According to the research charity IPRR, up to 8 million jobs in the UK at a risk from AI unless the technological change is managed properly. Goldman Sachs predicts that 44% of legal tasks will be replaced by AI. Goldman Sachs also predicts that generative AI could raise global GDP by 7%.
The key question is then, how can we use innovation to create new roles, new employment prospects which will enhance productivity, and foster economic advantages for everyone?
Last year I produced a short video https://simmons-simmons.wistia.com/medias/k70a8ptase?customize_panel=true welcoming our team from around the world to our Global DR Retreat in fluent French, German, Spanish and numerous other world languages. It was definitely my voice, synched to the movement of my lips. Except of course it wasn’t actually me – I can happily manage a welcome message in fluent Greek or English, but this was actually a scarily realistic AI-generated version of me, neatly illustrating the power of AI.
The evolving legal landscape
On the evolution of law firms, and how their business models have developed and might now change, a paper by the Cambridge Strategy Group called the “The Sixth Generation law firm / Law firm business models in the age of digitally-enabled legal services” is well worth a read. I was struck by the concept that we are about to embark on our 6th generation of law firm – a model described as “digitally enabled legal services”. The models through the ages are:
First Generation (1840-1900): Traditional law firms that relied on personal relationships and reputation to attract clients. Have we moved on from that?
Second Generation (1900-1945): Firms that began to focus on building a brand and expanding their geographic reach. The defining characteristic of this era was the creation of the timesheet and the billable hour.
Third Generation (1945-1990): Firms that embraced technology to improve efficiency and began to specialise in specific areas of law.
Fourth Generation (1990-2010): Firms that adopted a more corporate structure and focused on profitability and growth. By now we have the World Wide Web, websites, emails Personal computers, laptops, intranets/network and global law firms start to emerge.
Fifth Generation (2010-2022): Firms that embraced alternative business models, such as outsourcing and flexible working arrangements.
Sixth Generation: Firms that are fully embracing digital technology and using data analytics to drive decision-making and improve client service.
Core to a transition into that 6th generation model is an embedding of truly sophisticated digital solutions within the delivery of legal services, where the focus becomes the delivery of outputs and outcomes for clients.
We will likely see a fundamental change to
how legal services can be delivered;
what services clients will require (as opposed to being able to self-serve);
how such services will be valued; and
how the seamless integration of technology into the legal delivery workflow will be anticipated as a norm rather than seen as a basis of differentiation between firms. Of course though, it will clearly be a differentiator in the short term.
The implications are potentially dramatic:
Pricing for legal services will have to evolve. The billable hour was justifiable when it was hard otherwise to find a basis for charging and measure the work done, but law firms will have to evolve not least because:
clients will no longer pay for certain services, particularly where these can be automated;
Where AI will be doing some of the work, rather than human lawyers, "outcome based" charging may be more appropriate;
there will need to be some basis for recovering the cost of technology investments (e.g. in knowledge assets);
it will no longer be in a law firm’s favour not to evolve the model.
New skill sets will need to be introduced into the legal landscape, either by up-skilling existing lawyers or by bringing in new types of expertise.
The appetite for risk will need to evolve – do clients want cost efficiencies or an absolute certainty around risk management, and what is reasonable to expect from legal advisors?
Firms will be delineated into the haves and have nots. Firms at scale will have an advantage to be able to invest in new models, however the agility of smaller firms may give an advantage in terms of pace of change and adoption. Potentially those firms and institutions with well curated and deep knowledge assets could create meaningful barriers to other firms as they embed themselves into client relationships.
The knowledge of ‘the law’ will be assumed rather than seen as a basis of competition – as such the quality of service (speed, efficiency and broader commercial awareness) will be the basis of competition.
Judicial Expectations and Technology Integration
We have seen some significant technological advancements in the court system; as a construction disputes lawyer by day I am closely connected to the Technology and Construction Court, which is a flagship court that other jurisdictions really look up to. Long gone, thankfully, are the days of hand pagination, with e-bundles now the norm. Electronic filing has streamlined court communications. E-disclosure is also now the norm, with recognition that electronic data sets rather than dusty filing cabinets have long governed the disclosure process.
