The legal sector is navigating a complex landscape regarding artificial intelligence, with firms exhibiting different approaches captured by the acronyms FOMO (fear of missing out) and FOJI (fear of joining in). This situation is also characterized by FUD (fear, uncertainty, and doubt) as leading law firms evaluate the threats and opportunities presented by generative AI tools like ChatGPT, which was launched in November 2022. Experts like Beckhaus identify this period as a watershed moment for the legal industry, where the availability of such tools allows everyone to directly experience AI's potential.
While some firms, like Ashurst, have been utilizing AI for several years, the latest large language models offer a "leapfrogging opportunity." The adoption of AI is largely beneficial for law firms that have structured their vast linguistic data (documents and knowhow) into formats easily processed by algorithms. Linklaters, for instance, has consolidated its data onto a secure, searchable platform. A crucial task for law firms is to train generative AI with controlled and verified data to mitigate the risk of "hallucinations" or erroneous outputs common in many general AI chatbots. Haig Tyler suggests that elaborate modifications are necessary for large language models within the legal context.
The industry's response to generative AI has been remarkably swift compared to its historical reluctance regarding technological adoption. Firms like Ashurst report 60% daily AI usage among their workforce. This shift reflects a change in mindset among legal leaders, who are now more proactive. DLA Piper's Frank Ryan stated, "We came at it saying, why not be at the epicentre of what is happening." This increased appetite for innovation is also influencing traditional norms such as hourly billing and partner-owned equity, as AI accelerates the commoditization of certain practice areas, leading firms to explore new pricing models. The evolving landscape also necessitates a greater reliance on data and tech specialists within legal teams, and the term "non-lawyer" is falling out of favor as business service professionals take on client-facing roles.
In-house legal departments, traditionally seen as technology laggards, are now enthusiastic early adopters, recognizing that information-dense legal tasks are ideal for AI-powered automation. A key decision for these teams is whether to build AI tools internally or acquire them from third-party suppliers. Companies like HPE, especially those in the tech sector, benefit from building in-house by gaining control over data, minimizing sensitive information leaks, and being able to quickly fix errors or "hallucinations." Building bespoke tools has also proven "significantly" cheaper than third-party options, which can cost "thousands of dollars per user, per year." However, for legal departments with limited IT resources and smaller teams, or those lacking basic legal IT infrastructure, building from scratch may be impractical.
Despite the varying approaches, there's a consensus that generative AI is a "game-changer," not just another tool. Research by RSGI for the FT Innovative Lawyers Europe 2023 report found that over 90% of legal professionals who used ChatGPT believe it will significantly impact legal advice delivery. This includes reassessing future trainee numbers, as generative AI is expected to replace many tasks traditionally performed by lawyers. The ability of AI to produce content and language is considered revolutionary. While some firms remain cautious due to AI's inaccuracies and "hallucinations," others, like Pinsent Masons' Morrison, warn that firms failing to embrace AI now risk being left behind, likening generative AI to a giant excavator compared to handheld shovels, enabling the delivery of legal solutions at scale.
