Lawyers cross into the new era of generative AI

The appetite for generative AI technology in the legal sector is unprecedented, with lawyers from all backgrounds jumping at the chance to make the most of its time-saving potential.

In January 2024, LexisNexis surveyed more than 1,200 legal professionals in the UK on their use of generative AI. A little over a quarter (26%) of respondents revealed they're using generative AI tools at least once a month. This is a noticeable rise from only 11% of respondents in July 2023. Respondents from academic institutions and large law firms were the most likely to use these tools for their work, at 33% and 32% respectively.

A large number of respondents also revealed plans to use generative AI tools in the future – 35% of respondents said this was the case (up from 28% in July 2023). This was particularly true for in-house lawyers, with 42% revealing AI adoption plans. The number of respondents with no plans to adopt generative AI dropped from 61% in July 2023 to 39% in January 2024.

While these AI adoption figures aren't staggeringly high, for the risk-averse legal profession, they represent a huge shift.

Generative AI will fundamentally change the way we work in the legal industry, says Dr. Gerrit Beckhaus, Freshfields Partner and Co-head of the Freshfields Lab.

"Generative AI has the potential to support a lawyer's work by helping with efficiencies, increasing effectiveness and speed, which will lead to a superior output for the client," he says.

Many leading firms are launching AI-powered products for internal and external use. But how can firms go about getting their lawyers or their clients to actually use them and trust them?

Joe Cohen, the Director of Innovation at international firm, Charles Russell Speechlys, says using generative AI to help automate contract reviews, speed up drafting and summarise information is relatively safe, provided some level of human oversight is involved.

"As it currently stands, I would be uncomfortable with any real delegation to AI without human oversight, but am generally very optimistic about the gains we will see across the board in the legal sector in that context."

We also asked our respondents how they plan to use generative AI in the immediate future. The biggest priorities were drafting legal documents at 91% (up from 59% in July 2023), and researching legal matters at 90% (up from 66% in July 2023). Relying on generative AI tools to draft emails or other communication-based tasks was also listed as a priority by 73% of respondents (up from 33% in July 2023).

Rachita Maker, the Global Head of Legal Ops, Tech and Consulting at legal giant, DWF, believes generative AI will be a very reliable assistant for lawyers over the next few years.

"Generative AI can be used for legal research, such as preparing notes for arguments, or questions for depositions. It can also be used for regulatory compliance, highlighting regulatory changes and the potential impact it could have on an organisation's policies and processes."

London-based law firm, Macfarlanes, has introduced a number of generative AI tools to its team, and have experienced high engagement rates, particularly with junior lawyers, trainees and paralegals, says Head of Lawtech and Chief Knowledge & Innovation Officer, Chris Tart-Roberts.

"Communication and training is key. As with any roll out or change project, we have our champions throughout the firm and use them to win over teams."

"Knowledge sharing in relation to use cases and areas to explore is critical," says Tart-Roberts, who revealed his firm looks closely at usage data to understand how teams are using these tools and what they’re using it for.

The survey results also revealed a strong demand to integrate generative AI with pre-existing platforms, such as contract analysis tools (56%) and case management platforms (50%).

May Winfield, Global Director of Commercial, Legal and Digital Risks at internationally renowned engineering advisory firm, Buro Happold, says generative AI is being embraced in a bigger and faster way than most other technologies in recent history.

In-house lawyers in particular will benefit from using generative AI for contract reviews, she says.

"This won't replace the analysis and skillset of lawyers, but facilitate their reviews to be done faster and more consistently."

More than a third (39%) of all respondents said their organisation had made a change to their day-to-day operations as a result of generative AI. The most common changes included launching an AI-powered product for internal use (15%), carrying out AI-related training for staff (11%) and developing policies on the use of generative AI (11%). Unsurprisingly, large-sized firms were the most likely to have made some sort of change, with 62% of respondents revealing their firm had made some sort of change.

John Quinn, Founder and Chairman of Quinn Emanuel Urquhart & Sullivan, says that while the multitude of ways AI can be used across the legal sector is remarkable, he believes the most exciting use cases are just around the corner.

"Five years from now, I’m sure generative AI will have taken quantum jumps," he says. "But exactly how that’s going to play out, it’s very hard to say."

Quinn, who's firm employs more than 1,000 fee-earners across 35 offices, says generative AI, at present, allows his firm to "synthasise very large volumes of data and documents produced in disclosure in litigations and arbitrations, and come up with very workable first drafts, memoranda, pleadings and the like."

New to artificial intelligence? Read LexisNexis' introduction to AI

To come up with new and exciting ways to use this rapidly-evolving technology, some are taking a collaborative approach. Rachel Broquard, Service Excellence Partner at Eversheds Sutherland (International), says her firm is using employee crowd-sourcing to put a series of new generative AI use cases to the test.  

"We recently conducted a crowd-sourcing initiative, gathering over 150 use cases. From this extensive list, we distilled 30 key initiatives that are currently under review with the assistance of external consultants."

One notable development is the adoption of Microsoft Copilot, says Broquard.

"This protected and private generative AI tool empowers our people to generate content, analyse data and summarise documents more efficiently. Early feedback from our AI taskforce pilot group has been exceptionally positive."

