AI’s disruption of law firms could hold lessons for the broader business community: Opinion

Like the rest of the developed world, Singapore is grappling with increasing graduate unemployment. In July, the government announced that it is watching the employment situation of graduates closely, as a 2025 survey showed that fewer graduates are finding jobs in the first year. 

Artificial intelligence (AI) has not yet been rolled out in businesses en masse. When companies do eventually, and inevitably, integrate AI into their businesses, the impact on jobs will be multiplied many fold. Bill Gates thinks that humans will eventually not be needed for most jobs. “It’s very profound and even a little bit scary – because it’s happening very quickly, and there is no upper bound,” he said. 

Undergraduates and those yet to embark on a tertiary education are anxious about employment prospects, while parents have no idea which courses of study to guide their kids towards.

AI, the great disruptor of our times, has arrived and lawyers are not being spared. If the experience of law firms in operationalising AI is any indication, the broader business community will need to make bold moves and effect sweeping change to capitalise on the newest disruptive technology.  

AI-powered legal technology for law firms

AI-based legal technology is starting to be adopted in law firms, and the use cases are startling and – for newly qualified lawyers – frightening.

Legal tech can now generate a research memo, review and summarise hundreds of due-diligence documents, and produce a serviceable first cut of a contract, all in seconds. Traditionally, these were time-consuming tasks assigned to junior associates who had to be trained and have their work checked by senior lawyers. If AI can now do the work of those juniors, with the seniors still doing the checking, that will reduce a lot of the tedious tasks. It will also mean that entry-level jobs are most at risk.

The use case for AI adoption is compelling, but in order to reap the full productivity rewards, businesses need to make a major transformation. 

Let’s start with the technical challenges.

AI work solutions are not plug-and-play. They can significantly improve efficiency, but only when the law firm adopts and adapts effectively. Work processes have to be redesigned around what AI is good at, and where it fails. For example, hallucinations are still common, so understanding how to optimise the prompt to get the product you need is an essential skill set to be acquired.

Understanding the technology is also key: Some AI platforms are better for drafting, and others, for research. Getting the most out of AI requires significant time and training. Then again, the leading legal AI of today may well be obsolete tomorrow. Law firms will have to constantly scan the digital horizon to ensure that their technology continues to be suitable and secure.

Risk management is another important factor. Think about client confidentiality, AI-related governance and ensuring that the use does not breach clients’ engagement terms. 

But more crucial is overhauling how we equip lawyers.

If AI will now be able to undertake the laborious work, newly qualified lawyers must learn to check AI’s work product with a critical eye, and through a commercial lens. Experience and skills they would have picked up by osmosis and rote-work over three years must now be crammed into purpose-built intensive training programmes. 

Lawyers of the future will no longer market themselves just on their knowledge of legal cases and principles, but in being best-in-class (or better-than-computer) in crafting commercial solutions and navigating legal ground. 

For example, AI is good at telling humans what the law “is”, but cannot yet say what it “should be”. A good litigator will be able to convince a judge that the law needs to develop in a certain direction, or that true justice applied to a particular set of facts need not align with precedent cases. That takes more than a deep knowledge of existing jurisprudence; it requires critical application and persuasive advocacy.

Nor can AI interpret the facial expression and body language of the client, the counterparty or the judge. Good lawyers are able to “read the room” and adapt their approach. Training must thus focus on people skills, negotiations and strategic solutioning.       

If the hallmarks of a capable lawyer in an AI-powered future are shifting, the criteria used to select human capital must keep up. Law firms can no longer just hire associates who aced exams by paraphrasing textbooks. Except for the prodigy possessed of an eidetic memory, no student will out-memorise a computer. The different attributes needed are harder to spot from reading an academic transcript. Human resource practices must evolve.

Another challenge is the human one. Companies adopting AI report that the resistance to mindset changes necessary to facilitate strong and sustained engagement is a key impediment. Lack of top management buy-in and patchy implementation will hamper efforts to “bring people along” on the transformation journey. Change management coaching to align lawyers of all different seniorities to the AI strategy becomes another “must have”.

Based on what the current legal technology is able to do now, I estimate that law firms using AI will need 20 to 30 per cent fewer fresh graduates for the same amount of product. On the bright side, as lawyers are able to do more value-adding work by leveraging technology, their remuneration will go up, and savings can be passed onto clients. It isn’t a zero-sum game for law graduates, however, as new fields of professional services will need to be created, such as legally trained knowledge-management experts who can help law firms use AI intelligently. 

...and for Singapore

If Singapore aims to be a progressive financial and services centre, with AI-powered technology a lynchpin of that mission, it will also need to make some transformative systemic changes.

Foremost is education. Our school and examination systems still predominantly reward rote learning and the ability to regurgitate large tracts of content. Teaching and scoring modalities should focus also on critical analysis, communication and people skills, and creative solutioning. Curiosity needs to be prized above a good work ethic. We keep saying that our students should be encouraged to try and to learn from their failures, but has the examination system “got the memo”?

The problem is exacerbated in tertiary institutions, where the tenure system and recognising academics for their published writing do not necessarily breed good teachers who can prepare undergraduates for the workforce. Universities may need to become both ivory towers of intellectual thought and – horrors! – vocational institutes. 

Next comes the business and professional opportunities AI presents. To help businesses operationalise AI effectively, a whole new class of professional talent needs to be developed. IBM reports that a lack of AI expertise is a significant roadblock to its integration. Businesses need guidance on which AI solution to choose, how to re-design work processes, what guardrails to set up, and how to hire and train employees. 

AI is bringing a revolution. The productivity gains it offers will be good for the economy: enterprises will cut costs, which will cheer clients and boost bottom lines, and workers will suffer less from burnout.

But the business world doesn’t have the tools to implement this effectively, and the system simply isn’t ready. 

Singapore has always been good at the sharp pivot. It’s crunch time again.

The writer is joint managing partner, TSMP Law Corp

Source: The Business Times © SPH Media Limited. Permission required for reproduction.

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