Generative AI Is a Catalyst for Law Firms and Talent Development

Generative artificial intelligence and large language models are here. And soon enough, they won’t be optional.

We’re not technologists—we both began our legal careers at a global law firm about 30 years ago. One of us stayed at the firm and now leads it; one of us co-founded and co-leads a global investment firm. We both believe generative AI and related technologies will bring massive change in what law firms do and how they do it.

Adapting to these changes can enhance the ability to be creative for their clients and give young lawyers the tools to develop. Lawyers must prepare for how this new world will impact the legal profession.

Over the last 30 years, there’s been some enormous technological change in the practice of law, thanks to automated redlining software, email, data sites, video conferencing, and the ability to use these tools from anywhere.

While speed and convenience have increased, the basics of legal practice have changed relatively little over this period. Day-to-day lawyering has gotten more convenient and hectic, and while the profession has deployed technology in many areas, the model hasn’t fundamentally changed.

There’s been enormous hype around the possibilities and perils of generative AI. Routinized, high-volume drudgery is the perfect target for the refined automation of this technology, making it a catalyst for fundamental change to the law firm model.

For example, junior lawyers prepare a first draft of an agreement by looking at an incomplete or biased population of models and thinking about how to construct the draft based on what they know of the transaction, the key issues, and the relative bargaining power of the parties. These agreements could more easily—and accurately—be prepared based on smart queries made to algorithms that track a curated pool of models in a much more thorough and data-driven manner.

So then what will lawyers be for?

Law firms are quintessential “talent” businesses, dependent on the ability to attract, retain, develop, and promote intelligent and driven people. But law firms need to rethink and rank the skills and traits that will maximize the likelihood of developing successful lawyers who deploy their experience and judgment with their generative AI copilot in the service of clients.

Here are a few key guideposts we see on the road ahead:

Focus on Process Management. Lawyers should distill their experience into playbooks that detail the processes that underlay the work they perform in complex transactions and disputes. Going through the exercise of reducing what lawyers reflexively do into an organized playbook will make them better practitioners by permitting them to think about what needs to get done and how to instruct their teams clearly at inception and during a process.

These organized playbooks can then be used to build the models on which generative AI can operate. Clients will feel less at sea as lawyers will be able to provide better clarity on the path of what they’re getting into, what issues they will confront, and what typically matters. Not incidentally, total fees will be easier to predict.

Strengthen Empathy. Much of what people call judgment is the product of experience over time—getting in the reps. Generative AI can eliminate the need for lawyers to get in their reps and leave them time to think, but this is only valuable if the human knows what to think about. Increasing lawyers’ capacity for empathy is one bulwark against the loss of early-career learning if properly integrated into law school curricula and training at law firms.

Heightened focus on listening and understanding the goals of clients and counterparties will permit new lawyers to get up to speed on issue-spotting problems and goals, on seeing patterns and developing judgment, while letting their AI copilots handle the repetition.

Learn Tech and Understand Logic. Understand and embrace the technology. Being the person who knows what generative AI means, what it is and isn’t capable of, and what its limitations are will be essential in setting expectations and avoiding pitfalls.

In our experience, the most successful professionals are those who have taken the time to understand adjacent disciplines and develop their mental models on how accounting, tax, marketing, and compliance works. Even without being experts in any one of these fields, they had instincts and contacts in them and could anticipate issues and drive process. Be that person.

Preserve Creativity. Generative AI is capable of analyzing and summarizing in natural language vast amounts of data. But it’s not going to suggest a novel legal argument or propose a first-time contractual provision. How do we continue to develop the talent of creativity, and how do we preserve the value of novel solutions, in the face of a machine that surveys an ocean of data and doesn’t find it there? We need to make sure that “this has never been done before” is an acceptable, even prized, statement in the practice of law.

By focusing on process management, strengthening empathy, learning the technology, and preserving creativity, law firms will be better equipped to use generative AI for the benefit of clients and themselves. Adapting to the new world of talent development will then permit the best firms to think about the many other implications of generative AI, including what clients will be able to in-source; clarity, speed, and models of billing; changes in organizational design and in industry structure; and the advantages of investing in data integrity right now.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Michael Gerstenzang is the managing partner of Cleary Gottlieb with focus on private investment funds.

David Stiepleman is co-president and co-founder of Sixth Street, a leading global investment firm.

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