• 69% of legal professionals expect their use of generative AI to grow over the next two years.

• Document review is projected to become the leading application of generative AI in the legal field.

• Concerns about hallucinations remain low, despite the potential risks.

Generative AI is becoming an integral tool for legal professionals worldwide, according to the Generative AI in Legal 2024 study by research analyst firm International Data Corporation (IDC), commissioned by Relativity. 

According to a Law.com report, the study surveyed attorneys, paralegals, legal IT staff, and operations professionals in several countries, including the U.S., U.K., and Canada.

• The findings reveal that half of legal professionals increased their use of AI in the past two years, with only 3% reporting a decline. 

• Of those using AI, 48% reported incorporating generative AI into their daily workflows, particularly for legal research and contract analysis.

Document Review Leads the Future

Document review is poised to become the dominant use of generative AI in the legal industry.

• While 64% of respondents said they plan to adopt generative AI for document review within the next year, that figure jumps to 93% within five years.

• Document review also earned the highest trust ratings, with 89% of respondents reporting comfort with using generative AI for this task. 

Legal Roles and Firms Drive Adoption

• Paralegals and legal operations professionals are currently leading generative AI adoption, with over half reporting active use. 

• Lawyers follow closely at 47%, and legal IT professionals trail at 41%.

Law firms are the most frequent users of generative AI, with 51% reporting active use, compared to 41% of corporate legal departments and 39% of government entities. 

However, respondents from government and corporate organizations not yet using AI said they plan to adopt it within the year, indicating rapid growth across all sectors.

Automation and Cost Savings Top Priorities

Automation of basic tasks is the leading reason for generative AI use across regions, followed by cost savings. However, regional differences emerge in how legal professionals prioritize AI applications:

• APAC respondents showed high interest in using AI for data privacy compliance.

• European participants expressed greater concern about data bias and the explainability of AI results.

• North American respondents were more focused on mitigating harmful content.

Despite these differences, the overall enthusiasm for generative AI’s potential remains strong.

Concerns About Hallucinations Are Minimal

Publicized cases of AI-generated hallucinations, such as errors in legal research, have not significantly deterred adoption. 

The study found that hallucinations are among the least concerning risks for respondents.

Celia Perez, general counsel at FreightCar America, noted a possible overconfidence among some lawyers. “There’s almost a reactive instead of proactive approach,” she said during a webinar analyzing the study. While hallucinations can be addressed, she emphasized the need for ongoing vigilance.

The Debate Over the Billable Hour

Generative AI’s role in law firms relying on billable hours sparked differing opinions among experts. 

• Fiona Campbell of Fieldfisher argued that generative AI improves efficiency and frees up time for strategic work. 

• Conversely, IDC’s Ryan O’Leary suggested the billable hour model might reduce incentives for widespread AI adoption compared to task-based billing structures.

Still, both agreed on the transformative impact of generative AI. Perez summed it up: “I think gen AI has the potential to fundamentally transform the provision of legal services as we know it. But I don’t think gen AI is going displace lawyers or legal service professionals. It’s simply going to change the nature of how we’re trained and how we work and hopefully impact businesses and the world for the better.”