AI Tools for Lawyers: A Practical Guide | Bloomberg Law (2024)

The AI innovations you need to stay ahead

For more than a decade, Bloomberg Law has been perfecting the power of artificial intelligence to help lawyers speed up and simplify legal tasks. With recent AI and machine learning breakthroughs, now even more is possible.

Artificial intelligence has existed for decades, but recently developed capabilities have led some legal professionals to question whether they can ethically integrate AI-powered tools into their legal practices. While some lawyers may be skeptical of AI in law and legal practice and the potential risks associated with using legal AI tools, the failure to understand and use AI could soon be considered a deficiency in legal representation.

Although AI holds promise of increased efficiency, workflow optimization, and strategic planning for lawyers, it also has significant risks. For example: AI can help lawyers quickly produce initial drafts of motions, legal briefs, contracts, and settlement agreements, which in the past have been time intensive. However, the use of AI in law also raises issues of algorithmic bias (when the algorithm itself is biased, or when an otherwise unbiased algorithm is trained on biased data), hallucinations (the phenomenon by which AI chatbots may confidently provide false information in response to a prompt), inaccuracies, and confidentiality concerns.

Here, we take a comprehensive look at the current AI landscape in law as well as available AI tools and technology for lawyers, potential pitfalls and risks of AI-powered legal solutions, and the potential future of AI in law. Read on to learn more about the impact of AI on the legal profession, and how lawyers can strategically and ethically use this technology to both automate and simplify legal tasks.

What is artificial intelligence?

In its simplest form, AI is an overarching description for technologies that use computers and software to create intelligent, humanlike behavior. If you’ve ever used Siri or Alexa, or conducted a Google search, you have used AI. If you’ve ever received recommendations for products or services based on past purchasing or browsing history, you have also used AI.

What is generative AI?

A generative AI tool generates “output,” typically in response to instructions, called the “input” or “prompt,” from a user. The output is based on an algorithmic model trained on vast amounts of data, which could be text, images, music, computer code, or virtually any other type of content.

What makes generative AI different from more familiar algorithm-based machine learning technology is that it draws on enormous data sources to instantaneously create seemingly new, task-appropriate content such as essays, blog posts, poetry, designs, images, videos, and software code. With the release in late 2022 of ChatGPT, a sophisticated chatbot from AI research nonprofit OpenAI, more attention has turned to generative AI and large language models.

How is machine learning different from artificial intelligence?

AI is an umbrella term for machine functions that can emulate human processes. In the legal context, computers and software frequently employ AI in the form of machine learning (ML) that facilitates the automation of legal work and improves its performance of specific tasks over time.

There are three types of ML:

1. Supervised machine learning: a subset of AI in which the application seeks and recognizes patterns within predefined data sets. These data sets are typically created by human domain experts who act as guidance counselors of sorts to the machines.
2. Unsupervised machine learning: a type of ML that creates data sets without known outputs or predefined data. In this type of application, there isn’t an expert-created data set guiding the tool’s behavior. The software, in essence, learns and adapts to the inputs on its own.
3. Reinforcement learning: a type of ML that “rewards” the application to create correlations using an algorithm that incorporates data feedback and learns from it to uncover the ultimate processing path.

Which AI is best for law?

Because lawyers work in a field that places utmost importance on accuracy, professionals in this space should be cautious about relying on tools that employ purely unsupervised learning techniques. To avoid the risk of inaccuracies or missing documents, the best AI for legal professionals utilizes supervised machine learning tools.

The value in AI is the ability to analyze massive amounts of data and unearth details that are undetectable to the human eye. Yet without human expertise ensuring the quality and accuracy of that data, AI can do more harm than good.

For example, generative AI can help draft briefs more quickly, but hallucinations can jeopardize accuracy. Similarly, a major benefit of AI for legal research is that these tools allow attorneys to gather insights from large sets of data and focus on the information that matters most, enabling them to be more efficient and more strategic, and offer more value to their clients. But while legal research tools can help attorneys feel more confident that they’ve left no stones unturned, they can also pull information from unreliable sources.

For lawyers, supervised machine learning is the best solution because it offers faster research than ever and less risk of inaccuracies or missing documents. The result is nearly instant access to reliable data and insights that can give lawyers a leg up on their competition.

How is AI being used in the legal profession?

Some professionals in the legal industry have been deploying AI for the better part of a decade to parse data and query documents. However, the explosion of interest in powerful tools like ChatGPT has encouraged more lawyers to experiment with AI tools but has also led to questions about their use. While some legal professionals have embraced legal AI tools, some law firms and in-house legal departments have entirely banned the use of this emerging technology due to the potential risks.

