Given we only started to see the widespread use of generative AI in the legal industry mid to late 2023 we are only just starting to feel the impact of the legal costs trickling through even now, so it’s not a well-trodden path.
How costs should be recorded/presented is case specific and depends on the nature of AI and what it is doing. But more importantly, what legal agreement is in place for that service and what intention there is to seek those costs on an solicitor/client or inter partes basis.
For example, if GenAI is being used for legal research, drafting and document review we are not of the view that there should be a need to specifically state so when recording your time. The use of legal knowledge services such as Practical Law and Lexis Nexis etc. have been present and used in the legal industry for quite some time. The use of such services are commonly paid as on overhead of the firm and is simply a tool to assist fee earning time. Overheads of course not being passed on as charges to clients or being sought from opposing parties, as the hourly rates claimed account for the cost of the service alongside other things such as printers etc. If a fee earner were to use Practical Law’s “fast draft” feature to draft a document, in practice we do not see that time recordings specifically say so. As a matter of transparency you could opt to do so if you wished.
Where GenAI is being used to totally replace a fee earner task/role that is a slightly different situation. If there was an intention to seek to recover the costs of the service (from either client or opposition) then it will fall to the usual considerations, is there a liability to recover such expenses and is it recoverable in principle.
An area where have seen AI assisting for some time is Document Review and e-Discovery Platforms, the use of which has revolutionised disclosure exercises. Where such services are used in litigation, fee earners will simply record the tasks they are undertaking and time taken. As to the cost of Discovery Platforms this may be sought as a profit cost or disbursement depending on the agreement in place. In some situations, particularly with clients with their own in-house services, firms will opt to simply treat the cost as an overhead. The descriptions here (and documents in support of the time/disbursements) will be clear and transparent to the service used. Should the resultant costs be subject to an assessment, the Court will simply have regard to the usual considerations for time and disbursements generally.
Currently, the SRA does not have specific guidance on generative AI related to use or disclosure of use for client care, however, there are limited articles/practice note available from the Law Society on the topic.
Whilst the above reflects the current position we suspect we will see more guidance soon as the industry gets more familiar using AI.