What is Legal AI and how is it transforming law firms?

Artificial intelligence (AI) is continuing to evolve at pace, offering a variety of benefits for businesses of all sizes. It has been quickly adopted by a wide variety of industries, with IT and telecommunications leading the way with an adoption rate of 29.5%, followed closely by the legal sector at 29.2%.

In 2023, a Goldman Sachs report suggested that 44% of legal work could be automated by generative artificial intelligence (GenAI) in the near future. Surprisingly, their 2024 report completely omits the legal sector, perhaps suggesting that this statistic was somewhat inflated. However, the high adoption rates show that many have recognised the value of using AI in law firms.

In this article, we’re to explore the relationship between AI and law firms, and the ways in which this developing technology can support efficiency, decision making and client support.

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Written by Clare Bonsall, Head of Product at Access Legal.

What is AI?
Are there laws for artificial intelligence?
How is AI being used in law firms?
The future of AI and law firms

What is AI?

Artificial intelligence (AI) is a type of technology that uses computer algorithms to interact with data in a manner resembling that of a human. For example, it can understand written language and analyse data to make predictions, categorise information, perform automated tasks, or even generate content. AI is trained by inputting large amounts of data, which the tool analyses to identify correlations and patterns that it then uses to predict outcomes.

There are three main types of AI, which we’ll explore in more detail below.

1. Natural language processing

Natural language processing (NLP) refers to a type of software that is able to read and understand ‘natural’ language rather than requiring specific prompts. This includes both casual, conversational language that people would use when speaking to each other in person, as well as more complex written documents.

2. Machine learning

Machine learning (ML) is a type of software that is able to ‘learn’ over time. It does this by using algorithms to analyse data and identify patterns, allowing it to make decisions and predictions. By comparing the predictions to known outcomes, the algorithms can make changes to increase their accuracy.

3. Generative AI

Generative AI (GenAI) is the type of technology used by tools such as ChatGPT. It is able to respond to a prompt by generating text, images, video and other outputs. It incorporates elements of machine learning by analysing the patterns and structures of the data it is trained on, and using this to generate data with similar characteristics. The Law Society has a great resource for generative AI in law firms that we recommend exploring.

Are there laws for artificial intelligence?

Although many existing laws such as the GDPR and Data Protection Act 2018 are relevant to its use, there currently aren’t many laws specific to AI. However, as the technology has continued to evolve, so have global regulations.

The EU Artificial Intelligence Act was the world’s first comprehensive regulation on AI. It came into effect on 1 August 2024, with provisions gradually coming into operation over the next 6 to 36 months. The AI Act aims to manage the associated risks by prohibiting unacceptable usage of the technology, assigning legal responsibility, addressing copyright concerns, and outlining compliance requirements to regulate the use of AI throughout the European Union.

While it’s a relatively new technology, the rate at which artificial intelligence is developing, as well as the fast adoption by a wide range of sectors, means that existing laws and regulations aren’t sufficient to cover the expanding use cases of AI. As artificial intelligence is developed and adopted by more and more industries, global authorities will need to create more comprehensive regulatory practices to protect privacy and security, and minimise risks.

How is AI being used in law firms?

Let’s explore some of the applications of AI in law firms, and the benefits they offer.

1. Efficiency and automation

AI is able to quickly highlight key clauses and potential issues in contracts, making management more efficient. Machine learning tools can also help to automate document retrieval and review processes by using classification models, saving time on simple administrative tasks. These efficiencies free up legal professionals to focus on higher-value work.

2. Enhanced legal research

Machine learning supports legal research by quickly analysing vast amounts of information, identifying relevant case law and extracting key insights. Similarly, GenAI can accelerate drafting by creating content within specified parameters, enhancing the speed and accuracy of legal document preparation.

3. Predictive analytics

AI in law firms can assess the likelihood of a particular outcome by analysing past verdicts and negotiations. This helps them to meet the expectations of a competitive market by leveraging predictive insights and making data-driven decisions.

4. Litigation and e-discovery

AI tools can support your legal firm by gathering data and insights when preparing evidence for litigation, significantly enhancing e-discovery efficiency. By being able to scrape huge volumes of data, AI reduces the time and costs associated with traditional evidence review processes.

5. Improved client experience

There are many implementations of AI that can help your legal firm to increase response times and improve client engagement. For example, adding a chatbot or virtual assistant to your website to answer common questions instantly. The automation capabilities of AI can also help legal professionals to spend less time on repetitive tasks and more time building client relationships.

The future of AI and law firms

Whether AI law firms will shape the future of the sector is yet to be seen. However, it’s clear that artificial intelligence has many useful applications to support both legal firms and their clients. When used effectively and responsibly, AI technology can help practices to nurture stronger client relationships and expand their service offering without requiring additional resources.

If you’re looking for more advice about the use of AI in law firms, talk to one of our experts, who will be happy to answer any questions you may have.