Generative AI and the Legal Profession: Breaking the AI Adoption Logjam

Where I examine the sea change in AI adoption in law firms and why it matters for legal professionals

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So, if you’re a regular, you know I don’t typically write straight-ahead legal trends analysis pieces. My way into my writing is usually a tad idiosyncratic and personal. But this week is different, a little more formal, a little more scholarly in tone; for reasons I’ll reveal in the near future. 😉

But for now, suffice it to say that I’ve become a contributor to the National Law Review’s Artificial Intelligence newsletter. This article is my first contribution.

In recent years, artificial intelligence has moved from the fringes of legal discourse to the forefront, with many heralding its potential to reshape the industry. Amidst the hype and promise, it's essential to examine the actual extent of AI adoption within law firms. This article explores the most recent data to paint a clear picture of how legal professionals are integrating AI into their practice. From the cautious steps taken in 2023 to the forecasted acceleration in 2024, we invite you to join us on this exploration of AI's true impact on the legal profession.

If this sounds interesting to you, please read on…

Separating Substance from Hype

Since the launch of ChatGPT in November 2022, "AI" has become ubiquitous in legal discourse. This term evokes a range of emotions among attorneys at large law firms—from excitement about transformative potential to skepticism regarding overhyped promises. AI has been harnessed for beneficial applications such as automating document review, enhancing legal research capabilities, and providing predictive analytics for case outcomes. However, it has also led to challenges, including ethical concerns over AI “hallucinations,” algorithmic bias, data privacy issues, and the potential erosion of traditional legal roles. With all this buzz around AI, the critical question emerges: To what extent is AI truly being integrated into the legal profession, and does it represent a true game-changer compared to existing legal technologies?

1. AI Adoption in the Legal Profession in 2023

Despite pervasive discussions last year, actual adoption of AI technologies within the legal profession in 2023 was cautious and measured. A 2023 ABA Legal Technology Survey Report stated that attorneys and law firms of all sizes were close to evenly divided between those that were already using or were seriously considering purchasing AI tools (20.7%) and those who were not interested in doing so (20.5%). Among those firms using AI, it was often confined to specific tasks like document review and legal research, rather than a wholesale transformation of legal services. Shockingly, over half of the respondents (58.8%) indicated that they did not know of the interest in AI-based tools or didn’t know enough about AI to answer the question about AI adoption. That figure changed little from 2022 when it was 57.8%.

Last year’s data highlights a significant gap between the widespread discussions about AI in law and its actual adoption within the profession. Despite the buzz about AI, only about one-fifth of attorneys and law firms were using or seriously considering AI tools, while an almost equal percentage were not interested at all. Notably, over half of the respondents remained uninformed or unsure about AI adoption, a figure that remained virtually unchanged from the previous year. This suggested a persistent lack of awareness or understanding of AI technologies among legal professionals. Perhaps the legal industry's traditionally cautious nature may have contributed to slow adoption rates.

2. Has the AI Adoption Logjam Broken in 2024?

What a difference a year makes. According to the 2024 LexisNexis Investing in Legal Innovation Survey, more than half of the AmLaw 200 firms (53%) have now purchased at least one generative AI (“Gen AI”) solution and 45% of them are already using it for legal matters. Moreover, three in four (77%) senior lawyers at Am Law 200 firms believe that Gen AI tools will enable them to offer new value-added services to clients, with 54% reporting they are already exploring these potential opportunities. The recently released Clio Legal Trends Report for 2024 is even more emphatic, reporting that usage of artificial intelligence by legal professionals has skyrocketed from 19% in 2023 to 79% this year.

This marks a considerable change from previous years, suggesting that the initial hesitation or "logjam" surrounding AI adoption is diminishing. Furthermore, the fact that 77% of senior lawyers believe these tools will enable new value-added services—and that 54% are already exploring such opportunities—highlights a growing optimism and proactive approach toward integrating AI into legal practice. This surge in AI adoption may be driven by a combination of competitive pressure, loss aversion, social comparison, and the proven benefits of AI in enhancing efficiency and client service. As more firms embrace Gen AI, those that lag in AI adoption may risk falling behind in innovation and client offerings.

