How will generative AI disrupt the legal industry?

As the legal industry continues to rapidly evolve, it is clear that generative AI will revolutionize the way legal services are delivered. From streamlining the contract review process to automating document discovery, generative AI is already being used to improve execution efficiency and reduce operational costs in the legal industry. However, this is just the tip of the iceberg of the potential impact of AI technology. With the continuous advancement of AI, it is even expected to completely change the way lawyers work and subvert the underlying structure of the legal industry.

Please note that the above content is not written by the editor, but is automatically generated by ChatGPT according to the following tips:

In the style of Forbes contributor xxx, write the opening paragraph for your article on how transformative generative AI is upending the legal industry.

ChatGPT output the above answer in a few seconds, and it shook us deeply for days. Undoubtedly, friends who have experienced OpenAI ChatGPT, DALL-E 2 or other generative AI tools must have similar reactions. And this is just the beginning…

OpenAI CEO Sam Altman believes that the current version of GPT is far from being truly mature. He recently tweeted, “ChatGPT has significant limitations, but is good enough in some respects that it can even give a strongly misleading impression. It’s not a good time to rely on it for anything important. It’s just technology A preview of progress, we still have a lot of work to do in terms of robustness and realism.”

Perhaps the “cold water” poured by Altman is to remind everyone that ChatGPT is still only a prototype. He is well aware that this model occasionally makes factual mistakes and often speaks nonsense. Perhaps, he wants to throw out the first problem, and then make significant improvements through the upcoming GPT-4.

Rob Toews, a technical writer who focuses on AI developments, wrote, “The recent hype around ChatGPT has been called crazy, and this is just a warm-up project before GPT-4 is on the stage.” Toews predicts that the new version may have multimodal capabilities-in addition to text In addition, it is capable of processing images, video, and other data modalities. This means that the model can generate an image or video from an input text prompt, and it can in turn produce an answer in text format from an input image or video.

Advances in AI technology are not limited to generative AI. In the field of machine learning, prediction and decision-based models are formed by running training algorithms based on multiple large-scale data sets. RegulaAltion’s AIR Platform and other technologies that have been listed in succession are representative of them. AIR supports multi-service collaboration across large data sets and can quickly build more powerful AI models. Traditional barriers to privacy, traceability, trust, and security are resolved with features like decentralized peer-to-peer computing and blockchain/smart contracts. This enables data owners to share insights from the data without moving or relinquishing custody/control.

Under the hype, what is the truth?

ChatGPT is causing a stir for many reasons. It makes AI technology accessible, practical, easy to learn and widely applicable to users who lack relevant background for the first time. It can provide detailed and intelligent answers in comprehensive knowledge areas, and has the advantages of being fast, knowledgeable, fluent, and thoughtful, and can provide nuanced responses to complex problems. Its mastery of content, as well as its level of understanding of a particular style of expression or literary technique, is equally impressive.

Unlike search engines like Google that provide filterable, relevancy-vetted lists of comprehensive resources, ChatGPT organizes, integrates, aggregates, and produces grammatically correct, well-expressed, usable output across multiple disciplines in seconds .

ChatGPT caused such a sensation, in fact, there are deeper reasons. It is a tool that pushes technological capabilities into the realm of human creativity, blurring the boundaries between machines and humans for the first time. It doesn’t require any coding skills or disciplinary background to use it, and it can start broad or deep “dialogues” entirely on prompt. More importantly, its response also shone with humanity.

ChatGPT really surprised the whole world. In an era of increasingly rapid and unstoppable changes, ChatGPT stands out with its excellent scope, speed and intelligence. What’s exciting about it is also what’s creepy about it, and it’s no wonder that it elicits so much awe, fear, and excitement all at once.

ChatGPT dominates news headlines

Since the prototype was released by San Francisco-based OpenAI on November 30, 2022, ChatGPT is rapidly gaining popularity. It also welcomed 1 million users within five days of its release, and the growth rate was so fast that user access was often delayed due to high server load.

The New York Times reported that Google CEO Sundar Pichai therefore issued a “code red” in response to the threat ChatGPT posed to Google’s search business. A Financial Times article reported that Microsoft has already spent $3 billion on OpenAI and is in talks to spend another $10 billion. When technology giants respond with practical actions, the entire business community and the world will inevitably be shocked.

