Generative AI: A guide for corporate legal departments
What does the future hold for Generative AI and legal services?
The potential of Generative AI in legal has captured the imagination of many, and with the emergence of large language models, the legal industry has almost certainly reached its long-awaited tipping point toward transformative change.
The potential of Generative AI in legal has captured the imagination in ways unmatched in other professional services. Given its heavy reliance on precedent and legislation, and the prevalence of text generation and review as its core tasks, legal work is particularly susceptible to AI application. Goldman Sachs estimates that AI has the potential to automate up to 44% of legal tasks, a materially higher percentage than any other profession. GPT-4 has already passed the Bar exam. A leading provider of Generative AI platforms predicts that within a year, Generative AI will match the capabilities of a paralegal, and within five years, it will match those of an “average lawyer.”
While most industries and corporate functions have already undergone substantial technology-driven transformation, legal has remained relatively untouched due to the unstructured nature of legal data and the continued reliance on expert professionals. With the emergence of large language models which underpin Generative AI, the legal industry has almost certainly reached its long-awaited tipping point toward transformative change.
Envision a scenario where Generative AI possesses the capability to address the majority of routine legal inquiries, generate highly tailored contracts instantly, facilitate contract negotiations, identify contractual risks, summarize changes in legislation and case law, and even draft legal arguments. GenAI is already capable of many of these tasks – in a small number of years we firmly believe it can be the standard model for doing so.
Generative AI will be pervasive to the core of what legal services are today. So much so that we also believe it has the capability not merely to automate tasks but to disrupt the entire foundations of the legal market. We could see the democratization of legal advice, the transfer of legal practitioner judgement and opinion to machines, universal access to justice, market practice replacing two party negotiations, AI-based case resolution, and productivity transformation for lawyers.
Almost every Deloitte Legal conversation with General Counsel (GCs), senior corporate counsel and Legal COOs over the past three months has started or ended with a discussion about Generative AI. GCs have an emerging awareness of the remarkable potential this technology holds. Now, they are beginning to ask the obvious question - where and how they should start using it?