This Is How AI Could Impact Our Legal System (and Why Entrepreneurs Should Care) Here's how AI might influence the future of our legal system — and its potential benefits and limitations for businesses of all sizes.

The effect of artificial intelligence on practically every aspect of our lives is undeniable. Since the enforcement of laws and regulations is essential to the business community, I'm curious how AI will impact our legal system.

While the jury is still out on precisely how AI will alter future legal decisions, every entrepreneur should take a moment to examine the advantages and disadvantages of AI, from legal opinions to court rulings. After all, our legal education system teaches aspiring lawyers to think critically and objectively. Can AI learn how to issue fair rulings without any preconceived bias?

Attorneys, judges, legal analysts and support personnel are already using AI for various purposes. Let's take a practical look at how AI might influence the future of our legal system by exploring its potential benefits and limitations for businesses of all sizes.

AI's current impact on legal cases

The early adoption of AI in the legal community dates back several decades. Services like Westlaw Edge and Lexis use AI technology to streamline document searches. Additionally, tools such as Luminance and Klarity utilize machine learning to review contracts and provide case analyses.

The use of these AI tools can significantly reduce labor costs, as they quickly generate vast amounts of data that would traditionally take a team of first-year associates hours to compile. For instance, an associate could spend countless hours researching the summary judgment habits of a specific judge; however, an AI tool can produce this information in seconds.

Most of us can recall our favorite legal TV shows, particularly the court reporter who is often seen frantically typing near the witness stand to capture every syllable and sound. The introduction of AI in the recording and transcription of depositions, hearings and trials could undoubtedly transform the legal transcription industry.

Transcriptions are essential in the legal field, as attorneys, judges and clients rely on accurate legal transcripts to review past cases and hearings in order to prepare for future legal situations. Unfortunately, the legal industry is currently facing a shortage of qualified court reporters.

In California, the court reporter shortage has resulted in over 525,000 legal proceedings being completed without a verbatim (exact word-for-word) transcription available. This situation is alarming and requires immediate attention. How can appellate or other courts interpret a judge's ruling or assess a witness's performance on the stand without accurate transcriptions? Unfortunately, not all problems can be solved with financial incentives, as the state has already offered higher wages to keep and attract court reporters.

When courts rely solely on AI over human transcription services, accuracy rates drop from around 99% to approximately 62%. AI tools can improve many aspects of our lives. However, none of us wants to see AI decrease our productivity or efficiency.

How AI benefits legal work

We touched on a few examples of how AI can save time and money through expedited searches. Smaller firms that could not afford the staff or expertise to produce case information quickly can now achieve results previously available only to larger firms with teams of associates and support personnel.

Quicker access to complex case law and enhanced preparation tools will certainly enhance case preparation. Cases that previously took months to prepare for can now be finalized in days or weeks. Envision the benefits of a faster and more efficient legal system for businesses. Legal experts conservatively estimate that legal AI tools can save an average of four hours weekly, allowing attorneys to gain more billing hours.

There's no doubt that the legal community must embrace the benefits of AI. A practical starting point is becoming familiar with AI research tools and their capabilities. Today, judges have access to AI-powered platforms to assist in making bail and sentencing decisions.

Everyone benefits from a more productive and efficient legal system. Like other software platforms, AI is a tool that, when used properly, can benefit both businesses and individuals.

Risk and limitations for legal AI

With every benefit comes a risk. When misused, AI can inflict significant damage and legal injury when inaccurate or false information is presented as fact.

In 2023, two New York attorneys used ChatGPT to file a brief that referenced cases that never existed, which contained non-existent quotes. As early AI users often say, AI can easily and quickly go "off the rails" or "garbage in, garbage out."

Another example is bias. AI scrapes from prior rulings, and based on a bias from one or more judges or juries, could negatively impact AI output. Legal AI algorithms learn from previous cases and cannot distinguish between a biased ruling and a good judicial decision.

A lack of adequate transparency is yet another example. It's an understatement to say that the legal system is complex. Algorithms often operate as "black boxes," meaning understanding how an AI tool reaches a conclusion isn't transparent or obvious.

Think of the use of AI like a children's daycare center. Although the youngsters are smart and quickly learning new skills, they still require oversight and correction.

The same holds true for AI. Law firms and attorneys must thoroughly review all AI-generated output for accuracy and potential bias. In other words, use AI for speed, but use humans for accuracy and compliance. Our human transcriptionists are trained to double-check their work. AI-generated transcripts are not checked for omissions and errors, and that's why you will see so many errors.

Will AI reinvent our court system?

Precisely how AI will impact our future court system is unclear. What we know for sure is that the legal industry's use of AI is here and growing rapidly.

Will future court hearings and trials be conducted remotely, with attorneys pleading cases to an invisible "Judge Oz" behind an invisible curtain and devoid of human emotion? I hope not, as the example sounds too callous. Human judges are not in danger of being replaced by AI, at least not anytime soon.

A year-end report authored by the U.S. Supreme Court Chief Justice in 2023 recognized the ability of AI to solve some problems and compile data remains unparalleled. He also noted that AI is no replacement for wisdom, experience and judgment. That's sound advice for any business, whether it's my transcription company or the Supreme Court.

Transparency and trust are vital components for any business. Why should we treat AI any differently?

Ongoing legal AI optimism

As time evolves, AI will play an increasingly significant role in our legal system, business and daily lives. I don't fear AI. However, I hope that AI industry leaders create future algorithms with thoughtfulness, fairness and integrity.

Entrepreneurs and legal professionals at every level should embrace AI. At the same time, everyone should incorporate viable safeguards, stay informed on new AI advancements and triple-check AI-generated output.

AI can definitely save time and increase production if used correctly and ethically. With continued advancement, there is much to gain from using AI, especially in our legal system.