It used to be that a lawyer was a prominent position held in our society. They were the gatekeepers of certain knowledge and procedures that could help a client. This is because their high-level education, oration, access to resources and ability to navigate such resources allowed people to use a lawyer to accomplish their goals: obtain a licence, start a business, argue a lawsuit, write a will and so on. Today, precedents, case law and forms are readily available using publicly available software and in some cases for free to anyone who can look.
Lawyers are no longer the mysterious keepers of this information — it is more widespread. With the democratization of the tools that lawyers have, any lay person can create a contract or will or look at case law. It calls into question what a lawyer’s true value proposition actually is. This has been the case for some time now. In this sense, AI technology will not replace lawyers any more than precedent software tools will have done already. Rather, it will continue to expose those legal professionals who do not provide actual value to their clients. Ultimately, a lawyer can never be replaced by AI so long as he or she provides real value and solutions to a client.
All lawyers should ask themselves if they are providing real value to their clients. Real value is not something that can be replaced by any technology and is something that the majority of clients would pay for with little question. However, it is difficult to understand the concept so it’s best to use real life examples.
If you are a litigator, your ultimate job is to win the case for your client or reach a settlement that your client can live with. If you lose, then not only have you lost but your client has to still pay the lawyer’s fee so the loss is doubled. What’s worse is that your client could have the best case,, but it could be years before it is heard due to court delays (I’ve written on this subject before) and as a result, your client is likely to drop the case before it is ever heard. Despite the time spent on this, has the litigator provided value to the client?
In the case of a transactional lawyer, there is a different issue. A solicitor drafts contracts, wills, statements, letters — all to accomplish a goal; the idea being that these written agreements will have inherent value (ie. the transfer of assets from one person to another) and/or will protect your rights from being taken. But this is simply not always the case. In my experience, whatever is written may provide value because of the parties involved who are flexible enough to provide solutions to each other during adversity (in which case, a lawyer writing a contract is not necessary). The other option, however, is that the transaction turns into litigation, in which case whatever was written in the contract may be rewritten or reinterpreted by the judge, arbitrator and litigators who argue them (see above). In either situation, has the solicitor provided value to the client?
In both of the above scenarios, work-in-progress is created and fee write-offs or discounts are incurred. This has been a large problem with the billable hour model in general. If you are the lawyer and you haven’t been paid, you have to ask yourself: have I truly delivered $100,000 worth of value to this client or is this simply a reflection of time I’ve spent on documents that AI can replace?
If a lawyer is not providing value by virtue of providing his or her time, then how is value created? Taking the litigator for example, as mentioned earlier, the litigator must win or settle for something that works for the client. Since it is impossible to predict that your client’s case will win (without being unethical) the other way for the litigator to provide value is to convince both sides to agree to a workable settlement, and as a bonus, help accomplish the settlement.
This is extremely difficult but worthwhile and valuable. The lawyer would have to convince the opposing lawyer and their client to settle and to settle for an amount that works for the client. The lawyer would have to convince his or her own client who is equally as emotional, why settlement would work and terms of the settlement and then as a bonus to help the client obtain the settlement. For example, there was once a lawyer who negotiated a debt write-off from a lender in exchange for a material sum and the lawyer introduced the client to someone who could provide the settlement amount to help ensure it was settled. The nuance involved in managing the emotions involved and connecting the right people to create a solution is real value: this cannot be replicated by AI.
In the case of a transactional lawyer, the value involves getting truly involved in the business aspects of the transaction to ensure closing. This is not simply asking what the deal is and arguing about legal issues like indemnity baskets or the exact wording of earnouts which may all be reinterpreted in a court. Instead, this lawyer must understand exactly the purpose of the transaction, the key players, the reason for the transaction, be involved in financing and the actual business matters of the discussions.
It can be argued that the value proposed in these scenarios creates too much liability for the lawyer and that the lawyer should stay within the borders of legal matters but not cross the line into business issues. But matters do not always fit within a box and the deeper connection to client issues is precisely the value proposition that AI cannot replace — a professional who listens and provides real solutions to the client to justify the fees being charged regardless of time spent.
Legal matters often involve more than just applying the law; they require a nuanced understanding of human behaviour and connections to other professionals, even outside their field, to solve problems. By doing so, they will have nothing to fear from ChatGPT or anything else and instead will use AI for what it is — a useful tool in providing real value.
Jacob Murad is the managing partner and general counsel to BlueStar Equity, a private equity family office in Toronto, as well as president of KPA Lawyers Professional Corporation, a full service law firm in Mississauga, Ont. He has served as general counsel and director for a large number of private companies throughout Canada and responsible for the negotiation of complex mergers and acquisitions across a variety of industries. He is a member of the Law Society of Ontario’s Coach and Mentor Roster. He can be reached at firstname.lastname@example.org.
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