A View of How Language Models Will Transform Law

64 Pages Posted: 15 Apr 2024

See all articles by Frank Fagan

Frank Fagan

South Texas College of Law Houston; EDHEC Augmented Law Institute

Date Written: February 26, 2024

Abstract

This Article considers the influence of Large Language Models (LLMs) on legal practice and the legal services industry. In the near term, LLMs will spur new legal work. Lawyers will be called upon to help litigate new questions over property rights in data, language model output, and lawyer-engineered prompts. Lawyers will additionally help judges decide what to do about new forms of torts, including legal malpractice, enabled by the casual and lightly supervised use of large language models. As legal rules governing the use of generative A.I. begin to clarify and settle, and as the technology fully matures, future lawyers faced with routine work will engage language models to save time and costs. Consequently, legal tasks will take less time to complete, and language models will enhance lawyer productivity.

While most commentators have focused exclusively on how LLMs will transform day-to-day law practice, a substantial structural change could be afoot within the legal sector as a whole. Large increases in productivity and attendant cost savings could encourage law firms and corporate legal departments to develop large language models in-house. A ten percent increase in attorney productivity would encourage an average sized “Big Law” firm to reduce its associate headcount by 300 to 400 lawyers. This represents cost savings of $60 to $120 million—more than enough to pay for the development of a specialized LLM. Consider a senior partner who relies heavily on a proprietary language model to service a client. If the model is owned and controlled by the firm, then clients will be more strongly tied to the firm and may wish to remain there—even if the partner departs. Generative A.I. thus portends a shift in the balance of power between partners and firms. To what extent, it remains to be seen.

Eventually, LLMs will push lawyers into highly specialized and nuanced roles. After fully mature LLMs arrive, the lawyer will continue to play a central role in legal practice, but only in non-routine legal tasks. These tasks will primarily involve value judgments, such as the development of precedent or its reversal, or the allocation of property and other scarce resources. This new mix of lawyer-machine labor, where machines primarily carry out routine legal tasks, and lawyers handle the non-routine, will give rise to a growing demand for lawyers who can exercise good judgment and empathize with the winners and losers of social change. Overall, the Article suggests a possible future where there are fewer lawyers and greater consolidation of the legal sector.

Keywords: large language models, generative artificial intelligence, legal profession, consolidation

Suggested Citation

Fagan, Frank, A View of How Language Models Will Transform Law (February 26, 2024). Tennessee Law Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4738879

Frank Fagan (Contact Author)

South Texas College of Law Houston

1303 San Jacinto Street
Houston, TX 77002
United States

EDHEC Augmented Law Institute

Roubaix, 59057
France

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