Those changes though are relatively run of the mill, compared with the far more fundamental change that the judiciary now needs to grapple with, namely how to deal with AI.
As a result, Guidance for Judicial Office Holders on AI was published in December 2023. This short (six page) document provides an overview of AI and its potential impact on the justice system. The guidance aims to help judges and magistrates understand the basics of AI, its capabilities and limitations, and the ethical and legal issues surrounding its use. The guidance covers topics such as the use of AI in decision-making, the role of AI in the courtroom, and the potential impact of AI on access to justice.
Key issues covered include:
The main features of AI and its applications: AI is a broad term that covers various technologies that can perform tasks that normally require human intelligence, such as reasoning, decision-making, and learning. AI can be used for various purposes in the legal domain, such as automating processes, enhancing access to justice, and assisting judicial decision making.
The benefits and challenges of AI for the justice system: AI can offer many advantages for the justice system, such as improving efficiency, accuracy, consistency, and transparency. However, AI also poses many challenges, such as ensuring fairness, accountability, reliability, and public trust. AI also raises ethical, legal, and social issues that need to be addressed by the judiciary and other stakeholders.
The principles and recommendations of the AI Guidance: The AI Guidance proposes a set of principles and recommendations for judicial office holders to follow when dealing with AI-related matters. The principles are: awareness, understanding, transparency, challenge-ability, and oversight. The recommendations are: education, engagement, collaboration, evaluation, and innovation.
It is fair to say that its overall tone is one of warning about the risks of AI. For example, in a section on what not to use generative AI for the Guidance lists both legal research and legal analysis. The guide explains that AI tools are a poor way of conducting research to find new information you cannot verify independently, although they may be useful as a way to be reminded of material you would recognise as correct. Similarly, the current public AI chatbots do not produce convincing analysis or reasoning. I note though that the well-known knowledge providers are heavily investing in new AI research tools. For example, Thomson Reuters, owner of Westlaw, last year unveiled plans to invest some $100 million a year in artificial intelligence.
In this very dynamic landscape I can’t help but think that if the Judiciary’s AI Guidance 2.0 was published today (just 4 months after the 1st edition) how different it might be. In a March 2024 speech on “AI - Transforming the work of lawyers and judges” the Master of the Rolls, Sir Geoffrey Vos KC commented that “it will soon be negligent not to use AI”.
Will that go as far as using AI for decision making though? That may seem very radical for the UK at the moment, but we are seeing green hoots of this elsewhere. For example, Brazil leads the way, because the courts have a huge backlog of cases. It is reported that Brazil has the biggest court backlog in the world, with close to 80 million cases awaiting final judgments. To combat this, more than 64 AI initiatives are underway, including one called VICTOR - a system that analyses appeals to determine whether they should be brought before a judge. It took 2 years to train VICTOR, with data extracted from more than 100,000 lawsuits and nearly 3 million case dockets. Before VICTOR, it took on average 44 minutes to analyse an appeal. VICTOR takes seconds, and the backlog has reportedly reduced.
So, again – a shifting landscape, we are just at the start of our AI journey in the court system. I think that judicial attitudes will change, although caution will always be a guiding principle.
Building a Culture of Innovation
Now comes the very hard part. Identifying areas for effective change is hard enough, persuading others to embrace that change is a different challenge altogether. Poor change management leaves employees frustrated, demotivated and disengaged.
Building a culture of innovation in law firms is an even harder task than elsewhere. Larry Richard is a leading expert on the psychology of lawyer behaviour. He has conducted extensive research on the subject, using a variety of psychological assessments to study the personality traits of lawyers.
His findings suggest that lawyers, as a group, have some distinctive personality traits that set them apart from the general population. For example, lawyers tend to score higher on measures of scepticism, autonomy, and urgency, and lower on measures of sociability and resilience.
