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The Revolutionary Impact of Generative Artificial Intelligence in the Legal Industry

Summary

The legal technology field has witnessed a wave of development over the past year, with industry pioneers creating new products and services that have the potential to transform the way legal work is done. In a series of articles titled […]

The Revolutionary Impact of Generative Artificial Intelligence in the Legal Industry

The legal technology field has witnessed a wave of development over the past year, with industry pioneers creating new products and services that have the potential to transform the way legal work is done. In a series of articles titled “Accelerating Business,” supported by research partner RSGI, a think tank, the Financial Times aims to highlight the growing contribution of these service providers in meeting the evolving needs of businesses. The latest articles in this monthly series explore the impact of generative artificial intelligence (AI).

During their research, RSGI analysts focused on the work of individuals who have significantly aided internal legal teams in adopting new technology and better supporting their companies’ strategic objectives. Their achievements have laid the groundwork for the use of generative artificial intelligence in reshaping the legal industry.

In March, Sandeep Agarwal, the Global Legal Technology and Alliances Leader at PwC, played a crucial role in the launch of a generative AI tool called Harvey. Developed by a legal startup supported by OpenAI, Harvey has been instrumental in assisting PwC’s 6,000 lawyers and tax experts in generating approximately 30,000 research questions per week on the platform. Agarwal explains that while Harvey provides “good answers” to research queries, users must also “apply human intelligence to enhance and add a legal advisory layer on top of it.” PwC has implemented tactics to optimize the use of Harvey, including creating an intranet page with information on how employees can effectively utilize the tool. Additionally, PwC is collaborating with OpenAI and Harvey to develop a generative AI model capable of supporting various applications, such as chatbots or drafting and translating tools. The model will utilize their proprietary data, as well as additional publicly available legal data.

In a bid to challenge the capabilities of Microsoft OpenAI’s GPT-4, Daniel Katz, a law professor at Illinois Tech’s Chicago-Kent College of Law, recognized the need to select a task that would capture the attention of lawyers. What better choice than a law exam? In March, news broke that Katz’s AI model had successfully passed the test, achieving results in the 90th percentile. Katz has long been an advocate for utilizing artificial intelligence in legal work. In 2014, he co-founded LexPredict, a contract analysis and case prediction tool, which he sold to the legal company Elevate in 2018. In November, he launched a legal technology consulting firm, 273 Ventures, and developed the Kelvin Legal Data operating system. He intends to use this system to cultivate a market for technology and services that enable law firms and legal departments to “collect and connect” all their data sources.

Having left private practice in India 14 years ago, where he worked as an M&A lawyer for clients, Sarvath Misra settled in London and, after a short stint as a legal consultant, decided to offer legal services. Noticing a dearth of technological contract management solutions while working with clients, he saw an opportunity. He co-founded the legal tech startup NewGalexy and subsequently, in 2015, co-founded the legal tech company ContractPodAi. In March, the company launched Leah, which applies generative artificial intelligence to contract lifecycle management. Misra believes this idea was a “logical choice” even before generative AI emerged. Contract management had been “such a significant problem” for countless lawyers that he knew it had to change.

Mary O’Carroll, the Chief Community Officer at Ironclad, issued a warning to attendees at a legal operations conference in May about the potential effects of generative artificial intelligence on the industry. She stated, “This can be quite a daunting time for us,” addressing members of the Corporate Legal Operations Consortium (CLOC), a professional association. O’Carroll cautioned them that the technology they currently possess is just the beginning and that numerous changes lie ahead.

Frequently Asked Questions (FAQ)

  1. What is generative artificial intelligence?

    Generative artificial intelligence refers to AI models and systems that can generate new content, insights, or solutions based on existing data or input. In the legal industry, generative AI has the potential to transform various tasks, such as research, contract management, and case prediction.

  2. How is generative artificial intelligence being used in the legal industry?

    Generative artificial intelligence is being utilized in the legal industry to enhance research capabilities, automate contract management processes, assist in case prediction, and provide legal advisory support. It empowers legal professionals to work more efficiently and effectively.

  3. What challenges does generative artificial intelligence pose in the legal industry?

    While generative artificial intelligence offers numerous benefits, it also poses challenges related to data privacy, ethical considerations, and the need for human oversight. Legal professionals need to strike a balance between leveraging the capabilities of generative AI and ensuring the integrity and accountability of legal work.

  4. How can generative artificial intelligence reshape the future of the legal industry?

    Generative artificial intelligence has the potential to revolutionize the legal industry by streamlining processes, increasing accuracy, and enabling lawyers to focus on more complex and strategic tasks. It can enhance the delivery of legal services, leading to greater efficiency and cost-effectiveness.