Chatbots and the Business of Law

The chatbots are coming, the chatbots are coming! The advent of chatbots has revolutionized the business landscape and the legal profession is no exception. Chatbots are computer programs that use artificial intelligence (AI) and natural language processing (NLP) to simulate conversations with human users. They can automate tasks, streamline workflows, and provide personalized services to clients.

Chatbots not only interpret user intent but also process their requests and give prompt relevant answers. ChatGPT, an AI-powered chatbot developed by OpenAI, was made available on November 30, 2022, and it has the potential to transform the legal profession. In this column, we’ll explore the impact of ChatGPT and chatbots on the legal profession.

By the Numbers

The market value for chatbots varies depending on the specific industry and use case, as well as the size and maturity of the market. The overall global chatbot market, however, was estimated at $5.1 billion in 2022, $6.3 billion in 2023, and is expected to expand at a compound annual growth rate of 23.3 percent from 2023 to 2030, according to Grand View Research. Revenue forecast for 2030 is $27.2 billion. By 2024, consumer retail spend by way of chatbots worldwide will reach $142 billion—up from just $2.8 billion in 2019, according to Juniper Research.

The overall AI market is significantly larger than the chatbot market. The global AI software market was $9.51 billion in 2018 and is forecast to grow to $118.6 billion in 2025, according to Statista.

The rising acceptance of customer service activities among businesses for the reduction in operating costs is anticipated to propel market growth. The growth can also be attributed to other factors, including the increasing demand for automation and the need to provide personalized customer experiences. In addition, advancements in AI and NLP technologies have made chatbots more sophisticated and effective in understanding and responding to user inquiries. Various innovations carried out in AI and machine learning technologies are expected to strengthen the features of chatbot, which, in turn, would drive market demand.

The chatbot market is also driven by the rising domination of messenger applications and increasing demand for customer analytics. The messaging app usage statistics from a year ago released by Hootsuite show that WhatsApp has 2 billion monthly active users, followed by WeChat with 1.3 billion monthly active users, followed by Facebook Messenger with 998 million monthly active users. Chatbots with the ability to reasonably mimic humans allow brands to engage consumers more efficiently on these growing messaging platforms.

Since launching in November 2022, ChatGPT has changed our understanding about what is possible with AI. The conversational chatbot can perform a range of human-like tasks with ease, such as writing and debugging code, composing lyrics, writing in the style of a specific author, and answering test questions. ChatGPT has also reinvigorated discussions about the transformative use of AI in professional spheres, including law and legal services delivery. Long-term, could apparatuses like ChatGPT replace some attorneys altogether?

How Might ChatGPT Impact the Legal Profession?

1. Improved Efficiency

Chatbots can streamline internal workflows and automate various tasks that are traditionally handled by people, such as appointment scheduling, document retrieval, and data entry. By automating these tasks, law firms can focus their time and resources on more complex and high-value tasks, which in turn could improve productivity and increase billable hours. ChatGPT can also automate various tasks that are traditionally handled by attorneys, such as research, document drafting, and contract review.

2. Enhanced Research Capabilities

ChatGPT can help attorneys perform legal research more efficiently and effectively. It can also analyze large volumes of legal documents, such as case law and statutes, and provide relevant information and insights to lawyers. This can help attorneys identify relevant precedents and develop arguments more quickly and accurately. ChatGPT can also aid lawyers in staying up to date with changes in the law. It can analyze legal updates and provide summaries and explanations of the changes. This can help attorneys stay informed about legal developments and provide timely and accurate advice to their clients.

3. Increased Access to Legal Services

According to a 2022 report by the Legal Services Corp., “low-income Americans do not get any or enough legal help for 92% of their substantial civil legal problems.” AI technology offers “significant potential to address access to justice questions” in making legal services available to people of limited means, noted Andrew Perlman, Boston, MA, in a Reuters article. ChatGPT can provide information to those who may not have access to traditional legal services due to geographical, financial, or other barriers. This arguably can help increase access to justice, particularly for underrepresented and marginalized communities.

The View

So what do practicing litigators think about generative AI? “ChatGPT and tools like it are the future, and this technology is improving incredibly quickly. But for now, they’re not ready for prime time—at least, not quite yet,” according to Nicole Black, Rochester, NY, in an Above the Law article.

“[O]ver time it will be a serious competitive disadvantage” for law firms that do not adopt generative AI, commented David Wakeling, London, UK, in a Reuters article. “We’re seeing it as a way of saving our people a couple hours a week-plus on the time it takes to perform client work,” he explained.

“You have to understand the length and breadth of the technology and where it collapses, and make sure the task is not one that demands something beyond its limits. ChatGPT might be good at taking a test. But, because of the nature of the underlying mechanism, it may never be capable of genuine reasoning, being imaginative, or thinking beyond the moment,” noted Kristian J. Hammond, Evanston, IL, during a panel presentation to Northwestern University.

“Even if humans retain ultimate decision authority, it is not uncommon for them to become overly reliant on technology-based recommendations, a phenomenon called automation bias. With AI, this trust may be especially misplaced since the actual capabilities of the technology may not be as ‘intelligent’ as they seem,” according to Matthew Stepka, Berkeley, CA, in an ABA Business Law Section article.

ChatGPT has the potential to transform the legal profession by improving efficiency, enhancing research capabilities, increasing access to legal services, reducing costs, and improving client engagement. It is not intended to replace lawyers, but rather to assist them in their work and provide better service to clients. As the legal profession continues to evolve, it is important for lawyers and law firms to embrace new technologies like ChatGPT to stay competitive.

“I don’t think, at least in the foreseeable future, that AI tools will make lawyers obsolete. But they will be very important helpmates, as we have already seen with e-discovery and computerized legal search,” predicted John O. McGinnis, Evanston, IL, during the Northwestern University panel discussion. “The question for lawyers and law students will be, how are you going to add value in a world where some of the simpler tasks are going to be taken away by machines?”