It’s the end of the legal industry as we know it and I feel fine. I really do.
The legal industry as we know it is already over. The seismic event that triggered this evolutionary shift happened in November 2022. There’s no going back to a pre-genAI world. Change, incremental or otherwise, will be unstoppable. The only question is: at what pace will this change happen?
It’s clear that substantive change at the heart of the legal economy may take a long time – and we should never underestimate the challenge of overturning decades of deeply embedded cultural practices – but, at least it has begun.
Optimists may hope that the legal sector will ‘heal itself’ and that real evolution, supported with genAI and other tech, will come from within. And there are plenty of people working inside law firms right now – hello there! – who are supportive of this scenario. That said, most know such accelerated shifts may not occur any time soon.
Others may simply see change as inevitable in the long-term because the legal sector, which is just a small splinter of the global economic pie chart (i.e. around $1 trillion in value out of $100 trillion of total global economic output), cannot be immune to the evolution of technology use in how a business operates. I.e. legal, which is just 1% of the economy – and relies upon the rest of the world for its clients – cannot hold out against this 99%.
Just consider the billions flowing into genAI and related projects at OpenAI, Anthropic, Microsoft, Google, Meta, Amazon and many other companies. And that’s before you drill down into sector-specific activity in the legal tech world, or AI-based investment taking place in other verticals. Things are happening.
Moreover, law firms that at best paid lip service to tinkering with the first wave of machine learning NLP-based AI from the mid-2010s are now actively reaching out to engage with genAI in ways that turn the old idea that ‘lawyers don’t like innovation’ completely on its head. They do this because there is value there.
Whether we are looking at law firms leveraging specific legal tech tools that utilise genAI, or ‘build your own’ projects based on a foundation model, or just tapping directly into Copilot, and for many smaller firms not even having that and just using ‘raw’ ChatGPT, then there has been a huge amount of genAI use already in the legal world.
Inhouse teams are also embracing this tech. One large company this site met recently had built their own LLM-based tool and was leveraging several other tools inhouse. The net result was process work was getting soaked up by AI and they were spending more time adding value to the business.
This is great to see. In which case, why the words of caution? Why may it take a long time to really drive substantive change at an economic level across the legal sector, and especially within Big Law, both on the buy and sell side?
Systemic Change With A Long Gestation
Although we tend to think in terms of ‘arrival of new tech / arrival of new perceptions -> end of old approach -> resulting in rapid and total change’, the reality is often very different.
Take the energy sector, for example. As soon as the scientific community and most world governments agreed that global warming is primarily caused by burning fossil fuels, circa the late-1990s, oil, coal and gas were living on borrowed time, while the use of renewables would clearly grow and grow.
For them, the energy sector as they knew it was already over. The question, as with legal, was all about the pace of change.
But, if you were hoping for a Hollywood ending with Greta Thunberg clambering over the oil company barricades and triumphantly announcing a new dawn for green energy by 2020, with all 8 billion people on the planet moving over to solar and wind in one huge shift…..then you know already that has not happened.
While investment in oil and gas is lower now than a decade ago, the IAE reports that in 2023 over $1.1 trillion was still sunk into those polluting energy sources in that year alone. Meanwhile, renewables are growing steadily and last year investments totalled over $770 billion, and solar panel costs have decreased by 30% over the last two years. At the same time just under 18% of all new car sales in the UK are EVs, which is great, but that means that 82% of new vehicles on the road are still burning oil, even now in 2024.
In short, it is a picture of change, but taking place over many years; yet one that when it’s completed will be totally transformative.
It’s a future in the shape of one of those charts they show on the TV business news segment that projects far ahead with a dotted line to show that the analysts are really not sure. Yet, if you were asked if the UK, for example, would still be reliant on oil and gas in 100 years, i.e. 2124, no doubt you’d say: no way. If that was changed to when ‘will the end of oil use in the UK be in five years?’, you’d also say: no way. The truth is somewhere in that gap in the middle.
We’d therefore be naïve to believe entrenched patterns in the legal world will be overturned in a couple of years….even as genAI’s use grows and grows, and produces a wide range of positive results for all involved.
Legal Pharaohs + Their Pyramids
Why is that? The short answer is that lawyers (as explored in the Artificial Lawyer article ‘Lawyers Will Need To Be Capitalists In The Age Of AI) have not yet truly accepted that the world has changed and a new business model is fast approaching – but will need to.
Many … (most…?)… are still operating as if tons of manual legal labour, packaged up, then bought and sold on the basis of time taken, to review a document, find a better clause, find some case law, etc, can be the way things will always operate. But, it won’t be.
And it’s no surprise that this is the case. It’s worked well for law firms and the buyers (who were educated and formed inside law firms), who rarely see a problem with this, even now. I.e. just because you’re holding in your hands an incredible invention with tremendous productivity powers such as genAI, doesn’t mean you’ll intentionally use it to its full extent.
As the economist Yanis Varoufakis postulated in his pioneering book ‘Technofeudalism’, if the Ancient Egyptians had developed the steam engine, rather than it changing the course of history, the Pharaohs would have installed one in their palace as an amusement and never tapped its full potential.
Why? Because the Egyptians were deeply wedded to manual labour, and because of the way their pyramidal society (sorry, had to get that in there….) was formed, they had a lot of it on tap. The Nile valley’s fertile land produced huge agricultural riches and the river never stopped flowing, meanwhile the nation was protected by the sea and the desert, i.e. it had a ‘moat’ of sorts on all sides. All they had to do was just keep that pyramid society going……
Now, does that remind you of anyone?
In short, they had no need to change…not for quite some time. Nor would they have felt the need to embrace a possible industrial revolution even if one were possible back then. Or, to rephrase the famous saying: ‘How do you tell a room full of Pharaohs that they’re doing something wrong?’
Of course, eventually the ‘let’s throw hundreds of manual labourers at every problem’ approach went out of date. It got superseded by successive waves of industrialisation, first steam, then the arrival of electricity, then the first wave of digitisation, and now AI.
Be Real, Stay Hopeful and Keep Focused
Now, you might see this as a delay to one’s hopes. And it is. But, it’s better to be realistic and seek to drive real and lasting change than expect some overnight miracle that converts a pre-industrial profession into a post-modern AI-based service vertical in a couple of years. It just isn’t going to happen that way.
So, how do we maintain a positive outlook in the face of what will be a long road ahead? We may need to visualise the end we are trying to get to, then work towards it. The goal would be a world where billable time is used only in the most complex, one-off elements of a piece of legal work; where clients pay for value of the end product to their business – not the time taken in the manufacturing process; and where buyers embrace that approach as well.
(And it may also be a world where access to justice has expanded…!)
That is a world where lawyers can be lawyers, not taxi meters bogged down in manual labour because that’s the way this profession has chosen to denominate its work product. This site would argue that this future is a better one than the reality we have today. And it’s one worth working toward, no matter what the obstacles in the way.
And, with genAI, we now have a means to get there.
So, as mentioned, it’s the end of the legal industry as we know it and I feel fine. I really do.
Richard Tromans, Founder, Artificial Lawyer, Nov 2024.
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