The Hype Curve of AI: A Sober Outlook and the Benefits for Lawyers

Jul 04, 2023

Introduction

Artificial Intelligence (AI) has captured the imagination of investors, sparking discussions about the “fourth industrial revolution.” Author Will Daniel explored this discussion in an article for Fortune. However, it is important to maintain a balanced perspective on AI’s true potential and limitations. While the current market may be influenced by FOMO (fear of missing out), it is crucial to explore the benefits that AI brings to various sectors, including the legal profession. Lawyers can likely ride the AI wave, enhancing their practice while letting the broader implications wash forward into an uncertain future.

The AI Hype Curve: Balancing Enthusiasm with Caution

The article from Fortune contains a lot of good input from professionals. According to Robert Marks, an Electrical and Computer Engineering Professor at Baylor University, we find ourselves amidst a hype curve—a bubble that requires a more sober approach. He emphasizes the need for people to slow down and critically assess the technology’s capabilities and limitations. Similarly, David Trainer, Founder of New Constructs, compares the current AI frenzy to previous investment bubbles, urging investors to exercise caution and consider valuations and earnings.

The best example of a previous and similar investment bubble was the 2001 internet dot-com bubble. The 2001 internet-tech bubble, also known as the dotcom bubble, was characterized by excessive speculation and investments in internet-based companies, many of which had little or no profitability or sustainable business models. Sound familiar? The excessive speculation led to a rapid increase in stock prices, creating a speculative frenzy driven by FOMO.

Similarly, the current AI hype bubble has seen significant investments and market enthusiasm, with many companies touting AI as a game-changing technology. Some parallels can be drawn between the two bubbles in terms of inflated valuations and lofty expectations. In both cases, there is a risk of investors getting caught up in the hype without considering the long-term viability and profitability of the underlying technologies and companies.

While there are similarities, AI as a technology has broader implications and potential applications across various sectors compared to the internet-tech bubble, which was primarily focused on internet-based businesses. AI has the potential to revolutionize industries and drive significant productivity gains, but it also requires a realistic assessment of its current capabilities and limitations.

Taking lessons from the dotcom bubble we can approach the AI hype with caution, carefully evaluating the underlying technology, business models, and valuations. While AI undoubtedly has transformative potential, it is essential to differentiate between realistic and inflated expectations, ensuring a balanced perspective on its long-term prospects.

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Concentrating on Benefits for Lawyers

Navigating AI’s Impact While acknowledging the concerns surrounding AI, Marks believes that AI will be incorporated into society, making our lives easier despite its disruptive nature. The legal profession stands to benefit from AI technologies, as they can streamline processes, enhance research capabilities, and provide valuable insights for legal practitioners. AI tools can assist with contract analysis, legal research, due diligence, and predicting case outcomes, ultimately improving efficiency and the quality of legal services provided.

In other words, as the legal profession rides the AI-wave a number of exciting tools are being developed and seem focused on enhancing productivity and efficiency. It is hard, however, to see the benefits of AI technology while also reading about the replacement of white collar workers in a number of professions. A recent study from IBM forecasts that 40% of the global workforce will need to adapt to AI’s implementation. So, in the realm of law, where precision, thoroughness, and foresight are paramount, AI’s ascendancy brings forth both challenges and opportunities. Those who are ready to re-tool for the fourth industrial revolution are in the best position to survive the AI hype bubble.

Long-Term Potential of AI

Game-Changing Technology A McKinsey report highlights the potential of AI, estimating that it could add trillions of dollars in value to the global economy annually across various sectors. Additions to the economy should mean additions to work for lawyers. This growth signifies the transformative power of AI and its ability to drive productivity gains, cost savings, and innovative solutions.

While benefiting from the increased work created by AI, lawyers also get to benefit from AI enhancements to their own profession. From automating labor-intensive tasks like document review to conducting comprehensive legal research in a fraction of the time, AI empowers legal professionals to redirect their focus toward intricate legal analysis, advocacy, and client relationships. Which emphasizes an important point, though the game may be changing, face-to-face interactions appear, as yet, to be irreplaceable.

There is just no replacement for a real-life attorney, and AI has not found a way around us yet. The result is that the long-term impact of improved individual lawyer productivity is hard to anticipate. Will the legal professional support staff survive in a world where a lawyer can accomplish a number of additional tasks with AI instead of a paralegal? Or will clients use AI instead of lawyers to get answers to their legal questions?

We choose to believe that the legal landscape is poised to undergo a renaissance, where AI-powered efficiency augments the very core of legal practice, enabling lawyers to offer more accurate, timely, and value-driven counsel to their clients thereby enhancing the lawyer-client experience and keeping the legal profession as robust as ever. As AI becomes an integral tool in the lawyer’s arsenal, the long-term impact on the broader profession has yet to be seen.”

