How Law Firms Are Approaching AI and its Impact within the Commercial Property Sector
It is generally assumed that law firms adopting AI-based software can benefit from improved efficiency, accuracy and cost-effectiveness, which are all benefits linked to improving services for clients.
Many law firms are pro-innovation and keen to implement AI technologies into their business. We have recently reported on the considerations for employers in respect of the use of AI technology in the workplace and future regulation. Integrating transformative technologies such as AI could also be beneficial for property lawyers.
ChatGPT is an AI-based software which is very topical and has stirred conversations on the future of lawyers. Despite this, the general consensus across law firms is that AI will not replace jobs but will intensify legal work and create greater opportunities for those ahead of the curve.
AI in Law Firms
Law firms can use AI to help them streamline more administrative tasks (which are often costly) and reduce the impact of human error. For example, a law firm could use AI to assist with the following more basic or process driven tasks:
- Document Analysis - efficient analysis of documents by using 'predictive coding software' to review a vast number of documents and rank them by pre-determined key metrics.
- Review - reviewing existing contracts and suggesting clauses.
- Legal research - by forming a case strategy based on previous outcomes in similar cases and tailoring search results.
- Dictation - by carrying out various functions through voice function alone.
- Invoicing - automatically generating invoices at the end of each month or relevant time period by corroborating with time-recording programs.
AI in Commercial Property
Property lawyers are already somewhat familiar with AI software. There are already AI-powered platforms which use AI to identify risky commercial transactions by scanning property search data which greatly assist property lawyers at all stages of transactional matters. Property lawyers could further benefit from implementation of AI technologies to assist with more specific tasks, including the following:
- Sale contract management and review - review of existing contracts, flagging risks, suggesting areas for improvement and extracting obligations and ranking them by severity.
- Preparing Reports - recognising data insights from deeds. For example, names of parties, address and square footage of property, rent and rent review provisions and assignment clauses, to name a few.
- Personalisation for the firm and client - generating firm templates and inputting data by extracting clauses and provisions which are thought to be important for particular clients and their sectors.
- File set-up - streamlining client verification process.
The Future
Traditionally, legal services contain a mix of some tasks that can be automated and some that cannot, such as those that require unique knowledge or matter specific detail. Recently, Sir Tony Blair and Lord Hague of Richmond strongly suggested that individuals should have a 'Digital ID' - incorporating an individual's passport, driving license and tax records. In an increasingly paperless society, the process of client due diligence is becoming more challenging. In the next three to five years, it is anticipated that the vast majority of law firms will generally have adopted a digital approach to client verification processes which could reduce the length of a property transaction by four weeks.
It is possible for AI to be applied to a variety of tasks and it is exciting to see how AI will continue to progress in both the short and long term. The wider implementation and use of AI across law firms is at an early stage and it may take some time to see the effects. It has been reported that prior technologies have often been conceptualised using the 'J Curve-Effect' where productivity may fall as it is initially adopted before rising steeply. The implementation of AI technology will require resilience from firms to face the challenges and opportunities presented.