In our 2023 State of Practice: Legal Landscape report, we surveyed more than 450 legal professionals about their familiarity with generative AI and how their organizations have responded to this technology boom. Law firms and corporate attorneys alike acknowledge the potential of generative AI but are cautious about its ethical implications and bias issues and skeptical about the notion of AI replacing lawyers. For those using the technology for work, most trust generative AI to a point but want legal professionals to check the work for errors.

Top 10 ways lawyers are using AI

The main ways that legal professionals are using generative AI in their practice are:

1. Drafting/templating communications (e.g., memos, emails, correspondence to opposing counsel, etc.): 58%
2. Conducting legal research: 53%
3. Summarizing legal narratives: 42%
4. Reviewing legal documents: 34%
5. Drafting/templating legal contracts: 23%
6. Conducting due diligence: 21%
7. Reviewing discovery: 15%
8. Negotiating/redlining contracts: 11%
9. Preparing case filings (e.g., pleadings, motions, jury instructions, etc.): 8%
10. Estate planning: 2%

What percentage of lawyers use AI?

While both in-house and law firm attorneys are becoming more familiar with generative AI, more of them use it personally than professionally. Forty-two percent of survey respondents said they’ve used generative AI personally or just to try it out, but only 14% reported that they’ve used the technology to perform work tasks – mostly to draft legal communications or for legal research.

How many law firms are using AI?

Based on our , law firms appear to be more actively engaged in advising clients on generative AI than adopting the technology themselves. Respondents indicated that their law firms are responding to generative AI by:

• Having internal talks to better understand it: 53%
• Developing internal policies on using external AI technologies: 36%
• Restricting the use of external generative AI: 31%
• Advising clients on using AI in their business: 30%
• Purchasing or investing in generative AI technology: 11%
• Developing an internal generative AI tool: 7%
• Encouraging the use of generative AI: 7%

What AI tools and technology do lawyers use?

Lawyers are using generative AI tools for legal writing and large language models like ChatGPT to not only generate legal communications and documents such as contracts, leases, and wills, but to conduct legal research as well. By using tools that employ advanced AI techniques, attorneys can gather insights from large sets of data and focus on the information that matters most, enabling them to be more efficient and more strategic, and offer more value to their clients.

AI for legal research

Using AI for legal research is one of the most common ways legal professionals use generative AI in their practice. The newest AI legal research tools employ technologies such as natural language processing and machine learning to help attorneys more quickly discover important information that would otherwise take hours of manual research to find. AI-powered legal research tools can reduce time spent on research, help discover issues the human eye might miss, and help produce better research findings.

AI for legal document review

There also are legal AI tools that can specifically help with transactional law. Many attorneys are using AI – especially machine learning – for faster and more consistent review of documents such as legal contracts. For example, Bloomberg Law’s Draft Analyzer uses several machine learning models to identify how draft language may deviate from the market standard and to help attorneys answer the question of what language their counterparty usually agrees to.

By utilizing AI-powered language models, lawyers can automate essential but tedious contract-related functions, allowing attorneys to spend more time strategizing and negotiating. AI-powered contract management tools can also help lawyers store, search, and negotiate contracts.

AI for discovery

One of the most common ways AI is used in law is during the electronic discovery (e-Discovery) process. During e-Discovery, lawyers identify and organize electronically stored information (ESI) in response to a request for production in a lawsuit or investigation. ESI includes, but is not limited to, emails, documents, presentations, databases, voicemail, audio and video files, social media, and websites.

The e-Discovery process is often taxing for legal professionals due to the amount of ESI that legal teams must sort through. AI-powered e-Discovery software can streamline the process and help legal professionals more efficiently identify relevant ESI using capabilities such as advanced algorithms, machine learning applications, process automation, and text analytics.

AI tools and technology such as e-Discovery software save valuable time and allow lawyers to instead focus on more strategic tasks. Ultimately, law firms and in-house legal teams can increase their productivity, cut labor costs, and change the value proposition for delivering legal services to their clients and stakeholders.

What are the ethical risks of using AI in legal work?

With the availability of various AI-powered tools, lawyers may feel tempted to jump right in and try a few. But before taking the leap, it’s crucial to understand the risks surrounding the use of AI in the legal profession – and the laws and regulations already being put in place to address them.

While 69% of survey respondents believe generative AI can be used ethically in legal practice, the survey also found that most attorneys are “extremely” or “moderately” concerned about a variety of generative AI issues.

The top areas of concern among legal professionals are:

1. Deep fakes (e.g., human impersonations)
2. Hallucinations and accuracy of AI-generated text
3. Data and privacy
4. Model bias
5. Intellectual property
6. Job security

With these ethical concerns and other issues in mind, today’s lawyers must balance the efficiencies of generative AI with compliance to ensure the use of AI is compatible with their professional ethical obligations.