Generative AI—is its output protectable by intellectual property rights?

When it comes to researching the right use cases for your organisation or team, Beckhaus cautioned the importance of understanding both the potential and limitations of each use case and effectively integrating it into relevant workflows.

"At Freshfields, we have been assessing the market in various jurisdictions around the globe for products as well as integrations of generative AI into the solutions of already established vendors."

Broquard also highlighted the importance of finding long-term partnerships that your organisation could rely on in the years ahead.

"Each decision we make involves careful consideration, including decisions such as choosing our strategic partnerships and future-proofing our approach."

LexisNexis has been using AI technologies such as natural language processing, machine learning, and deep learning in our products for many years.  We have several search features that utilise GPT and we leverage other large language models where they are appropriate.  

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No. of lawyers regularly using generative AI doubles in six months

Lawyers from large firms and academic institutions are leading the way

Legal drafting and research are the top priorities

2 out of 5 respondents have implemented an AI initiative

While most lawyers are eager for the time-saving – and, potentially, cost-saving – benefits that come alongside generative AI, concerns still linger. And rightly so...

As any generative AI expert would admit, without specific training, oversight and grounding in appropriate content, the technology can fabricate answers based on inaccurate information. It can leak confidential data and construct biases.

Only 10% of respondents to our survey said they had no concerns using generative AI. Most respondents (59%) admitted they had some concerns, while just under a third revealed significant (26%) or fundamental concerns (6%). This is almost identical to findings from the July 2023 LexisNexis generative AI survey.

Mark Smith, Director of Strategic Markets at LexisNexis, says fears around accuracy of information are – and always will be – of vital importance to the legal profession.

"There's a huge fear of providing the wrong advice to clients, which is particularly heightened by issues with public access generative AI."

The biggest hurdles to adoption of generative AI are content hallucinations (57%), security concerns (55%), and the technology not being trustworthy enough (55%).

How to manage the risks of artificial intelligence in your business

According to Cohen at Charles Russell Speechlys, lawyers can avoid hallucinations on public access AI tools by double-checking all outputs and verifying them from other sources.

"There are also certain use cases that are not recommended on public access tools. For example, asking AI to cite cases for you."

Beckhaus from Freshfields says hallucinations are intrinsic to generative Large Language Models (LLMs), which are trained to be creative and avoid repetition.

"There are technical ways to reduce the tendency of hallucinations by increasing the parameters to make generative AI more deterministic, such as lowering the temperature."

The "temperature" is a hyperparameter that can be used to control the randomness and creativity of generated text in generative language models.

"In addition, prompting and context can further reduce the risk, alongside human guidance that can help to validate, assess and contextualise the results produced with the help of generative AI."

Maker from DWF says one way lawyers can safeguard themselves from hallucinations is by relying on known and trusted datasets. 

“We are using our own documents, which make the output of generative AI significantly more reliable.” 

In fact, legal professionals were far more open to using generative AI tools that took accountability for the answers it produced.

Find a legal framework and regulatory guidance around explainability on Lexis+.

We asked respondents how confident they would be using a generative AI tool that was grounded on legal content sources, with hallucination-free, linked citations to the verifiable authority used to generate the response.

Almost two-thirds (65%) said they would be somewhat or completely confident using it. Respondents from medium- and large-sized firms were the most comfortable using an AI-powered tool grounded on legal research and guidance content, such as Lexis+.

Samuel Pitchford, a solicitor for Pembrokeshire County Council in Wales, is excited to use generative AI for legal research purposes in the near future.

"We avoid using generative AI for research purposes at present to avoid hallucinations," says Pitchford. "But the development of ‘closed’ generative AI tools, trained exclusively on legal source material and available only to subscribers should be less prone to hallucinations and would allow our team to use generative AI for research."

Training materials—artificial intelligence (AI) in the workplace

In-house legal teams have, in many ways, been the pioneers of generative AI adoption in the legal profession. These time-poor teams have been looking to automate routine tasks for a long time now, and generative AI is the silver bullet. As a result, the number of in-house teams expecting their external counsel to use generative AI reached 70% in our July 2023 survey. In fact, almost half (49%) of in-house respondents expected their firms to adopt the technology within the next 12 months.

Read: Artificial intelligence—UK regulation and the National AI Strategy

However, expectations for firms to use generative AI have declined in the last six months, reaching 57% in January 2024.

"I suspect the number one reason is accuracy and fear of having the wrong advice, particularly heightened by issues with public access generative AI," says Smith from LexisNexis.

The expectation that law firms inform clients when they're using generative AI is still high, at 85%, compared to 82% in July 2023.

Interestingly, the latest survey found only 48% of firms believe their clients would want to know if or when they're using generative AI, down from 75% in the July 2023 survey. This highlights a potential point of friction for firm-client relations.

Besides inaccurate or unreliable information, another major risk of external firms using public access generative AI tools is potential data breaches, says Bunmi Tandoh, an in-house solicitor at London Borough of Enfield.

"Possible data protection breaches and breaches of confidentiality are a major risk," she says.

