From LLB to LLMs: How AI is powering and upending the legal profession

The legal industry, globally, is on the cusp of an AI revolution. A traditionally paper-, process-, and protocol-heavy sector, it is now seeing generative artificial intelligence (Gen AI) seeping into its daily workflows, saving tonnes of man-hours, sharpening legal documentation, and improving decision making. Investors who have pumped in billions of dollars in legal tech startups over the last two years believe that AI can potentially transform how law firms are structured and impact actual legal output beyond just expediting back office operations. 

In 2024, roughly 79% of all funding in legal tech startups, amounting to ~$2.2 billion, went into companies that had one or more AI offerings, according to Crunchbase. While the US is the world’s leading legal tech market with over 2,500 startups, India ranks second with 650-plus companies in this sector. India’s overall legal services market, however, is only a fraction ($1.3 billion) of that in the US ($437 billion), with legal tech estimated to be an even smaller pie valued at $450-500 million. This makes it challenging for startups to scale and find a sizable total addressable market (TAM). 

But things are changing with the advent of large language models (LLMs) and rapid advancements in Gen AI. “Across all legacy law firms, small and big legal enterprises, more than 80-85% of practising lawyers have started using an AI tool to draft and review their documents. They may or may not accept it openly, but the usage has already started at every level,” LegalKart founder and CEO Arvind Singhatiya tells The CapTable. 

Legacy law firms are turning out to be among the first movers in AI adoption. “It’s like the way we adopted online payments and WhatsApp communication. Similarly, ChatGPT and AI have made their way deep into the offices of law firms,” Singhatiya says, adding that AI is creating a level playing field for all, irrespective of the lawyer’s knowledge of the topic, legal exposure, and years of experience. 

Rising adoption of AI across India’s top law firms is also being attributed to the drop in the cost of AI tools as they become more widespread. “One AI subscription today is equivalent to the salary of two or three associates. And maybe less than that. Therefore, the industry has been quick to adopt these tools, especially for drafting, reviewing, and documentation purposes,” he says. 

A Goldman Sachs report estimates that AI-enabled software can automate almost 45% of legal work; other industry estimates go further in saying as high as 70-80% of a lawyer’s daily workload can be shared by well-trained AI systems, while the person focuses on the emotional intelligence-based tasks.