Embracing AI: Can UK law firms keep up with the US?

The United Kingdom and the United States house two of the world's biggest and most successful legal markets. And while there are obvious differences between them, when it comes to generative AI, attitudes are surprisingly on par (to the point where it's uncanny).

Awareness of generative AI in the legal community is high across both markets, with UK lawyers only one percentage point more likely to have heard of the technology than their US peers (87% compared to 86% respectively).

This is hardly surprising – generative AI has been plastered over legal publications for a good six months now, and has become a polarising topic amongst legal professionals the world over.

What is more noteworthy is how many respondents to both surveys believe generative AI will have a noticeable impact on the practice of the law. In the UK, 95% of respondents said they believe generative AI will have an impact, with 38% believing it will be significant and 11% transformative. Similarly, 89% of US respondents held the same opinion, with 29% believing it will be significant and 10% transformative.

Ben Allgrove, partner and chief innovation officer at Baker McKenzie's London office, says generative AI is different than some of the over-hyped tech developments we have seen in the past.

"It will change how we practice law. One immediate area of focus is on how we might use it to improve the productivity of our people, both our lawyers and our business professionals. While there are, of course, quality and risk issues that need to be solved, we see opportunities across our business to do that."

Greg Lambert, chief knowledge officer at Jackson Walker LLP, a Texas-based firm with almost 500 attorneys, recalls being at a conference in early April with in-house counsel from an array of companies. “There’s an expectation that this will change everything."

But even if his peers believe that generative AI will make legal services “better, faster, cheaper” to deliver, Lambert says they are not envisaging that “someone will just go flip a switch and use generative AI tools and suddenly bills will be cut in half.” It’s going to take time and experimentation to understand the full horizon of possibilities, he argues.

Two-thirds (67%) of survey participants in the UK said they feel mixed about the impact of generative AI on the practice of law, admitting that they can see both the positives and the drawbacks. A similar number of US lawyers uttered the same sentiment, with 62% admitting to having mixed feelings about the technology.

One of the biggest risks when using free generative AI tools are hallucinations.

When generative AI tools don't have access to the relevant data, they have a tendency to make up the answers, or hallucinate, says Alison Rees-Blanchard, head of TMT legal guidance at LexisNexis.

"This means any generated output must be checked thoroughly. However, where those tools are trained on a closed and trusted data source, the user can have greater confidence in the generated output and hallucinations will be easier to identify, as verification of the output is made easier."

Kay Firth-Butterfield, executive director of the Centre for Trustworthy Technology, a World Economic Forum Centre for the Fourth Industrial Revolution, says these systems are only as good as the data in them.

"Generative AI tools can give biased and other non-ethical advice and should be used, especially at this early stage, very carefully indeed."

"All the concerns we have had in the past about whether we can design, develop and use AI responsibly are extended by generative systems where we simply cannot interrogate how they have reached a particular answer."

When asked about the ethical concerns regarding generative AI on the practice of the law, nine out of 10 UK respondents (90%) cited concerns. A quarter (26%) had significant concerns and 3% had fundamental concerns. US respondents held an equal amount of concern regarding the ethics of AI, with 87% expressing some legal of concern, with 29% holding significant concerns and 4% holding fundamental concerns.

In May 2023, LexisNexis announced the commercial trial of Lexis+ AI, which searches, summarises and drafts using LexisNexis content. This tool was built with the RELX responsible AI principles in mind, says LexisNexis chief product officer, Jeff Pfeiffer.

"Everything we do considers the real world impact of the solution, it proactively prevents the creation or reinforcement of bias, we ensure that we can always explain how and why our systems work in the way they do, human oversight is built in and that we respect and champion privacy and data governance."

The vast majority of lawyers in the US and the UK are aware of generative AI and its potential impact on the practice of the law, yet only just over a third (36%) have ever used it in a personal or professional capacity.

However, the US lawyers who have used generative AI tools before are twice as likely to do so on a regular basis, with 19% of respondents stating they use it at least once a month compared to only 9% of UK respondents.

Adoption of generative AI tools will likely increase in the coming months, with 36% of UK and US lawyers saying they are currently exploring opportunities.

The most compelling feature of generative AI is the technology's time-saving benefits – a sentiment that was shared by the majority of our respondents. US respondents, however, were significantly more likely to agree, with 84% believing generative AI will increase efficiency, compared to 65% of UK respondents.

According to Mark Smith, director of strategic markets at LexisNexis, generative AI will become indispensable to lawyers by enabling them to reach new markets and solve problems in a way that isn't possible today.

