AI: Opportunities for law firms
Solicitors’ lack of confidence about lawtech and artificial intelligence (AI) could lead to them missing out on the opportunities – and put their clients at risk too, the Solicitors Regulation Authority (SRA) has said.
Its research found that solicitors perceived cybercrime to be “the greatest risk overall to the legal sector” over the next two years, but they feel less prepared for the risks caused by lawtech/AI.
The SRA commissioned BMG Research and Frontier Economics to help it better understand “high-risk market developments identified by law firms”.
Research for Risk in the Legal Profession included a literature review, a survey of 515 solicitors (384 working in regulated law firms, 102 in-house and 29 freelance solicitors) and 26 in-depth interviews.
It found that, while the overall levels of awareness and preparedness “suggest that firms are generally well-equipped to address risk, there are some areas where risk might affect clients or the ability of the regulated sector to service market demands”.
Cybercrime was perceived to be the greatest overall risk to the legal sector by 43% of solicitors, followed by lawtech/AI (36%).
When it came to the risk to their firms, solicitors again put cybercrime in the top position, followed by money laundering and inflation/increasing overhead costs.
Smaller firms cited inflation and changes in client demand as their top concerns, followed by regulatory/compliance issues.
Solicitors often sought expert advice to deal with the risk of cybercrime, recognising that relying on digital systems “was a vulnerability”, potentially leaving them unable to access data.
One partner in a mid-sized law firm commented: “We have had several instances of the computer systems simply not working and it includes security, which means you can’t get in or out of the building.”
Perceptions on the greatest risks varied with solicitor type, with in-house solicitors are more likely to see lawtech/AI as concerning.
The report found solicitors have focused on training, continuity plans, processes and policies to tackle the risk of cybercrime. “Levels of preparation and confidence tend to be higher in larger firms, with greater use of internal training and information sharing with staff.
“The evidence review also highlighted particular challenges for smaller firms, such as that small firms are less prepared to tackle cybercrime. There may therefore be a role for regulators in providing greater support to smaller firms, with provision of training and advice on processes that these firms may have less internal resource to provide themselves.”
Researchers said that generally solicitors reported “strong” levels of confidence in terms of their ability to identify and manage risks early, apart from when it concerned lawtech/AI.
Equally, though, lawtech/AI was the market development identified more than any other as presenting the greatest opportunities for firms, especially those in large firms.
The lower level of confidence around lawtech/AI “could mean that solicitors would miss out on positive opportunities that these areas pose, and prevent them from being able to help support clients who are trying to use AI to do things themselves”, the SRA said.
“There is also the chance that unregulated organisations offer competing services using this technology and not only could solicitors lose clients, but these clients could also be put at risk.”
Leave a Comment