According to the introduction of the technical column, generative AI can not only answer complex questions covering various knowledge fields, but also integrate these knowledge bases. Given the right prompts, it can bridge the interdisciplinary “connection dots” that are a must-have skill for high-end talent in today’s market. It can write and debug computer programs, compose music, compose and grade student papers (which has caused consternation in the education system and academia) and even compose poetry. The scientists used an earlier version of GPT to create new protein sequences. What’s more, according to OpenAI, this is just the beginning…

Leading consulting service companies have also keenly captured this trend, with McKinsey declaring that generative AI tools such as GPT and other technological advances will fundamentally disrupt existing businesses. They also identified a wide range of use cases for it: Marketing & Sales, Operations IT/Engineering, Risk & Legal, Human Resources, Simplified Customer Service, etc. However, the power of machines alone is not enough to eliminate maliciousness, which requires a human element to enter. This processing loop, jointly constructed by humans and machines, is a critical but often underestimated component of digital transformation.

Generative AI, along with other tools such as robotics and data insights enabling platforms, have the potential to improve business and the human experience. But realizing that potential requires investing in people—change management, cultural fit, lifelong learning, diversity, new hiring standards, upskilling, cross-functional workforces, supply chain integration, and more.

The accelerating pace of technological change has increased the importance and urgency of these tasks. Large enterprises are trying to invest in the human element of digital transformation, and they clearly know that the success of the digital journey depends not only on technology and data analysis, but also on people’s adaptability, creativity, curiosity, agile collaboration and teamwork. The legal function has an important role to play in this process, so it must lead, not lag. But how do you get ahead?

How does the legal industry embrace tools such as GPT?

The legal profession has always been difficult to coordinate, but it is quite united in resisting change. Traditional stakeholders in the law—including lifelong learners, law firm partners, corporate counsel, judges, and regulators—are united in their opposition to major change. Everyone has their own reasons for rejection, but what they have in common is that they talk about “innovation” all the time, but they firmly defend the status quo. The incremental changes they acquiesce to never benefit end users or the general public.

Law is also one of the last handicraft industries of the digital age. Public trust in lawyers is declining – opaque, extremely slow, protracted, costly, lawyer-centered, judicial process fraught with uncertainty, etc.; graduates; the judiciary itself has begun to become a crisis-inducing factor, eroding the foundations of the rule of law, and even shaking the operating premise of a democratic society. But today’s legal industry has no choice, and the era of turbulence is bound to come and has come.

The legal market is divided into two distinct categories: civil law (for individuals and SMEs) and corporate law (for large corporations and wealthy individuals). In the short term, ChatGPT has different impacts on the two, and it is mainly reflected in the civil law level. If tools like ChatGPT can remain open and cost-effective, legal services will truly be democratized, changing the role of lawyers, and impacting the antiquated judicial system.

The eminent “legal futurist” Richard Susskind once stated, “Here we see a recipe for global justice problems—new tools that will enable people without legal knowledge to understand and assert their legal rights; enable people to Being able to draft documents on my own, getting legal guidance and assessing my own legal risks without a lawyer. It’s just getting started, but the path ahead is clearly visible.”

ChatGPT builds on and expands on the pioneering work of civil law services companies such as Legal Zoom, Rocket Lawyer, and DoNotPay, all pioneers in trying to use technology to expand access to fast, low-cost, legally compliant assistance. ChatGPT brings more powerful tools to users, which can be easily used without professional background. It can help people save on the cost of hiring a lawyer, eliminate uncertainty, and help demystify legal process and judicial language.

Leaving aside the positive significance of the civil law, the business community, especially the bar association, is obviously unlikely to have such broad enthusiasm for ChatGPT that shakes the foundation of its own interests.

Practitioners on the enterprise side are mainly divided into law firms and company (internal) legal teams. There are huge differences between the two in terms of purpose, mindset, relationship with customers, success metrics and economic positioning. The company’s legal team often has a better understanding of the company’s actual situation, leadership style, risk status, supply chain system, business strategy, economy, product/service and other specific risk factors than external consultants.