3. Law Firm AI Experimentation Proliferates

Over the past year, law firms have significantly increased their experimentation with AI, leveraging both Gen AI tools and custom solutions to enhance their operations and client services. This trend highlights a growing shift towards AI adoption across various firm sizes and specialties.

Notable firms include Allen & Overy, which integrated Harvey AI in 2023, using ChatGPT technology to support its global team of over 3,500 lawyers. Macfarlanes, a London-based firm, also embraced Harvey AI in September 2023 as part of a broader AI strategy, focusing on refining the platform for legal applications.

Norton Rose Fulbright has been actively prototyping AI tools using public data and developing chatbots for internal and client-facing uses. Meanwhile, Wilson Sonsini ventured into AI with a product called Neuron, designed for contract review in partnership with Dioptra, a testament to their early adoption of Gen AI technologies.

Clifford Chance and Latham & Watkins have also made strides, with Clifford Chance deploying LUCY, an AI-driven knowledge management tool, and Latham & Watkins being an early adopter of Kira Systems for contract analysis. Other firms, like Linklaters, have created custom Gen AI chatbots for internal queries, while Travers Smith launched YCNBot, an open-source project for internal development.

Additionally, firms like Baker McKenzie, Skadden, and DLA Piper are increasingly using Gen AI to automate repetitive tasks and improve efficiency. These efforts are often backed by dedicated innovation teams within the firms, emphasizing the importance of adapting to AI for maintaining competitive advantage in the legal market.

Law firms may be motivated to adopt AI as they observe their peers doing so, aiming to maintain or enhance their standing within the industry. Simultaneously, the fear of falling behind competitors, who may gain efficiencies through AI, drives firms to integrate these technologies. These factors accelerate AI experimentation, propelled not just by potential benefits but also by the perceived cost of inaction, suggesting a fundamental shift in strategic decision-making within the legal profession.

4. Proof of AI Implementation May Be Driving Mainstream Adoption

In the legal profession, social proof matters a great deal. Interest in AI-based tools appears to be increasing because it is perceived that such tools are becoming more mainstream, according to the ABA Legal Technology Survey Report. In 2022, just over six percent of respondents indicated that AI is already mainstream and approximately twenty percent responded that AI would become mainstream in the next three years. In 2023, approximately four percent responded that AI is already mainstream, but almost forty percent of respondents indicated that AI would become mainstream within the next three years. 

Although the percentage of respondents who believe AI is already mainstream slightly decreased from over 6% in 2022 to about 4% in 2023, the belief that AI will become mainstream within the next three years nearly doubled from approximately 20% to almost 40%. This trend suggests that as more legal professionals perceive their peers adopting AI tools, they too anticipate its widespread acceptance. This phenomenon can be attributed to social proof driving interest—when individuals see others embracing AI, they are more likely to believe in its legitimacy and future prominence. Thus, the doubling in belief reflects not just optimism about AI's capabilities but also the reinforcing effect of social proof propelling the industry toward embracing AI technologies.

Closing Thoughts

The legal profession is navigating a pivotal moment as artificial intelligence transitions from a topic of discussion to an instrument of practice. While initial adoption has been cautious, recent data reveals a significant uptick in AI integration, particularly among leading law firms. This shift is not merely a response to technological advancement but is also influenced by psychological factors such as social proof, loss aversion, and social comparison. Firms are increasingly adopting AI tools to maintain competitive parity and to avoid the risk of falling behind peers who are leveraging these technologies for enhanced efficiency and client service.

AI utilization in the legal field has expanded beyond niche applications, moving toward mainstream adoption. Notable firms are actively experimenting with Gen AI and custom solutions, signaling a broader acceptance of AI's potential to transform legal operations. However, this transformation is uneven, with many attorneys still uninformed or hesitant about embracing AI fully. The true game-changing potential of AI lies in its ability to not only automate repetitive tasks but also to enable new value-added services that were previously unattainable with existing legal technologies.

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