Source: Forbes

In an industry steeped in tradition, a quiet revolution is underway. According to recent data, nearly three-quarters of legal professionals plan to incorporate artificial intelligence into their daily operations. With legal tech investment reaching a record $477 million in 2024, the question is no longer if AI will transform legal services, but how dramatically it will reshape the profession.

The Current State of Legal Tech

The investment landscape tells a compelling story of confidence in AI’s legal applications. Harvey, a prominent legal AI startup, recently secured a $100 million Series C round at a $1.5 billion valuation. Investors are betting heavily on the potential for AI to automate significant portions of legal work – with estimates suggesting that up to 44% of legal tasks could be handled by emerging technologies.

“The legal industry’s obsession with making lawyers more profitable misses the point,” argues Ben Su, Co-founder and Head of Growth at Capita, which bills itself as the world’s first AI lawyer. “Optimizing broken workflows isn’t innovation—it’s entrenchment. We need systems that eliminate inefficiencies, not perpetuate them.”

Su’s company has moved quickly from concept to execution. Within weeks of launching, Capita was processing thousands of dollars in transactions daily, focusing initially on streamlining capital formation processes for startups – a traditionally paperwork-heavy area of law.

Evolution, Not Revolution

While the headlines might suggest AI’s arrival in law offices is a recent phenomenon, experienced practitioners offer a more nuanced perspective.

“Back in 2001, when I was working at a law firm, we were already using WordPerfect—not just for basic text processing, but specifically because it supported macros and structured templates,” explains Carey Lening, a legal-tech consultant with two decades of experience in privacy and data protection. “In reality, automation has been part of the legal field for quite some time.”

What’s changed, Lening argues, is not the presence of automation but its sophistication and capabilities. Today’s AI tools can analyze contracts, summarize cases, and even generate legal documents with increasing accuracy.

Jide Afolabi, a probate lawyer with over 20 years of experience, describes this evolution from his perspective: “Five years ago, [client intake] would have been done via paper. You’re taking notes. Now, there’s automation for that.” However, he emphasizes that while the method has changed, the core process of asking questions remains essential – it’s just that “now it’s the machine asking the questions.”

The Promise and Pitfalls

The appeal of AI in legal services extends beyond efficiency. Su envisions a future where AI serves as a constant companion to clients, identifying issues before they escalate and providing real-time guidance.

“Clients don’t care about what tool you’re using,” Su states. “They care about the outcome and how much you’re charging for that outcome.” This perspective challenges the traditional hourly billing model that has made legal services prohibitively expensive for many small businesses and startups.

But this optimistic vision comes with significant warnings. About one in four legal practitioners view AI as a threat, and statistics show that AI tools hallucinate in at least one out of six legal queries – a potentially costly error in a field where precision is paramount.

Lening is particularly concerned about consumer-facing legal AI applications: “People lack the ‘smell test’ to catch nonsense. Look at Joshua Browder’s DoNotPay—the FTC fined them for overpromising. Clients don’t know what they don’t know, and AI can’t fill that gap yet.” DoNotPay, which marketed itself as “the world’s first AI-robot lawyer,” received an FTC fine in September 2024 for falsely advertising their AI capabilities.

Su acknowledges these challenges, noting that many founders have used generic AI-generated templates with disastrous results: “If you use ChatGPT for specialized legal work, you’re guaranteeing a negative outcome. We’ve fixed countless errors—like founders shutting down startups due to flawed AI-generated equity splits.”

Rethinking Legal Education and Practice

The integration of AI into legal services raises profound questions about how lawyers should be trained.

Lening defends the core aspects of traditional legal education: “It does force you in a very consistent way to think differently about problems, to break things down into discrete things. You learn how to analogize better. You learn how to craft your thoughts in a way that becomes extremely useful.”

However, she calls for updated curricula that include technical literacy: “Law schools teach analytical thinking, but graduates need to learn to audit AI outputs, design prompts, and collaborate with engineers.”

Su takes a more critical stance on the current system, particularly the apprenticeship model that often burdens new graduates with unpaid or poorly compensated work. He suggests that AI could reduce the workload on young lawyers, potentially creating more balanced opportunities for those entering the profession.

The Future Landscape

As AI continues to reshape legal services, the consensus among experts is that human judgment will remain essential. The most likely outcome is not a wholesale replacement of lawyers but a redefinition of their role.

“Automation isn’t about replacing judgment,” Lening argues. “It’s about freeing lawyers to focus on what humans do best: empathy, ethics, and innovation.”

This shift may lead to more transparent pricing models. Instead of unpredictable hourly bills, clients might pay fixed monthly fees for certain services – a change that could make legal services more accessible to those currently priced out of the market.

Afolabi warns, however, that competition will ultimately drive costs down: “Like in any other industry, if a few firms in a specialized sector reduce their costs, it will pressure others to follow suit. The first firm to blink will drive the cost down.”

The Road Ahead

The integration of AI into legal services represents both an opportunity and a challenge. For clients, it promises more affordable and accessible legal services. For lawyers, it offers the chance to focus on more intellectually stimulating work while delegating routine tasks to machines.

But realizing this potential requires careful navigation. Lawyers must educate themselves about AI’s capabilities and limitations, while technology developers need to address the risks of hallucinations and errors in legal contexts.

As Lening aptly summarizes: “The future isn’t AI versus lawyers—it’s lawyers with AI.” In this evolving landscape, the most successful legal professionals will likely be those who embrace technology as a partner rather than view it as a competitor.

With 65% of law firms believing that effective use of generative AI will separate successful from unsuccessful firms in the next five years, the message is clear: adaptation is not optional but essential for survival in the modern legal landscape.

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