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Arizona Attorneys are Facing New Competition

In March, Forbes published an article titled “Which Jobs Will AI Replace?” listing the industries most likely to be heavily impacted by the increased use of generative artificial intelligence, or AI. Ranked in the top three, alongside finance/banking and marketing, was legal services.

The report echoed an earlier study from Goldman Sachs, which estimated that 44% of the work in legal professions could effectively be automated by generative AI over the coming years. None of this comes as a surprise to Derek Bambauer, a professor in the James E. Rogers College of Law at the University of Arizona who now teaches at the University of Florida but still supervises students at UA. 

Together with a team of UA researchers in artificial intelligence, law and computer science, Bambauer is helping to develop “smart contracts” using the same blockchain technology currently used to manage cryptocurrency-based financial transactions. The team’s first goal is to create code that will be able to write and execute wills electronically, cutting out the need for probate lawyers and going to court. Next on the horizon is adapting to code to write and understand patents, eliminating the need for a patent attorneys and paying large fees to the patent office.

“I would say that if you surveyed lawyers as a whole on their feelings about AI, most would fall somewhere between highly concerned and panicked,” said the professor, who’s been a practicing lawyer himself for 19 years.

“But I personally don’t think AI will replace lawyers,” he added. “More likely, lawyers will learn to use it as a tool to reduce the amount of the tedious work that all of us hate doing — like kicking out a first draft of a letter to a client, or churning out like boilerplate briefs. Leaving us more time to do the more interesting work, and hopefully charge the clients less for the routine work.”

Bambauer believes lawyers are less likely to be replaced by computers than they are by other people—specifically, a new crop of “legal paraprofessionals,” or nonlawyers authorized to provide legal advice and represent individuals in court in limited practice areas. The state of Arizona’s new legal paraprofessional (LP) license was created in late 2019, and the University of Arizona is already offering a one-year Master of Legal Studies program to qualify for the certification.

“In many ways, I think this is actually more of a competitive threat than AI, at least in the next 10 years,” Bambauer said. “To be honest, these legal paraprofessionals are going to take some lawyers jobs. And that’s scary to some, because for so many years, lawyers have been a guild, right? Like, we put up  a barrier to entry so that we can keep everybody’s salaries high.

“But if we now have a whole new group of people who want to learn to become these legal paraprofessionals, that’s going to reduce the cost of a lot of legal services, which will really increase the ability of ordinary people to access those legal services so that their lives run better and more smoothly.” 

An uncontested divorce handled by a legal paraprofessional, for example, could cost less than a third of what it would cost with a standard lawyer.

“I call ‘em ‘Lawyer Lite’ – which I don’t mean in a flip way,” added Bambauer. “This is somebody who has less training, they can do fewer things, but they’re actually a lot cheaper.”

Along with AI and LPs, lawyers also have another new acronym to contend with: ABS’s, or “Alternative Business Structures.”

In August 2020, Arizona became the first state in the nation to scrap a rule that barred non-lawyers from owning law firms, allowing lawyers and non-lawyers to co-own businesses that provide legal services through the new structure. That created what some industry observers dubbed a “gold rush” of outside investors flocking to Arizona to set up shop.

Initially, the majority of approved applications were for personal injury law firms – companies representing clients hurt by trucking accidents, defective bladder drugs or water contamination at Camp Lejeune – your standard mass torts cases. But the number of ABSes in Arizona has been growing rapidly. 

There are currently 58 licensed alternative business structures in Arizona, up from 15 in 2022. Because the directory is opt-in, not all are listed, according to the State Bar of Arizona. But many of those have offices or representation in Phoenix and Tucson. 

While some old school law firms worry that such firms may tend to serve the desires of their investors rather than their clients on matters like deciding settlements, and compromise ethics in the name of profit maximization, others stress that the new changes will give lower-income litigants access to representation they didn’t have before in simple civil and criminal cases. 

“The Alternative Business Structure program creates innovative solutions that would otherwise be out of reach and builds bridges between industries such as law and technology, as well as opening doors to social justice programs,” said Megan Foster, legal service innovations officer for the Arizona Supreme Court, Certification and Licensing Division. “The generative possibilities of ABS cannot be underemphasized.”

The new opportunities to work as legal paraprofessionals are also expected to open doors for those long underrepresented in the legal profession, like women and minorities. As of 2020, 86% of all lawyers were non-Hispanic whites, according to the American Bar Association.

Critics say this new door will only relegate the new members of the profession to a less prestigious and lower-compensated “second class” of legal work. But proponents say the new entry point is already welcoming a more diverse group with an eye on long-overlooked social issues. 

“We have also seen an increase in applications for social justice programs that would link lawyers with special interests,” said Foster. “Like immigration, crime victims and criminal record expungement, which would be ‘set aside’ in Arizona.”

“Most of us support having better access,” added Bambauer, speaking as both a lawyer and a law professor. “At some level, we’re all in favor of reducing costs, because we see the social problems that result from not having access to representation in the justice system.”   

Source: Explorer