"With access to the right data and training, the technology will be able to answer legal questions with game-changing speed and accuracy and do so at a lower cost than we have seen before."

When asked how they would like to use generative AI specifically in their work, respondents said researching matters (UK 66%, US 59%), drafting documents (UK 59%, US 53%) and document analysis (UK 47%, US 40%) had the most potential.

Danielle Benecke, founder and head of Baker McKenzie Machine Learning, says her and her Palo Alto-based team have studied how to apply generative AI and machine learning to the strategic decision-making process and come up with some interesting innovations.

An example, provides Benecke, is using generative AI and data science to understand global trade sanctions and identifying related risks.

“We looked at client supply chains that were thought to be vulnerable to sanctions and other trade restrictions and used data provided by the client and from public sources to identify risks – at scale and rapidly,” she says. “When you do that at scale, you discover things that humans on their own might not recognise.”

David Halliwell, partner at Pinsent Masons' alternative legal services business, Vario, says legal research will be a key use case for generative AI, and summarising complex documents and information quickly will become second nature.

However, he also notes firms will need to rely heavily on their legal content providers for data quality.

"Using suggested drafting for a clause that relies on a prior draft where the law has since changed has always been a critical knowledge management issue. Generative AI’s ability to pull data from multiple data sources magnifies this risk, as tracing and validating the source will be difficult."

Rees-Blanchard also flagged that client companies are likely to be particularly concerned about the use of their data (both as training data and as input prompts or instructions to generative AI tools), and transparency around such use, and the measures taken to address their concerns will be key.

The most obvious of flaws is in the case of ChatGPT-4, where the model has been trained on data up to September 2021.

Pfeiffer shared the developments at LexisNexis. “In May 2023, LexisNexis announced the commercial preview launch of Lexis+ AI, a generative AI platform designed to transform legal work. It is currently under heavy trial with our US customers, and we plan to bring it to the UK market in the next few months.” 

Lexis+ AI is built and trained on one of the largest repositories of accurate, up-to-date and exclusive legal content, leveraging an extensive collection of documents and records. With careful training, human oversight and a walled-garden approach, Lexis+ AI will give customers trusted and comprehensive first-draft legal results with an unmatched speed and precision, always backed by links to verifiable, citable authority. 

Find out more about Lexis+ AI here.

Despite the risks, there's a clear expectation from US and UK legal teams that their external counsel embrace generative AI technology.

Nearly three-quarters (70%) of in-house counsel in the UK agreed or strongly agreed that law firms should be using cutting-edge technology, including generative AI tools. A similar 67% of US in-house counsel agreed or strongly agreed with the statement.

Generative AI tools will increasingly form part of both the in-house and private practice toolkit, says Allgrove.

"Clients want their legal services needs met in an efficient, responsive and value-driven way. They do not want "AI powered solutions"; they want the right legal services to meet their needs."

The firms that fail to adopt generative AI tools will find themselves priced out of certain types of repeatable work, highlights Halliwell from Pinsent Masons.

"Generative AI is going to raise the standard for how law firms add value. Firms without it will struggle to provide the same level of data-driven insight and depth of analysis that clients will come to expect."

While most in-house counsel are in favour of their law firms using generative AI, 82% of UK respondents and 73% of US respondents said they expect to be made aware when their firms are using it.

The majority of respondents from law firms were on the same page as their in-house clients. Three-quarters (75%) of UK respondents and two-thirds (64%) of US respondents said they believe their clients will expect to be made aware of generative AI tools in action.

When asked if generative AI will directly change the relationship between in-house teams and their external counsel, only 36% of UK respondents and 39% of US respondents agreed.

In-house legal departments should expect their external counsel to be leveraging technology of all kinds for client benefit, including generative AI, says Isabel Parker, partner at Deloitte Legal.

"We believe that corporate legal departments should be challenging their service providers on their use of AI and on the benefits that they will receive as a result."

Lambert from Jackson Walker uttered a similar sentiment. “There’s a catchphrase making the rounds right now,” he says. “AI won’t replace lawyers, but lawyers who use AI will replace lawyers who don’t.”

According to Halliwell, generative AI has the ability to enhance client relationships rather than hinder them.

"Firms need to identify the ways in which they can use generative AI to do new things, such as better reporting and analysis, rather than simply introducing risks by attempting to automate tasks which aren't suitable."

Yet Halliwell did warn other law firms looking to introduce new generative AI-led tools to the market to be very careful about the guardrails on their use, and the quality and sources of underlying data.

"If they can’t authenticate those sources, they’re giving themselves a serious “black box” problem."