How law firms can help businesses benefit from generative AI

Generative AI is likely to be one of the most transformative technologies across industries, but human intervention remains necessary in most cases to ensure the information produced by such systems is accurate and useful.

After the hype over ChatGPT and its capabilities, there is some disillusionment in the market over the extent of the data generative AI systems need to produce qualitative results – with experiences to date showing that conclusions drawn are not always logical, or indeed that the systems themselves are not always prompting the right questions. This sits in the context of the need for more training in this regard but is accompanied by increasingly tight IT budgets across industries.

The relatively nascent nature of generative AI was highlighted earlier this year when Luxembourg’s central bank and main financial regulator published the results of a joint study they carried out into the level of adoption of AI and other innovative technologies in the Luxembourg financial sector.

Banque centrale du Luxembourg (BCL) and the Commission de Surveillance du Secteur Financier (CSSF) carried out a survey of firms within the sector between October 2021 and January 2022. They found that, at that time, the level of adoption of AI and other innovative technologies in Luxembourg financial services was “fairly limited" – just 32% of respondents said their firm had invested in AI.

The study uncovered 158 different AI use cases reported by firms, with the majority of those still in production at the time of the survey. The most popular uses cases reported were for anti-money laundering or fraud detection, process automation, for marketing or product recommendations, gleaning customer insights, and for cybersecurity. While the BCL and CSSF referred to “the recent public enthusiasm for advanced generative solutions like ChatGPT” in its conclusion to its study report, which was published in 2023, there was no sense from the study findings that generative AI was being used, or even envisaged, in the market between October 2021 and January 2022.

The BCL and CSSF suggested they intend to track how AI trends change in Luxembourg’s financial services sector in the coming years. In the summer, the International Monetary Fund (IMF) called on financial services regulators globally to “strengthen their institutional capacity and intensify their monitoring and surveillance of the evolution" of generative AI.

Legal advisers have an important role to play to offer time-pressed in-house legal teams with guidance, market overview, and a general sense on how the cooperation between human and digital ‘colleagues’ can work best – how an optimum of time and fee savings can be achieved while at the same time generating qualitative results.

Open collaboration is needed to establish what is working well with generative AI currently and to identify where improvements are necessary. Being open about the new opportunities arising is often difficult for businesses that might be wedded to particular ways of working. In legal services, there is an increasing and justifiable expectation that law firms provide not just excellence in legal services, but also that they incorporate legal technologies into their own processes to deliver efficiencies and, where possible, cost savings to clients – and this includes legal tech tools linked to generative AI, which is likely to be at the heart of detailed legal technology strategies for years to come.