The legal profession urgently needs to prioritise artificial intelligence, according to a new report by the International Bar Association’s Future of Legal Services Commission (FLSC).

The Future of Legal Services - White Paper 2024, produced by FLSC and Lamp House Strategy, stated that there is “still a large disconnect between the impact of AI and the preparedness of the legal sector”, noting that while the organisational attention that AI receives is growing, “it still lags far behind other challenges which are often felt to be less impactful, yet receive much greater attention”.

The report added: “This year’s results have shown that the impact of AI is still seen as more of a medium-term challenge, with limited short-term impact anticipated,” making AI “next year’s problem”.

With AI-based challenges for law firm managers set to increase rapidly in the short and medium term, the report acknowledged that change management and training was a top impact area across the IBA’s regions, especially in the medium term.

The latest edition of the FLSC report also identified 17 key areas under four primary themes: people, clients, business and the rule of law. These areas include the drive for equality, diversity and inclusion, the emergence of new unregulated entrants in the legal market and challenges to the independence of the legal profession, as well as AI.

Another perceived longer-range issue is environmental, social and governance (ESG). However, compared to 2023, lawyers felt more equipped to deal with any required actions in 2024 regarding the need for diversity, equality and inclusion in the profession and the impact of climate change on business models.

Notably, the report highlighted a decrease in the perceived impact of challenges related to the rule of law. It noted: “Lawyers recognise many of the threats to the rule of law, but it is hard not to conclude from the data that most of us think they are someone else’s problem to solve.”

However, the effect of political uncertainty on legal and regulatory environments was recognised as more prominent, and “arguably has more commercial imperative in terms of its potential impact”.

Soledad Atienza, co-chair of the FLSC and Dean of IE Law School in Madrid, Spain, said: “Predicting future issues is a key challenge for law professionals servicing clients and offering advice. The work of the FLSC is intended to be useful to law firms, judiciaries and academic institutions worldwide.”

Christopher Howard of BARBRI, the co-vice chair of the FLSC, added: “The survey provides a litmus test of the profession’s key issues worldwide.”

The survey was based on respondents from 255 IBA members, with around three-quarters of respondents from law firms, most of whom were partners. The response rate was double the volume received for the 2023 report.

The report adds to the work done by the IBA on AI, with a significant report launched at that organisation’s annual conference in Mexico City, supporting regulation over the use of AI. At the same time, the IBA endorsed the first international treaty on AI governance in October 2024.

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