Industry guidance on the ethical use of artificial intelligence

Some states have already suggested or enacted AI laws and regulations. In addition, regulatory bodies and bar associations across the U.S. are beginning to take significant strides to address the ethical implications for attorneys who use AI, and to propose guidelines surrounding the use of AI for legal professionals. These early moves, although narrower in scope, may set the trend for the legal industry’s inevitable adoption of generative AI tools in everyday practice.

States such as California and Florida have begun their foray into providing guidance on the application of generative AI tools by focusing largely on how lawyers can apply existing ethical rules to such novel tools. For example, the California Bar’s Committee on Professional Responsibility and Conduct (COPRAC) has formally recommended that the California Bar’s Board of Trustees adopt recommendations regarding generative AI usage in legal practice. In its list of recommendations, COPRAC urges the creation of a resource that explains how the existing Rules of Professional Conduct “can be applied to generative AI use at this time,” and details how lawyers may use generative AI tools in a manner consistent with those rules. The guidance includes suggestions that lawyers consider disclosing generative AI use to clients, review all generative AI outputs for accuracy, and be aware of possible biases, among others.

Other state bar associations have created dedicated task forces to study AI before making significant changes to ethics rules. This deliberate pace suggests a commitment to thoughtful and reasoned advancements in the integration of AI into legal practice, steering clear of impulsive regulatory measures that lack a comprehensive understanding of AI’s nuances, which may well set the trend for the legal industry.

How artificial intelligence is transforming the legal profession

AI has the potential to transform the legal industry as a whole – from law firms and in-house counsel to legal operations and even law schools.

The emergence of generative AI points to a future where AI may be embedded into multiple levels of an attorney’s work. AI will augment the work that individual attorneys do, and it will likely become woven into the fabric of daily tasks. We are already seeing this change, for example, in the integration of AI as a copilot across common productivity programs, such as word processing, timekeeping, and communication platforms.

AI will also transform the delivery of legal services at the practice level. Law practices that conduct similar types of legal work repeatedly will be transformed by AI automation and augmentation at scale. The inefficiencies and redundancies at the core of these tasks will be radically optimized through AI – from devising legal strategies to reviewing evidence and drafting briefs – enabling attorneys to focus on the strategic work that’s best suited to their roles. This change will create opportunities to scale – or increase revenue at a faster rate than cost – that didn’t exist before.

In addition, AI will affect the study of law. While some professors have shared concerns that AI for law students encourages cheating, many law schools and professors proactively incorporate AI ethics into the classroom. For instance, some professors allow or even require students to experiment with generative AI tools like ChatGPT, but typically note that blame will fall on the student if the technology outputs incorrect information the student doesn’t rectify.

Given the ongoing impact of AI on the legal profession, educators understand that aspiring lawyers need to be fluent in AI and understand how it can and cannot be used in the practice of law.

Can AI replace paralegals?

There is potential for AI to impact certain duties performed by legal assistants, paralegals, and even early-career attorneys. However, it’s important to remember the use of AI must be compatible with the rules of ethical conduct that lawyers abide by.

For instance, the American Bar Association (ABA) Model Rules of Professional Conduct, which serves as a model for ethics rules in most legal jurisdictions across the U.S., specifies law firms’ and associations’ responsibilities regarding legal assistants. The rule notes that it’s a lawyer’s responsibility to ensure any nonlawyer’s conduct aligns with those of the supervising lawyer. Notably, the work of AI would be subject to this rule.

Lawyers also have a duty to train and supervise nonlawyers who assist them, and this duty also applies to AI assistance. If generative AI doesn’t understand, for example, the legal nuances in a particular jurisdiction, or if it includes other errors, the supervising lawyer is responsible for any mistakes it might make.

So, rather than replacing jobs like those of paralegals, it’s more likely that AI will help legal teams – especially in-house legal departments – to retain more work in-house. This will, in turn, allow these teams to be more selective in the work they outsource, and give them more leverage to structure their fees under alternative fee arrangements for work sent to outside counsel.

Legal software powered by AI you can trust

With recent AI and machine learning breakthroughs, more legal research platforms are starting to incorporate AI into their products to assist with legal matters. The nuances and challenges of AI and machine learning aren’t new to us – in fact, we’ve been testing and building the Bloomberg Law all-in-one legal platform with the most cutting-edge AI technology for more than a decade. With the unmatched speed of AI layered into the world’s top legal intelligence platform, legal professionals can prepare better and faster than ever before.

Want to learn more about how generative AI is transforming the practice of law? Download our report on AI and the Legal Profession in 2024 to explore AI’s potential impact on important areas of law.

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