AI won't replace lawyers
At least not anytime soon. But it does provide an opportunity for forward looking lawyers.
AI has been dominating the conversation, especially on social media, so we’re going to talk about it today. Specifically I’ll share why I believe lawyers are in no immediate danger of being replaced by AI and where I think the greatest opportunities lie. I’ll also share a bit about the specific bets I’ve taken (where I work, and the startups I’ve invested in) based on my beliefs.
Also: Thanks to everyone who filled out the poll from last week. Seems like most of you believe your biggest differentiators are subject matter expertise and general intelligence—not surprising since so many of you are lawyers! This week, I have a poll about whether people would be interested in participating in a law-focused startup incubator (e.g. “Y Combinator for legal tech”) based on a few conversations I’ve had in the community.
Yes, I made this myself with the Apple Notes app on the new iPad I got last week. You can expect more terrible cartoons in the future!
There’s a lot of chatter about AI replacing white collar workers. Including lawyers. I mean, there have always been articles around this topic floating around. But it’s really stepped up in recent months with the release of OpenAI’s impressive technology.
I get why people want to replace lawyers with technology. We’re not the easiest to work with. And we often charge a lot of money for basic legal services. So I totally get the excitement around the possibility of using AI to get rid of the lawyers.
But these predictions are way off the mark. Mostly because they fail to address the unspoken dynamics of the legal industry. You have to understand why something exists before you can get rid of it. So today I’ll share three reasons why lawyers can’t be replaced—at least for now.
1. Non-legal aspects of legal advice
This is probably the least controversial reason. Everyone who goes to a lawyer, whether it’s for a basic will or a major M&A transaction, is looking for guidance and counsel. Legal information is only part of the puzzle. It’s kind of like how we feel when we speak with a human agent on a support call, vs. an automated responder that tells you “please click 1 for …” The former reassures you a lot better than the latter. The same is true for lawyers.
2. Someone to own the risk
You know when someone’s doing something that involves legal uncertainty, and then seeks out someone with a legal background take a quick review? Doesn’t even have to be a full fledged lawyer. I can tell you countless examples of me and/or my friends “looking over” things for friends and relatives. Could be as simple as an apartment lease. People feel reassured when someone else, with presumably some expertise in the law, gives you the OK.When it's a licensed attorney, it's even more powerful. Clients need to have someone own that risk, and it just doesn't work when it's a computer.
3. The protective guild
This one is probably the most powerful factor, although it’s also controversial. There are strict rules in the U.S. about who can provide legal advice. If you don’t meet the requirements (ie. not a licensed attorney) then providing direct advice to a client is deemed illegal. They call it “unauthorized practice of law” (UPL) and it’s been an obstacle for many companies looking to solve for access to justice issues. Even LegalZoom, an established brand in the legal services space, struggled with their own UPL challenges in the past.
The existence of these obstacles doesn’t mean AI won’t have an impact on the legal industry though. I strongly believe that right now, technology’s impact on the consumer—clients—is happening indirectly. Specifically it’s enabling tech-forward lawyers to provide superior offerings to their clients. Maybe it’s lower legal fees, but maybe it’s also faster turnaround times or better analysis of the evidence/record.
My beliefs have informed my decision to enter the legal innovation space through companies that empower lawyers. For example:
I work at Ironclad, which leverages AI to enable in-house counsel to review and analyze business contracts more quickly;
I’ve invested in JusticeText, which uses AI to enable public defenders and criminal defense attorneys to automate review of video evidence;
I’ve invested in Briefpoint, which uses AI to enable litigators to automate drafting high quality discovery responses
Over time, I also believe that attitudes towards technology, AI, and providing services directly to clients will change. We’re already seeing the regulatory environment (in the U.S.) loosening to provide opportunities, eventually, to get around the UPL challenges described earlier.
AI might dominate the conversation now, but more’s on the way. It really is an exciting time for legal innovation.
Recently I’ve had lots of different conversations with legal professionals about someday creating a startup incubator to focus on supporting law-related startups—specifically investing in them, or making introductions to potential customers. If any of you are interested in getting involved, please fill out the survey below and/or send me an email with your thoughts.
FYI: I kept “expertise” out of the survey because it appears the demand for advice is exceeded by the supply.
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I know we all took ethics and qualified what we said with “it’s not legal advice” but that’s just not how the real world works.
Great points. I think the last point about indirect impact is a bit understated. If AI/tech can make lawyers who adopt it 50% or 80% faster at their jobs, productivity increases and the number of lawyers needed to meet overall demand goes down. That could be hugely disruptive to the profession and isn't limited by your three obstacles. Also, I'm not sure your second obstacle about owning risk will necessarily continue to hold true. Seems like we could see the old saying, "nobody ever got fired for hiring IBM" changing to "nobody ever got fired for hiring IBM's AI lawyerbot".
You may be right, but I'm a bit horrified that things like this appear to be happening: https://www.cbsnews.com/news/ai-robot-lawyer-artificial-intelligence-do-not-pay/