The recent launch of ChatGPT exemplifies the growing role of artificial intelligence in daily business operations. The legal industry is no exception and is likely to witness a significant impact as it increasingly incorporates AI tools such as ChatGPT.
The demand for AI tools in the legal industry is driven by the high costs of labor and the need for greater efficiency. By eliminating tedious and time-consuming tasks for lawyers, AI tools can significantly enhance their productivity.
ChatGPT, an online tool developed by OpenAI, is capable of answering questions in plain English by sifting through a database of information and generating coherent and sensible responses. Essentially, it acts as a search engine that synthesizes the relevant information found online to create a concise essay.
In the legal profession, searching for relevant documents can be a time-consuming and sometimes fruitless task. For instance, a lawyer may receive a real estate joint venture term sheet in the form of a limited liability company that they recognize as being similar to an LLC agreement they've previously worked on, but can't recall the specifics.
In such situations, lawyers typically sift through various documents on the firm's document management system, which can take an hour or more and might not yield the desired results. However, with the help of an AI tool capable of searching a database of documents, a lawyer could simply enter relevant keywords such as "form of LLC agreement where two managers divide up responsibilities" and instantly identify the desired precedent agreement, as well as others done by their colleagues.
In addition to legal practice, recruitment and hiring are crucial for the success of law firms. Increasingly, companies and law firms are turning to AI and algorithmic decision-making tools to support HR-related activities, as revealed by a 2022 survey from the Society for Human Resource Management. The survey found that 25% of employers currently use some form of AI for this purpose, with another 25% intending to do so within the next five years.
Some firms have implemented questionnaires and other ranking systems to evaluate job candidates. However, the use of such technology must be carefully considered to avoid discriminatory practices that could affect candidates based on factors like race, sex, age, or national origin. The Equal Employment Opportunity Commission (EEOC) examines potential discriminatory issues related to such workplace tools and recently updated its guidance on the use of AI and other tools to assess job applicants and employees under the Americans with Disabilities Act.
The EEOC advises employers to avoid using AI that could exclude individuals with disabilities who could otherwise perform essential job functions with reasonable accommodation. For example, screening programs that penalize candidates with gaps in employment could have a disproportionate impact on women or violate disability laws if the break was related to a disability.
As AI tools become more sophisticated, law firms must create and maintain a database of research and document precedents so that when document management vendors add AI to their offerings, the database can be analyzed and culled for approved research and deal documents. To do this effectively, law firm leaders should seek experienced, compliant vendors and consultants and follow laws and guidelines in this area.
While the prospect of using AI to efficiently serve a larger pool of clients is attractive, law firms must carefully consider the potential impacts of such tools and use them responsibly.
