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Will the Rise of Artificial Intelligence Lead to More Job Cuts at Law Firms?

Updated: Nov 27, 2022

A PwC report argues that AI could create more jobs than it displaces over the next 20 years.

A report by PwC says artificial intelligence could create more jobs than it displaces over the next 20 years—a conclusion that may allay concerns that new technology could lead to widespread cuts across the legal profession.

PwC’s report cites the “professional, scientific and technical services” sector, which includes law, as one of two sectors expected to see the largest net increase in jobs as a result of the rise of AI, with a 16 percent increase expected by 2038.

John Hawksworth, the chief economist at PwC and author of the report, says lower-skilled jobs are most at risk, such as clerical and research roles “which could now be open to automation.”

The rapid rise in the adoption of AI technology has prompted expectations that law firms will look to automate more low-level work, reducing their reliance on junior and support staff. Earlier this year, commercial property company CBRE found that almost half of the largest law firms in London are expecting to see job cuts as a result of the increasing use of AI.

Meanwhile, a Law Society report published last October found that 38 percent of large law firms had replaced work previously carried out by non-fee-earning staff with automated, IT-based systems during the 2016-17 financial year.

Clyde & Co commercial litigation partner Tom White, whose practice focuses on the IT sector and has written about the use of AI by professional services firms, says there will be an “inevitable impact” as AI “strips out a layer of work,” and that “fact-finding processes will diminish.”

“Support staff will always be the first to feel it,” he said. “Secretarial is already shrinking.”

For fee-earners, however, the picture could be more positive.

“Automation might also allow lawyers to spend more time adding value by using their expert judgment and taking on additional cases,” Hawksworth said. “The growth in jobs, as for accounting, might come indirectly via the extra economic growth that AI and related technologies would generate, so leading for a greater demand for legal services in a larger economy.”

This view is shared by many industry players.

“It’s a journey which many firms are now going through. [The rise of AI] is going to happen, so how are we going to embrace it?” asks Ashurst’s Mike Polson, the director of the firm’s legal services innovation arm Ashurst Advance. ”It is more an opportunity than a threat. It’s looking to replace more mundane tasks, but advisory work is the reserve of lawyers.”

Polson said that for many lawyers, AI presents concern rather than an opportunity. “But things like contract automation have been around for a while,” he said. “It offers quality in terms of consistency, and there is an increasing range of tools to automate.”

The benefits of AI are most likely to be seen in process-driven work, such as in insurance and personal injury claims. But for higher-value endeavors, Polson said it is unlikely AI will threaten “cut-and-thrust fee-earning work.”

“I don’t see any threat to the advisory element of legal practice,” Polson said. “Tech is important—but it won’t take you to the final answer.”

Similarly, Herbert Smith Freehills global alternative legal services head Libby Jackson shrugs off any concerns over the effect of AI on fee-earning work in general, saying there is always a “tremendous value to human judgment,” adding that “tech is enabling a different way of working.”

Many top firms have adopted AI technology in recent years, and earlier this week Eversheds Sutherland agreed to a partnership with Luminance, the Slaughter and May-backed venture that uses pattern recognition and machine learning algorithms to read legal documents.

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