The possible impact of AI on the commercial property legal sector
In the UK, the commercial property legal sector provides the legal framework that oversees the leasing, management, buying, and selling of real estate that is used for business activities, such as office buildings or industrial estates. Artificial intelligence (AI) has had a large impact on all aspects of law, however it is especially relevant in the commercial property legal sector as it can detect patterns in data that could be used to make more informed decisions, identify the risks in commercial transactions, and predict the outcome of certain decisions. This would be particularly useful in commercial property law as understanding the likelihood of success in different scenarios could help lawyers plan their next steps and choose the outcome best suited to the client.
Since the introduction of AI to the legal sector, there have been many improvements to the efficiency of law firms as the integration of AI models into the workplace have allowed for more simple legal tasks to be completed quickly and somewhat accurately. For example, a UK law firm, funded and helped to develop an AI tool which improved the efficiency of contract reviews and drafting reports. AI is also capable of conducting basic legal research and providing client-engagement through chatbots; however, this does not compare to the personalised help and empathy that a lawyer would provide.
AI could also help to make the process of land registry registration and property searches quicker. Land registry registration is the process of officially recording land ownership in a public register and property search is the act of searching the land registry to obtain information about a specific property, such as ownership detail and property boundaries. AI would improve the efficiency of these processes as it takes a lot less time than a human to analyse the multitude of documents, conduct property searches, and identify any restrictions, outstanding charges, or discrepancies about the properties. The AI model could also give a risk assessment and compliance checks on the properties to monitor transactions for suspicious activity, which would allow for more secure property ownership and quicker ways to digitally verify people. This would also give lawyers more free time to conduct in-person meetings with clients so that they feel more supported and are given proper legal guidance.
However, while the use of AI does improve the efficiency of commercial property deals, the accuracy of those contracts and reports still need to be checked by humans as AI tools have many common problems. For example, it is common for misleading or inaccurate information to be generated by the AI model, which can result in inaccurate legal contracts that are easily disputable or unjust legal outcomes due to incorrect information within the legal documents.
There are also many ethical considerations to be noted when using AI for legal matters, such as ensuring the data given to the AI model stays within data protection regulations, and ensuring the AI has no algorithmic bias (when an AI model is trained to amplify social prejudices, which can lead to discrimination).
Therefore, there is still a long way to go before AI can be used regularly within the commercial property legal sector due to the many ways in which it could go wrong, which could result in invalidated leases or legal disputes. Consequently, the use of AI-assisted legal judgements surrounding commercial property law are likely to arise in the near future, however there will always be a need for lawyers to check the credibility of the information from the AI model and to manage the clients’ personal aspirations.