AI’s Impact on Legal Services: Advancements and the Future of Judgment-Based Advice
AI is set to revolutionize the legal industry, with a recent report by Goldman Sachs Economics Research estimating that nearly half of the current processes and work tasks in legal could eventually be automated by AI. However, it’s important to recognize that AI foundation models are based on predictions, not reasoning. They are trained to predict what is statistically probable, functioning more like an abacus than a mind, as described by The Economist.
This raises the question of where this leaves the upper end of legal services that rely on judgment rather than predictable processes. Can AI have any impact on legal advice and services that are based on subjective judgment?
For business lawyers, the growing digitization and automation of legal services can be likened to an accelerating down escalator, where the bottom is marked by commoditization, process-driven work, and decline, while the top represents specialization, judgment, and growth. The Goldman Sachs report emphasizes that AI will accelerate this escalator, pushing firms to move up market faster in order to merely maintain their current position.
The UK’s legal sector has defied economic downturns and crises, consistently growing to account for 2% of the GDP. Complex regulations and increasing complexity have been driving factors behind this growth. Governments continuously enact new regulations, creating a constant demand for legal services. However, as AI transforms professional services into computer services, will we witness any changes at the top end of the escalator?
One possibility is that competitive pressures will lead to the development of more structured and statistically predictive approaches to judgment-based services. Big Law firms differentiate themselves through their reputation for sound judgment in assessing risks in complex cases. Currently, this assessment is largely based on a combination of analysis, experience, and intuition. When a partner tells a client, you have a 60% chance of winning, they are not simply providing a statistical breakdown but offering an informed judgment rooted in their evaluation of the facts, experience, and the understanding that unforeseen variables can impact the outcome.
Can lawyers gain a competitive advantage by leveraging AI to offer a more statistically predictive approach to risk assessment and chances of success? It is a possibility, but it requires careful definition of terms. Even in contexts such as climate change and medicine, the term likely can hold different meanings. Furthermore, the UK House of Lords has acknowledged that likely may have multiple definitions depending on the situation and refers to a real risk that should not be ignored, rather than just the likelihood of something happening.
Drawing on the concept of standards of proof in civil proceedings (balance of probabilities), authors John Kay and Mervyn King argue for an approach that values narrative reasoning and the search for the best explanation. They maintain that legal decision-making is rooted in narrative reasoning and the presentation of a compelling explanation of relevant events. Success in civil proceedings hinges on presenting a narrative that is better than any alternative. While AI can enable decision support in assessing risk in complex cases, there is still some way to go before foundation models reach the top of the escalator.
In conclusion, AI is predicted to have a transformative impact on legal services, automating many processes and work tasks. However, the upper end of legal services that rely on judgment and subjective analysis may experience changes as competitive pressures drive the adoption of more statistically predictive approaches. While AI-enabled decision support is likely to become more popular in assessing risk in complex cases, there is still a need for narrative reasoning and the ability to provide the best explanation in legal decision-making. As AI continues to evolve, the legal industry will need to adapt and find the right balance between statistical predictions and the nuanced judgment that sets lawyers apart.
Footnotes:
The content of this article serves as a general guide and should not replace specialist advice tailored to your specific circumstances.
