The 2023 Women’s World Cup raised this sport to a new level in one fell swoop. This could have been the key event for a development leap. Women’s football triggered off an unprecedented degree of acceptance worldwide and a wave of enthusiasm. After all the years in which women’s football was of secondary importance on the pitch, it now definitely appears to have emerged from the shadow of men’s football and to claim its own raison d’être. Precisely what factors caused this decisive spark still remains to be analysed.
And in the legal market? In the last few years, the issue of #LegalTech has been raised with varying degrees of intensity. What emerged were conferences, an exotic subject for devotees, an enthusiastic start-up scene, and certain lawyers even felt a calling to become software developers. Yet LegalTech does not quite seem to have hit the ground running. So far, digital change does not appear to have triggered a wave of change in any grand style, and we are still far away from any #disruptive effect. However, this might have changed with the introduction of ChatGPT. This has let a genie out of the bottle which has put the spotlight on all industries and professional groups in all countries, simultaneously and in no time at all – including the legal service providers. There is now a new dynamism, and in-depth discussions are now being conducted on a broad basis. Thus @Goldman Sachs, for example, predicts that 44% of legal work could be automated with artificial intelligence (AI) (here). AI could become a #game changer in the legal market.
In this context, it is worth looking at the notion of #emergence. The German dictionary Duden defines emergence as, on the one hand, the “occurrence of new, unpredictable qualities from the interaction between several factors”. We can now puzzle over why precisely this Women’s World Cup or only ChatGPT received this sudden surge of attention by the masses although both of them had already existed before. It is a fact that men now have to entertain this idea of more #competition in football because soon twice the number of teams will vie for the same sponsors. In the same way, the quality of legal services will be improved thanks to AI. According to Duden, however, the term “emergence” also has a further connotation, which deserves more attention in connection with AI, in particular: the term also describes the situation “whereby higher levels of being arise from lower ones through newly materialising qualities”. This will be attested to AI at the latest when it develops awareness, i.e. a state of being which up to then had only been reserved for human beings (#singularity). This stage is still up in the air today, yet both definitions have in common that they do not only lead to a slightly optimised result but have the potential for genuine #transformation.
As early as April 2021, i.e. even before the great hype about ChatGPT, the European Parliament and Council issued a proposal for a Regulation laying down harmonised rules on artificial intelligence, i.e. the law has not yet been enacted. Depending on the respective stakeholder group, this new #regulation will be a cause of joy or pain. As is well known, companies and thus also legal departments are not particularly keen on more regulations since they regularly compel them to make cost-intensive changes and adaptations to daily business. Conversely, external legal advisors are pleased with them since they create new #consultancy need and thus promise additional #turnover and #growth.
But this doesn’t go far enough. AI allows for a previously unimaginable #efficiency gains, #quality improvement and a higher #performance. Customers will increasingly ask their suppliers to make use of technological solutions because the companies themselves will in any case have to integrate AI into their value-creation chain (#customer orientation). With today’s #business model of #big law firms, this will primarily result in a situation whereby less time can be invoiced per mandate (#hourly rates). Also, law firms will employ fewer young associates who spend their training years in data rooms as done in previous years and thus could also invoice fewer “training hours”, i.e. they could ultimately become too expensive for law firms (#leverage). The good news is, though, that the Goldman Sachs report also confirms that many #new jobs will come into being in the consultancy industry, in particular. What kind of jobs they will be still remains to be seen.
Law firms will have to adapt to the new general conditions since their customers already use AI and will also call upon their business partners to do so. They will ask themselves the question of #positioning (#strategy development) and rethink their #revenue model (#business model). Associates will have to be developed and led differently (#leadership), regardless of the current discussions concerning #New Work, #WFH and the #work/life balance. They will learn from their customers what they can do with AI and will have to follow suit accordingly. There is no apparent reason why #legal departments should not have to join in with the next step of technical evolution, possibly on slightly adapted terms. Internal customers will put them under #pressure to continue their development in any case, and this pressure will (also) be passed on unfiltered to their external suppliers.
AI constitutes a #global challenge which will not leave any industry unaffected. Arguing that AI is not good enough (yet) is the wrong approach because this will gradually come to pass in the same way in which cars, laptops and mobile phones are always continuing to develop. It is also pointless to debate the question as to whether digitalised robots will replace human lawyers in the future. It is not a question of either-or, but of togetherness. Rather, the pressure to adapt will have to be expected from elsewhere, i.e. from those lawyers who integrate new technologies such as AI into their working world. Thus the real competition does not derive from the technology itself but from other legal service providers who integrate the technology into their work for their own benefit.
If you are looking for further impulses, you can find further posts about various issues concerning the legal market here.