Why and how law firms should embrace AI: Stephanie Lomax

After leaving HSF, where she trained and practised in the Global Energy Practice, and half a decade as a government lawyer, Stephanie joined Thomson Reuters in 2018. Now based in Switzerland, she has switched from legal practice to corporate strategy for the company’s large and growing legal research and software business. Much of her focus since the end of 2022 has been on generative AI, which Thomson Reuters predicts will be transformative for the legal services market within a decade. 

“I always like to change things up a bit,” says Stephanie, who can look back on quite a few changes over a 15-year career to date. After studying Chinese at Cambridge University, she joined Herbert Smith Freehills, qualifying into the Energy group where she worked both as a fee-earner and then as a professional support lawyer. She then had a spell as a government civil servant (for Ofgem, the government regulator for the electricity and natural gas markets). During a sabbatical, she moved to Italy, where she learnt Italian and sung in the chorus of a professional opera company.  Rather than return to the UK at the end of her sabbatical, she jumped at the chance to work remotely from northern Italy, taking on an editorial role at Practical Law, one of  Thomson Reuters’s flagship products. Over three years, she helped launch two new global service lines.  She then decided to turn her hand to corporate strategy, which resulted in a move to the company’s headquarters in Switzerland at the end of 2021.

“To use a metaphor, my career is a bit like an accordion, squeezing in and out with periods of high intensity and then others of relative calm,” Stephanie continues. “I am a big believer in having different career pathways, operating at different speeds at different times. If you only have one life, it is nice to have a lot of different lives going on. At each stage, I have managed to bring out a different side of myself.”

AI, a game changer for legal professionals

As well as helping Thomson Reuters with its own corporate strategy, and looking at M&A opportunities, as a leading legal technology provider, Stephanie and her team are immersed in the potential of AI for the legal sector. AI has been used for quite some time, particularly in assisting with data retrieval and search capability, but the “game changer” for Stephanie is the potential of generative AI, or Gen AI as it is now usually referred to.

“Gen AI is a game changer because it excels in skills that are highly complementary to legal work. Lawyers are based in words and large language models are about writing and interpreting words. However, it is important to stress that ChatGPT is not a tool that is suitable for legal work.” 

Stephanie goes on to explain that ChatGPT is not trained on legal data and produces erroneous responses when it comes to legal research. In the AI jargon, ChatGPT will “hallucinate” when it doesn’t know the answer. Thomson Reuters is investing massively in AI to get it right. It plans to spend more than US$100m on developing its own AI technology every year over the next few years. It also prides itself on being a trusted provider of authoritative legal content. “We still always say that lawyers have to double check the output of Gen AI, but, at least with our products, the AI output is grounded in trusted sources like Westlaw and appropriately guard-railed, ” she says.

Thomson Reuters already has several AI products on the market, including CoCounsel, a “multiskilled generative AI legal assistant’, and a lot in the pipeline for 2024. It is partnering with Microsoft Copilot to develop an intelligent drafting experience.

What is clear is that Gen AI will have profound impacts across the legal profession, not just the large law firms such as Herbert Smith Freehills which are already well down the path of incorporating AI into their operations and products. AI can be put to use by all sizes of law firms, to the very smallest, and even individuals who can use Gen AI as a form of DIY legal support.

As Stephanie peers into the future, she predicts three phases of Gen AI transformation. In the first wave over the next one to three years, law firms and legal departments will incorporate AI into legal and operational workflows. 

In the second phase, predicted to occur over the next three to five years, she believes we will start to see a deeper re-engineering of law firms and some market-level disruption. General Counsels will insource more work and innovative law firms will capture more value by productising “plain vanilla” work.  Increasingly, corporate legal departments will look to the new law departments of large law firms (such as Herbert Smith Freehills’ ALT) for their legal solutions. 

According to research conducted by the Thomson Reuters Institute, 70% of legal professionals believe AI and Gen AI will have a transformational or high impact on the legal profession within the next five years.  “There is a great deal of excitement, but also a lot of uncertainty,” Stephanie says. “But what we have found overall in our research is that most people find the new technology easy to engage with, and that bodes well for how AI will be effectively used in the profession.” 

In the third phase, over five to 10 years, there will be more profound shifts in legal service delivery and pricing. With Gen AI technology capable of tackling even more complex tasks, AI will be a primary driver of day-to-day legal tasks, with legal practitioners freed up to focus on more valuable work as supervisors and strategists. The result is a complete overhaul of operating models and potentially the growth of new tech-centred legal professions. There will be a much greater focus on how humans can interact with machines effectively.