Just 10% of law firms and 21% of corporate legal teams have now implemented policies to guide their organisation’s use of generative AI, according to a report out today (2 December) from Thomson Reuters.
While Thomson Reuters 2024 Generative AI in Professional Services report shows AI views among legal professionals are rapidly shifting (85% of law firms and corporate legal teams now think AI can be applied to their work) the report shows that legal organisations have a way to go in terms of setting the ground rules for the use of AI. Just 8% said that GenAI is covered under their existing technology policy, while 75% of firms said they don’t have a policy and 7% said they don’t know.
The report found that 12% of law firms and corporate legal teams already using legal-specific AI and a further 43% planning to do so within the next three years. While 27% of law firms and corporate legal teams already use public AI tools such as ChatGPT, the rate of further adoption over the next three years is far less than industry-specific AI, with just 20% of legal respondents planning to make use of such tools.
“The percentage of law firms who say they have no current plans to use AI technology has fallen by almost a third from 60% to 42% of firms in the last year alone,” said John Shatwell, head of Legal Professionals Europe, Thomson Reuters. “Some hesitancy within the profession is still present, yet the rate at which it’s reducing is remarkable.”
The survey was conducted several months ago, in January and February this year, via an online survey with 1128 respondents.
While the industry’s overarching sentiment towards AI is positive, 77% of legal professionals said they were wary of AI’s threat of the unauthorised practice of law. This includes concerns around the risks that AI poses to the mishandling of confidential client information, citing of fake cases and other hallucinations’ (creating false information) that could threaten the ethical and regulatory standards that human lawyers adhere to in legal practice.
“As the technology continues to gain prominence across industries, legal professionals are grappling with a unique concern: the unauthorised practice of law,” noted Shatwell. “AI is gaining increasing capabilities to undertake legal tasks. In tandem with these developments, the profession must continue its efforts to rapidly put in place the internal processes and guardrails to ensure the safe and controlled use of AI in the field.”
In terms of who will bear the cost of firms’ investments in AI, 25% of law firms plan to pass along the cost of their investment in AI tools to clients (either across the board or on a case-by-case basis), while 51% plan to absorb the cost as an overhead.
39% of law firms believe that AI will lead to an increase in alternative fee arrangements as the billable hour model may likely no longer be sufficient to capture the “value-add” to a client from a law firm’s AI tool.
“Rather than threaten existing roles, legal professionals expect AI to prompt the creation of entirely new roles. We are already seeing this trend emerge across the largest law firms,” said Shatwell. “These senior and even partner-level roles are heavily focussed on the implementation of AI tools, the leading of specifically trained teams who can shape a firm’s embrace of the technology and ensure its safe and regulated use.”
See also:
Clifford Chance’s early Generative AI and Copilot journey – The inside view