ChatGPT and the legal industry

A few weeks ago, the case of Steven Schwartz, a New York lawyer who turned to ChatGPT to gather evidence for the case of a client who sued an airline for injuries in the middle of a turbulence, came out in the media. The tool returned several cases that had established jurisprudence and Schwartz made the presentation of it.

Some time later, when he tried to analyze the evidence, the judge realized that six of the cases presented as records were false. It had been the offspring of a phenomenon common in artificial intelligence tools known as “hallucinations.”

While the story didn’t pan out for Schwartz, it’s worth giving him credit for applying technology to the practice of law, a notoriously conservative profession.

Marc Andreessen is one of the world’s leading technology investors. In 2011, in a famous article published in the Wall Street Journal, he warned: “Software is eating the world.”

Currently, more and more activities are developed with software. Before, we looked for information in libraries. Today we use a software company like Google. Before, we informed ourselves with media companies. Today we do it with software companies like Facebook and Twitter. We share photos on Instagram, ride with Uber, and stay with Airbnb. All software companies.

And yet, lawyers have generally felt safe from digital disruption. “Our work is handmade”, they say. “Each client is unique. Each case requires a different solution. And this cannot be replaced by software.”

Artificial intelligence. Photo: Telam

But is this really so? Richard Susskind is one of the great specialists in the future of law. In his book The Lawyer of Tomorrow, he describes the three forces that are happening to the legal industry: market changes, technology, and deregulation. Since the economic crisis of 2008, the market has become more demanding. Legal departments at companies are cutting budgets and reducing staff, and clients are tougher when negotiating hourly rates.

Second, technology facilitated access to online solutions. Many people who do not have money for a lawyer look on Internet forums for people who had a problem like theirs. Or they use them to download contract templates. For many, Google became the first place to look for legal advice.

The third trend is deregulation. Historically, only lawyers can offer legal services. But, in many cases, it is no longer necessary to study law to provide certain legal services.

Of course, only a lawyer can represent a client in court. But you don’t have to be a lawyer to start a legaltech company. After all, the founders of Google weren’t librarian experts, and the creators of Uber weren’t veterans of the taxi industry. They were software people.

These three trends make up a scenario in which the offer of legal services is being reconverted. From a craft work to a commodities. Imagine a world where contracts are executed automatically. A world where trials take place online. A world in which even a robot can act as a judge.

A scenario of lower demand, greater competition and where much of the work is being automated. For customers, that’s good news. More choice and competition mean lower costs. For lawyers, however, the challenge of adapting arises. In essence, his work is the same as fifty years ago.

As Susskind says, the world of law is going to undergo bigger changes in the next twenty years than it has in the last 200. Like libraries, media, and music, the legal industry is also transforming into software.

*Professor at the Faculty of Business Sciences of the Austral University.