So, as a ‘norm’, lawyers are people who
don’t like to be told what to do by others (autonomous);
will question the need and basis for change (scepticism);
will want change to be delivered tomorrow – or preferably yesterday – when they are finally convinced of the need (urgency);
take setbacks poorly (resilience); and
don’t want to engage in talking about it (sociability).
All of this is perhaps overstated and cliched, but it does highlight part of the problem for law firms in adopting change.
What can we do to address that?
Leadership in Innovation:
Leadership plays a pivotal role in fostering an environment that not only accepts but also champions change, acting as the catalyst for innovation within an organisation. It is the responsibility of leaders to inspire and motivate their teams, setting a vision for progress and guiding the collective effort towards embracing new ideas and methodologies.
Effective leaders understand the importance of communication and collaboration, creating a culture where feedback is valued and diverse perspectives are integrated into the change process. The concept of feedback is worth pausing and considering further.
Harvard research by Emily Heaphy and consultant Marcial Losada in their paper The Role of Positivity and Connectivity in The Performance of Business Teamsfound that it wasn’t just the amount of feedback that had a huge impact, it was the type of feedback that mattered; specifically, the feedback ratio. They found that the most successful teams gave almost six positive comments for every negative one. Effective leaders also lead by example, demonstrating adaptability and resilience, which encourages a mindset of continuous improvement and openness to change among all members of the organisation.
But, here lies a paradox – I think it is fair to say that as lawyers we strive for excellence and perfection, but that really does not sit well with innovation where failures are just inevitable. My short point is that if you always strive for perfection you will quash innovative thinking, so a real mindset shift is needed and it is an uncomfortable one.
Instil a sense of responsibility and ownership at all levels:
Yes it starts with the leaders, but actually ownership needs to be at all levels of an organisation. If you look at who truly grapples with innovation at your firm and who it is really important to, I would say that it is the younger generation which is full of ideas and adopt technology. We should lean into these people, but also empower them. We need to give them the ability to invest time, and recognise their contribution by financial means or otherwise. That’s how real change will happen.
Empowering people is key; at Simmons we have launched a new programme where our AI champions – selected high performing talent from each of our practice groups - are asked to devote 300 hours per year to AI tasks, such as:
identifying basic applications of the technology and ensuring that their group adopts them in the ordinary course of their work; and
exploring how AI can support more complex or nuanced tasks relevant to their group, and working with the in-house AI Technical team to develop bespoke solutions.
The hope is that the combined impact of everyone using Generative AI for daily tasks will have a meaningful impact on our overall efficiency and productivity, and the creation of bespoke solutions has the potential to transform the way we deliver more complex solutions to our clients.
Training and Development:
We need to upskill our teams.
Being a good technical lawyer is a given – but the real issue is how do you differentiate yourself from the opposition. My personal view is that we need to be equipping our teams with soft skills. We started an M&BD skills academy in my DR team in the UK, and we now have a firmwide initiative called STARS.
Upskilling in the modern age has 5 key pillars, which form the basis of our own STARS initiative :
Future-focused: Developing the skills of tomorrow will allow you to flourish in any organisation, anywhere.
Global: the best learning opportunities should benefit everyone, regardless of role or location.
Innovative: use a range of workshops and webinars, podcasts, TED style talks and practical learning experiences.
Collective: peer-to-peer learning allows people to learn from the best talent within the firm, as well as from clients, external trainers and experts.
Evolving: regular updates and new learning content need to adapt to feedback and business needs.
The work streams include leadership, wellbeing, impact (such as presentation training) , sales (not a word that lawyers are often comfortable with!) all forms of communication available to you, and deploy them to their max.
Conclusion
Innovation is doing things differently but also doing different things.
Harnessing the innovative technology available to us will enable us to do more of some things better, and doubtless enable (or force) us to do less of others, but we can achieve so much by working together with the technology and the technical teams who support it. The combination of technology plus humans really is a game changer.
