How AI Is Changing Law and M&A: Corporate Lawyer Explains

Summary

In this insightful discussion, business attorney Brett Senis explores the profound impact of AI on the legal profession, specifically in mergers and acquisitions (M&A). He highlights how AI tools like ChatGPT are reshaping low-level legal tasks, such as contract generation and due diligence, offering increased efficiency and reduced costs. While acknowledging AI's potential to replace routine work, Brett emphasizes that strategic, high-value legal services—such as negotiations and complex legal analysis—remain beyond AI’s reach. The evolving landscape is forcing lawyers to adapt, with a growing need for added value in strategic roles, as AI continues to improve.

Takeaways

• 😀 AI is significantly impacting the legal field, particularly in M&A, but it is not yet at the stage where it will replace lawyers entirely.
• 😀 Technology in law has been evolving for years, but AI's ability to understand context and improve efficiency is unlike anything seen before.
• 😀 Lawyers are increasingly leveraging AI tools like ChatGPT to create, edit, and review contracts, offering quicker and more cost-effective solutions.
• 😀 Clients are more informed and often come to lawyers with AI-generated drafts, prompting lawyers to fine-tune rather than create from scratch.
• 😀 AI can create and spot issues in contracts, but it's still not advanced enough to fully replace the human judgment and strategic insight lawyers provide.
• 😀 The traditional legal workflow is shifting as clients find ways to handle lower-level tasks (like contract creation) themselves using AI tools.
• 😀 AI can streamline due diligence, issue spotting, benchmarking, and smarter redlining, particularly in M&A and investment banking sectors.
• 😀 While AI can automate routine tasks, the human element of strategic thinking, negotiation, and customizing solutions remains irreplaceable.
• 😀 Lawyers who do not consistently add value to their work are at risk of being replaced by AI, as clients turn to more efficient solutions.
• 😀 AI is rapidly advancing, and its impact on law and business operations will continue to grow, with companies like Goldman Sachs already adopting AI for various tasks.

Q & A

How is AI changing the legal profession, especially in M&A?

AI is transforming the legal profession by handling lower-level tasks such as contract generation and issue spotting. It helps streamline routine legal work, making processes more efficient and cost-effective. In M&A, AI tools like ChatGPT are being used to draft documents, analyze contracts, and perform due diligence. However, AI is not yet capable of replacing the high-level, strategic work that lawyers do, such as negotiations and complex legal analysis.

What impact has AI had on Brett Senis' legal practice so far?

Brett Senis has noticed AI's growing impact, particularly with clients using AI tools like ChatGPT to generate basic legal documents and solve routine legal issues. While he still provides high-level strategic advice, he acknowledges that some of the tasks he previously handled are now being done more efficiently by AI, reducing the need for certain types of legal work.

How does AI compare to previous legal technologies like LegalZoom?

AI, especially ChatGPT, is far more advanced than earlier technologies like LegalZoom, which primarily offered template-based legal documents. While LegalZoom provided low-cost legal solutions, AI can understand specific needs, generate tailored documents, and adapt to the context, making it more powerful and versatile than previous one-dimensional tools.

Can AI completely replace lawyers in the near future?

No, AI is not likely to replace lawyers entirely in the near future. While it can handle routine tasks like document generation and issue spotting, it cannot yet perform complex tasks like negotiations, strategic advice, and high-level legal analysis. AI is a tool that complements lawyers, but it does not replace the need for experienced professionals in nuanced legal work.

How are clients using AI in legal services today?

Clients are increasingly using AI tools like ChatGPT to create basic legal documents, such as contracts and agreements. They leverage AI to draft initial versions of documents, spot issues, and save time and money. Some clients also use AI to do their own research, which was previously done by lawyers. However, when it comes to high-stakes legal matters, they still rely on professional legal counsel.

What does Brett Senis mean by 'low-level' legal work?

By 'low-level' legal work, Brett Senis refers to routine tasks that do not require specialized knowledge or deep legal insight, such as drafting basic contracts or using templates. These tasks are often repetitive and do not involve complex strategic thinking, which is where AI tools like ChatGPT excel.

How has the legal industry's adoption of AI changed over time?

The legal industry's adoption of AI has been gradual but is becoming more common, especially among larger firms. Brett mentions that 53% of the top 200 law firms in the U.S. are already using AI tools, with many more exploring their potential. While some older lawyers resist the change, AI is increasingly seen as an essential tool for improving efficiency and reducing costs in legal practices.

How does AI help in M&A, specifically in due diligence?

In M&A, AI is used to perform due diligence by analyzing documents and spotting issues efficiently. AI can also help with benchmarking by comparing a business to competitors, creating more accurate financial forecasts, and improving the overall efficiency of the due diligence process. This helps investment bankers and lawyers focus on more complex tasks, such as strategy and negotiation.

What are some limitations of AI in legal practice today?

AI is still limited in several ways. It cannot perform complex, high-level legal tasks like negotiations, strategic decision-making, and interpreting nuanced legal situations. While it can handle routine tasks and help with document generation, it is not capable of replacing the deep knowledge and experience required in areas like M&A, litigation, and specialized legal advice.

What does Brett Senis predict about the future of AI in legal work?

Brett Senis predicts that AI will continue to improve and will likely replace more lower-level legal work in the future. However, he believes that AI will not replace lawyers in high-value, strategic, and nuanced legal tasks for the foreseeable future. He also notes that the legal profession will adapt to this shift, and lawyers will need to focus more on delivering high-level strategic advice and adding unique value.