AI tools that are grounded in reliable legal sources. This will enable lawyers to carry out a range of tasks with confidence.”


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