Since the release of ChatGPT in 2022, the way many (if not most) professionals work has been transformed. But what does this mean for the commercial property legal landscape? So, how does AI change the legal landscape and how will it continue to evolve?
This is a conversation that constantly needs revisiting due to AI’s rapid advancement. Below I list some key ways AI is used in commercial property transactions today, and how AI will continue to evolve the sector.
Using AI in a commercial property transaction
The most significant contribution of AI is speed and accuracy. AI can review documents, flag risks, suggest improvements, and summarise information faster than any human. Tasks that once took hours can now be completed in just minutes and without the risk of human error.
This efficiency can accelerate entire transactions. However, it is important to note that AI’s ability to interpret and apply judgement is still in the early stages of development. For example, when asked to suggest improvements to a contract, AI is making decisions based on patterns in its training data, not on nuanced commercial context. Without clear instructions, its recommendations may miss the mark.
Specific Example – Lease drafting and negotiation: efficiency vs bespoke advice
Let’s consider the example of lease negotiation, which is a prime example of how AI can be used to its full potential. Natural Language Processing (NLP) tools can flag inconsistencies and contradictions in lease terms. With sufficient context and in-depth prompting, AI can even tailor suggestions to align with a client’s commercial objectives.
But here’s one of the current limitations: AI is trained on existing data. Say your client is a tech company who would like to enter into a complex lease involving an office component, an EV charging station and an AI data centre, with lots of niche requirements. While these types of leases are definitely becoming more common, they’re arguably not by any means standard. The likelihood of AI being able to fully capture all those elements and bespoke concerns is low. When data is scarce, AI’s problem solving abilities diminish.
The bottom line is: AI can enhance efficiency, but bespoke advice remains irreplaceable.
Risks and ethical considerations
Obviously inputting sensitive client data into public AI platforms poses significant risks. As we know, confidentiality is paramount. Firms must invest in secure, enterprise-grade AI solutions and maintain robust cybersecurity measures.
Regulatory compliance also matters. GDPR and professional conduct rules apply to AI use. Lawyers must ensure transparency and accountability when relying on AI-generated outputs.
How will the legal landscape continue to develop in the future?
AI adoption in the legal sector will only grow. Lawyers who learn to leverage AI will gain a competitive edge. Our roles may shift from producing outputs to interpreting and validating AI outputs.
There is no doubt that this evolution will impact business models. Time-recording based fees may give way to a different model of pricing as efficiency increases. But one thing remains constant: clients seek trusted advice from legal experts who understand their commercial concerns. AI can assist, but it cannot replace the human judgment and relationships that are at the forefront of the commercial property legal practice.
How Moore Barlow can help
However complex your professional needs, our commercial and technology solicitors can help you improve your efficiency with expertise in every aspect of commercial law. We take time to understand your business and apply specific legal advice to your corporate ambitions.
