Generative AI Pioneers Converge on Legal Tech

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Legal technology suppliers are focusing on developing generative artificial intelligence products as lawyers increasingly recognize how generative artificial intelligence products can transform their work lives . Legal technology providers, like their clients, are feeling a high degree of disruption going on.

Aspiring Pioneers range from the Big Four professional services firms, to information providers LexisNexis and Thomson Reuters, to regulated legal services providers and technology vendors.

“The timeline is now,” says Sandeep Agrawal, Lead Partner for Legal Technology Business at PwC UK. He reports that there is an urgent need among technology providers to compete to bring new generative AI tools to their legal clients and form new partnerships to achieve that goal.

For example, in March PwC UK announced a deal with Harvey, a fund-backed venture run by Microsoft-backed startup OpenAI, to develop a generative AI platform for legal departments.

Almost every aspect of the legal services industry seems ripe for change, thanks to the ability of generative AI to retrieve, synthesize, rework, and represent information very quickly (often within seconds). increase.

Simon Harper, founder of managed legal services firm LOD, says generative AI tools can be used for many tedious legal tasks, such as comparing contracts for key clauses, to speed negotiations. I’m here.

He added that other uses for generative AI include enforcing compliance with billing guidelines and rewriting complex regulations in layman’s terms. In 2021, LOD partnered with legal tech consultancy Syke to jointly provide clients with enhanced advice and new tools.

Such developments have the potential to change long-standing legal concepts such as: The line between the big four professional services firms and traditional law firms. A managed legal services business that hires low-cost local attorneys for low-skilled work. Aspects of the regulatory system governing lawyers.

Generative AI platforms, i.e., large language models, can perform so many tasks required by lawyers, such as researching case law, drafting written arguments and contracts, and iterative due diligence checks, that they are qualified Non-lawyers may be able to fill legal roles more easily.

Generative AI ‘raises big questions from a regulatory perspective of who targets whom’ [and what] I am licensed to practice law,” said David Wong, chief product officer at Thomson Reuters. His company develops “plugins” to connect their software applications to his 365 Copilot, Microsoft’s generative AI service.

Debate over the role of lawyers is particularly urgent in the United States, where ethics codes in most jurisdictions prohibit anyone other than a qualified lawyer from receiving compensation, even for the preparation of property transfer documents. there is

U.S. courts are now beginning to articulate when and how attorneys can use generative AI for submissions. In June, a federal court in northern Texas and the U.S. Court of International Trade issued guidelines on the use of AI-generated submissions by attorneys, shortly after a New York attorney’s citation of a judgment fabricated by ChatGPT sparked headlines and sanctions. issued.

Wong argues that further adoption will depend, at least in part, on further clarifications and amendments to current regulations. [on the rules], it becomes very difficult to produce a product and then offer something that can be commercialized. “

But suppliers aren’t waiting for regulatory action. “we [have] PwC’s Agrawal mentions PwC’s Harvey-based platform and is starting to fill in client-specific data to solve some of the client’s problems.

Initially, PwC focused on how generative AI could save time and increase efficiency around M&A. But it also helps clients prepare for compliance issues, draft documents, and analyze traditional contracts, he added.

According to Agrawal, in-house lawyers at multinational corporations already have PwC as their favorite supplier of advice and services for tasks previously thought to be achievable only by traditional top law firms. He said he is inviting PwC to sit on the office’s committee. He expects PwC’s share of some multinational deals, such as mergers and acquisitions, to rise from 20% to as much as 80% once the new tools allow for pricing changes.

“We are currently working on a model where you don’t have to charge for billable hours,” explains Agrawal. “Most of the work is based on documents, data, or outcome-based pricing.”

In May, US-based KPMG (the firm does not have legal authority) and Microsoft worked on environmental, social and governance analysis, as well as developing tools to develop virtual assistants for tax advisory clients. announced a partnership. But his KPMG companies outside the US have remained silent despite several generative AI plans underway. . . We are not ready to speak publicly on these or this issue in general,” KPMG UK said in June.

Thomson Reuters’ Wong said many traditional law firms are also keen to develop generative AI solutions to meet the demand for speed and efficiency. “We are seeing interest and enthusiasm across the industry,” he notes.

In May, LexisNexis announced plans for a chatbot tool that leverages multiple large-scale language models to allow users to perform so-called “conversational searches” of its database. The software automatically refines responses, automates drafting, and summarizes legal documents. “We’re building it organically, not a partnership,” says Jamie Buckley, chief product officer of LexisNexis legal department. The company and “a handful of law firms” are testing prototypes and plan to officially launch them in the coming months, he said.

Both Thomson Reuters and LexisNexis say their generative AI ambitions extend beyond serving their existing client base of lawyers. “We basically develop products that help lawyers,” says Buckley. “We are not going to practice law directly.” And like Wong, he stresses that new technology will make lawyers more efficient, not obsolete.

But generative AI poses a risk of obsolescence for lawyers undertaking outsourced or low-skilled legal work. “There will be a consolidation of his providers of managed services,” Agrawal predicts.

However, LOD’s managed services division reported more than 50% year-over-year growth in the last 12 months, partly due to customer enthusiasm for AI tools developed by partner Syke and consulted by LOD. says. Harper of LOD. This is higher than any previous year.

Nor does generative AI replace “senior partners walking down the hall” who make tough decisions during multi-million dollar deals or confusing legal battles, Agrawal said. For rates above $2,000 an hour, “you’ll still be charged a premium,” he says. “This will not change, at least for the next five years, because clients still want that level of trust.”

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