Corporate legal teams, especially at the top, are increasingly clustered around business leaders with legal backgrounds. They are no longer “lawyers” in the traditional sense, they understand the language of business, they have the ability to act cross-functionally, they have established relationships with the executive team and key business managers, and they are part of the business structure. “Cooperate with customers” is by no means a simple slogan for them, but the real reality. “Alignment”, “teamwork”, “value creation”, “digital transformation”, “skilling” and “agility” are also self-learning goals that these practitioners must achieve.

Most corporate legal teams would be wary and curious to classify tools like ChatGPT as “tools for drafting,” at least initially. And top teams, such as the DXC legal team led by Bill Deckelman, have long realized the importance of combining professional lawyers, outsourcing experts and digital technology. Deckelman welcomes the impact generative AI might have on the legal field. He shared, “ChatGPT represents a paradigm shift in AI, and more advanced models will soon emerge. The application of generative AI technology will have the potential to subvert traditional legal practice models.”

But most law firms will regard tools like ChatGPT as an evil force that destroys their jobs, and future clients will definitely not want to pay to help law firms train those interns. As a result, they employ “scare tactics” against customers, warning them of the unpredictable and inaccurate potential risks of these new, relatively untested technologies. This short-sighted, self-serving defensive behavior may lead some legal teams to deliberately limit the use of generative AI tools and insist on a “lawyer oversight” approach. Of course, none of this is new – from the early days of email and e-discovery to the broader digital transformation, the reaction of a considerable number of law firms has been passive and conservative.

A managing partner revealed, “The law firm will be forced to accept only after the big clients put pressure on it. But what they do is not to really invest in the implied value, but to use fancy face engineering to fool In the past.” This kind of willfully short-sighted mentality is very common in the field of law firms, and it is not difficult to understand why. In short, this resistance will eventually dissipate as customers exert greater pressure to change and/or asymmetric competitors enter the legitimate market.

From another perspective, whoever can take the initiative to embrace the future will stand out in terms of talent recruitment, customer attraction and business expansion. Specific ideas include:

> Invest in establishing new areas of practice (e.g. generative AI, data agility, and other emerging areas);

> Provide ‘cutting-edge’ career opportunities in law, business and technology, attracting top talent from multiple disciplines;

> Freeing lawyers from the “drudgery” that generative AI can do faster, more efficiently, and even more reliably and better;

> Invest in agile training and upskilling to proactively identify and prepare for new opportunities;

> Build customer-driven solutions that advance business goals and enhance the customer experience, rather than simply dealing with “legal process”.

Joe Andrew, chairman of the world’s largest multinational law firm, once said, “When large law firms begin to adopt new technologies, they can not only provide better services to clients, but also are expected to attract the best talents in a way that reduces costs. Legal procedures The drudgery in the traditional sense of the law will be replaced by a high degree of automation, and the future fate of each law firm will actually depend on what talents it can attract and retain.”

Tech giants such as Amazon, Microsoft, and Google, as well as the Big Four accounting firms, will also increasingly become important players in discussions about industry transformation. Ernst & Young recently spun off its consulting business from the audit function, and announced that the consulting business will be transformed from a partnership model to a pure company model. Obviously, they can create cutting-edge technology platforms such as generative AI for large enterprises through cooperation with technology giants, align legal functions with enterprises, employees, customers and supply chains, and promote corporate ESG/DEI (environmental, social and Corporate Governance/Diversity, Equity, Inclusion) etc.

Tech giants will likely choose to leverage their technological prowess and expand their existing footprints in the legal industry. They have mastered the brand, capital, data, customer base, competitive capital, professional knowledge, talents, vision and transformation experience, which will fundamentally change the entire legal industry and reshape the legal system we are familiar with. Of course, all this will not eliminate the professional group of lawyers, but it will undoubtedly change their roles, tasks, organizational and economic models, educational background, training and client orientation.

Summarize

Platforms such as generative AI, data analysis, robotics, and metaverse are currently only business and social tools, and have not been accepted as “legal technology.” But they will soon become a widely used, universally accepted and integral part of business and society. This will bring all-round pressure to the legal industry, forcing them to either accept and transform into a new form under the new ecology, or be crushed by ruthless market competition. And, that day will come sooner than most lawyers. The reason why this will become a historical inevitability is that, in addition to conservative lawyers themselves, this is great news for business and society, and it will also be an excellent opportunity to unleash the full potential of the legal function.