See guidance notes on data protection for artificial intelligence on Lexis+.

Winfield from Buro Happold says there is also the issue of confidentiality. 

"Inputting confidential data onto a public access generative AI platform is like throwing it into a public forum; you can’t delete it or remove it and someone asking the right question could, potentially, extract that data." 

While these risks are worrisome, some would argue that perhaps the biggest risk to lawyers is failing to make use of generative AI.

Tart-Roberts from Macfarlanes says, "AI is shaping the legal industry and no business or industry can afford to ignore it given its transformative potential."

In January 2024, LexisNexis announced the commercial preview of Lexis+ AI in the UK, which searches, summarises, and drafts using LexisNexis content.

Grounded in the largest repository of accurate and exclusive legal content, Lexis+ AI combines the power of generative AI with proprietary LexisNexis search technology and authoritative content. Results are always backed by verifiable, citable authority or source.

In fact, a US survey of legal professionals using Lexis+AI revealed some very compelling time-saving benefits. Three-quarters (74%) of respondents estimated they would save up to 7 hours a week for legal research, and four-fifths (84%) anticipated saving up to 6 hours a week for legal drafting.

Book your Lexis+ AI demo

This tool was built with the RELX responsible AI principles in mind, says LexisNexis' Senior Director of Segments, Stuart Greenhill.

"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."

Gerry Duffy, Managing Director of LexisNexis UK, says: “The Lexis+ AI solution is a proven first-of-its-kind tool for lawyers and will dramatically improve the speed, quality, and effectiveness of their practice and business.  We have taken a customer-first approach to all our innovation, research and product development.”

LexisNexis is teaming up with leading law firms, such as Eversheds Sutherland (International), Macfarlanes, Pinsent Masons and CMS UK, as part of its commercial preview programme to tap into their expertise for advice and feedback.

As legal teams come to terms with the opportunities and limitations of generative AI, one potentially problematic pitfall sits on the horizon – pricing. Some believe that the firms investing in generative AI-powered products or tools should be the ones who benefit from the time- and cost- savings. Others believe the benefits should be passed on to the client.

Our survey found 52% of respondents from in-house teams said they will expect bills to be reduced as a result of generative AI. Respondents from law firms, on the other hand, were less likely to agree, with 40% saying they expect bills to be reduced.

There was a stark contrast in opinion when it came to restructuring pricing as a result of AI. Nearly two-thirds (62%) of in-house legal teams said they expect law firms to make changes to billing practices as a result of generative AI. However, only 18% of law firms said they will make changes to billing practices – despite 42% believing it will reduce overall costs for the firm and 30% believing it will increase hours billed.

"The whole economic underpinnings of law firms and how clients are charged are going to have to change," says Quinn from Quinn Emanuel. "They are not geared towards large teams of lawyers."

Quinn believes the current bottom-heavy pyramid model of firms will slim down.

"There will be less need and demand for associates at firms. What we’re going to need is lawyers who are more capable with generative AI, and who are better at engineering and designing prompts for artificial intelligence programmes."

Macfarlanes' Tart-Roberts holds a similar opinion. "AI is certainly not about replacing lawyers, but we are going to see it turbo-charging their expertise," he says.

Broquard from Eversheds says it's too early to predict the impact of generative AI on law firm pricing models.

"The legal sector is still in the early stages of understanding pricing trends in this evolving landscape."

Instead of focusing on pricing, Eversheds' priority is to invest in technology with tangible client benefits, she says.

"When evaluating technology investments, we collaborate closely with our strategic partners to assess proof of value, total cost of ownership and return on investment."

LexisNexis' Smith says there are deeper, more structural challenges organisations need to overcome before adopting and deploying AI solutions.

"Firms need to consider everything from their pricing and resourcing models, to the investment costs for acquiring, developing or training generative AI solutions, to employee concerns around job security and satisfaction."

Smith says properly trained and grounded generative AI can ultimately underpin certain legal tasks being undertaken faster and at higher quality than that done by a human alone.

"The impact of this on price will depend on many different factors – the importance and number of those tasks in the overall workflow, the pricing mechanism at play, the commercial relationship between the client and law firm, and the overall level of competition in that segment of the market."

Generative AI presents lots of opportunities for law firms and legal teams to do things differently, says Elizabeth Rimmer, the Chief Executive of mental health and wellbeing charity, LawCare.

"Junior lawyers and trainees have been largely regarded as the labour force within some organisations that can carry out the grunt work and get it done."

Rimmer says there's an opportunity here for organisations to reduce the drudgery that younger lawyers have to do through the help of generative AI.

"You've got an opportunity here to give them more exciting and interesting work."

Rimmer also urged firms to be mindful of their future talent needs.

"If law firms take the view that potentially this is going to reduce their need for junior lawyers, then where are they going to get their future leaders and people from?"

Legal teams, firms and other legal professionals have a lot to consider over the months ahead – and pricing will be one of them. Yet the opportunity for lawyers of all backgrounds to improve their reach and break new ground is high. As a result, we are seeing real collaboration between law firms and their clients, between technology and innovation teams and fee-earners, between junior and senior legal professionals. And no-one is talking about pricing.