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Squaring the Hype with AI’s Long-Term Potential: A Balanced Perspective

Amidst debates about the extent of AI’s recent hype, a closer look reveals substantial technological progress underpinning AI’s rise. David Trainer, representing New Constructs, acknowledges AI’s tangible potential, foreseeing its seamless integration into our daily routines. Yet, he tempers optimism with a reminder about prudent valuation assessment, drawing poignant comparisons to the dotcom bubble and the consequential market collapse.

Turning the focus to the legal realm, the unfolding AI narrative bears distinctive implications for legal practitioners. While initial concerns might arise, the integration of AI into the legal domain appears to follow a trajectory distinct from the speculative peaks of certain industries. Rather than supplanting attorneys, AI emerges as an invaluable ally, assisting in document review, legal research, due diligence, and predictive analytics. This collaborative partnership augments the efficiency and quality of legal services while liberating lawyers to channel their expertise into complex strategic analysis and creative legal thinking.

Furthermore, the legal sector’s proactive engagement with AI showcases its adaptability to technological evolution. An industry where precision, foresight, and nuanced insights are paramount, law stands to gain from AI’s analytical capabilities. By harnessing AI, lawyers can capitalize on enhanced research capacities, expedited data processing, and refined prediction models, ultimately yielding superior legal strategies and client service.

Navigating AI’s transformative potential, legal professionals embrace a balanced perspective, recognizing both the revolutionary possibilities and the imperative to remain grounded in realistic valuation. In this fusion of optimism and prudence, the legal landscape stands positioned to harness AI’s benefits while deftly managing its integration and impact

As the AI hype curve continues, it is essential for lawyers and legal professionals to take a careful and balanced approach. While acknowledging the uncertainties and challenges, the legal industry can harness the power of AI to improve efficiency, enhance research capabilities, automate routine tasks, and gain valuable insights. We can do this even as “fourth industrial revolution” washes over countless industries. Even if the bubble is about to burst, by embracing AI technologies responsibly, lawyers can better serve their clients and navigate the evolving landscape of the legal profession.

FAQs

Q: What is the current state of AI development?

A: AI has gained significant attention and investment in recent years, leading to advancements in various domains. Companies like OpenAI and Google have developed AI models that can perform complex tasks like language generation and image recognition.

Q: Is the current excitement about AI justified?

A: The excitement around AI is based on its potential to transform industries and improve efficiency. However, it’s essential to approach AI with a balanced perspective, considering both its benefits and limitations.

Q: How does AI impact the legal profession?

A: AI can revolutionize the legal sector by automating tasks like document review and legal research, allowing lawyers to focus on higher-level analysis and strategy. This can lead to increased efficiency and improved client services.

Q: Will AI replace human lawyers?

A: While AI can automate certain tasks, it’s unlikely to completely replace human lawyers. AI tools are designed to assist legal professionals and enhance their capabilities, rather than replacing their expertise and judgment.

Q: How can lawyers adapt to the AI era?

A: Lawyers can adapt to the AI era by embracing AI tools and technologies to streamline processes, improve research capabilities, and provide more value to clients. Continuous learning and upskilling will be essential to leverage AI effectively.

Q: What can we learn from past investment bubbles like the dotcom era?

A: Past bubbles, such as the dotcom era, remind us of the importance of prudent valuation and realistic expectations. While AI has transformative potential, it’s crucial to differentiate between genuine advancements and inflated hype.

Q: How can the legal profession benefit from AI’s long-term potential?

A: AI’s long-term potential can empower lawyers to focus on complex legal analysis, advocacy, and client relationships. It can also lead to enhanced research capabilities and better prediction models, ultimately delivering superior legal strategies and services.

Q: Is there a risk of job displacement due to AI implementation?

A: While AI may automate certain tasks, it can also create new opportunities for work, especially in fields that require human judgment and creativity. As AI augments legal processes, lawyers can expect an evolving role rather than complete displacement.

Q: What role does a balanced perspective play in AI adoption?

A: A balanced perspective is essential in AI adoption to avoid overinflated expectations and unwarranted fears. By understanding AI’s capabilities and limitations, professionals can make informed decisions and harness its benefits effectively.

Original Article: Daniel, W. (2023, July 2). A.I. hype could signal the start of the ‘fourth industrial revolution’—or it could be investor ‘FOMO’ warping the market with trillions at stake. Fortune. Retrieved from https://fortune.com/2023/07/02/ai-hype-curve-fourth-industrial-or-fomo-expert-predictions