It's been about a year since ChatGPT was first introduced to the public, thus kicking off the modern AI boom. And though hype about AI reshaping every corner of the economy has reached a fever pitch, facts and figures are only starting to emerge. So, how about law? 

A recent study by professors at USC Gould School of Law and the University of Minnesota law school tested just how much impact GPT-4 (the successor of ChatGPT) has on legal analysis. The results? Routine legal assignments can be done 32% faster—a significant advance in efficiency. But the quality of the work is still up for debate, and only showed modest improvements for lower-skilled participants in the study. "Standing alone, these results suggest that generative AI will almost certainly become a vital tool for many lawyers in the near future, comparable to more familiar legal-tech tools like Westlaw, Lexis and e-discovery software," the study's co-authors wrote. 

But will it replace attorneys any time soon? Unlikely. The report suggests that lawyers and judges begin adopting AI assistants now, but co-author Jonathan Choi cautions that "the kinds of work not suited to AI are sophisticated judgments and unusual situations. Those are the tasks experienced partners at law firms are paid for." Well that's a sigh of relief for those who just made partner—unless you talk to Goldman Sachs.

In their own study released this year, Goldman Sachs envisions that "law firms are likely to see their pyramid-like hierarchies flatten out with the dissolution of the billable hour." Firms will offer value, they explain, by both leveraging AI technology and by excelling in irreplicable human skills: "the ability to build client relationships, advocate, empathize, understand a client's particular needs, provide discretionary judgment, and, ultimately, the ability to weigh all of the factors at hand and advise on a path forward for the client."

New Billing Models

If billable hours disappear, what will replace them? LexisNexis would like to propose a few options: contingency payouts (where attorneys get a share of pay-outs in won cases), flat fee models (which may help with efficiency), and "value-based billing, which focuses on the outcome and value provided to the client rather than the hours invested." Some ethical questions should also be addressed, like double billing. "If AI writes a draft for one client, while you meet with another client, can you bill for both?"  

THE VERDICT:

Even a year in, it is too early to fully understand the power of AI, where the technology is heading, and how the legal profession and the wider economy will change. That being said, it is clear that those who adopt AI into their workflows now while also honing their client relationship skills will be best poised for the world to come.