As the tsunami of AI disruption hits the world of white collar work, the legal sector is not immune from its impact. The recent study by Linklaters, where they measured the competency of AI engines to determine whether they were yet able to replicate the functions of a qualified lawyer were noteworthy. The headline being that whilst the AI engines are not quite there yet, they soon will be. What this will mean for the legal sector is anyone’s guess, but the logical assumption would be the law firms would need less lawyers.

The LawTech sector is blossoming as a result, and with Cleary Gottlieb acquiring Springbok AI, is this a sign of things to come? And if Law Firms start buying AI solutions, will they then allow competitor firms to access technologies and IP they then own? This acquisition raises questions, but if the Fintech sector is anything to go by as an indicator, there will be two kinds of Law Tech firms that emerge:

• Disruptors: Companies that look to automate the legal process and in the process disrupt incumbents. As they become established this will result in them eating into the market share of law firms.
• Amplifiers: Companies that amplify the effectiveness of existing law firms and will look for a licensing business model. This is likely to then lead to law firms either doing more with the same size of team, or streamlining their headcount.

For corporate law firms, both kinds of firm present opportunities and threats. Attempting to build their own proprietary AI engines is fraught with risk, after all Law Firms are not technology companies and are not set up that way either. Equally becoming reliant on a third party provider who could then be bought by a competitor is also a potential issue.

Equally the big winners are likely to be the Venture Capital / Private Equity industry, because as the sector starts being disrupted, and there becomes a clear model of creating an AI asset which is so valuable to Law Firms they feel the need to buy it, it will lead to a clear exit strategy for companies in the sector and lead to an acceleration of funding. What that means for jobs is another question.

This is a topic we will be discussing at our upcoming AI Disruption Breakfast event, where we will be focusing on Law Tech and how it is transforming jobs in the sector. To find out more about the event, contact us or register below.