‘AI To Create More Legal Jobs Than Losses’ – Landmark PwC Report

AI will create more jobs than it displaces by boosting economic growth, and in particular more legal jobs will be created than lost in the long run, says a major report by Big Four firm, PwC.

The study was focused on the UK, which is a useful standard model to compare to other large, highly developed economies. The key finding was that over the next 20 years AI and automation will radically impact the economy ‘displacing’ 7 million roles nationally, but also creating 7.2 million new roles, i.e. a net boost to employment.

The main area of losses will be manufacturing, which will see a quarter of jobs disappear in the next 20 years. But, for lawyers it’s an interesting picture (see table below for full details of different employment types).

Artificial Lawyer spoke to PwC about the results and they stated that lawyers would be classed in the ‘Professional, scientific and technical’ segment of the economy. Though an amalgamated group, PwC therefore suggests that some legal roles will see a 33% increase, while other types of role decline by 18%, giving a net increase of 16% (when figures are rounded).

The AI data, which is contained in the new edition of PwC’s regular UK Economic Outlook, does not get into granular reasons for why or how AI will change the legal jobs outlook. But here are some thoughts from Artificial Lawyer:

  • Improved access to justice via automated systems that lower price barriers could help tap the huge unmet demand for legal services. E.g. around 70% of SMEs with a legal issue never approach a lawyer for help due to fears over costs and unpredictability. This could increase legal roles.
  • As larger commercial law firms automate process tasks they will increase the total ‘through-put’ of the firm’s ‘engine’, allowing more work to be taken on, which will demand more lawyers.
  • Lower level process work will diminish and paralegal-level roles will become bifurcated and also see significant reduction. There will still need to be ‘admin’ type roles, but the space between admin and giving legal advice will shrink, hence job losses.
  • Potential for the UK (or other nations that excel in legal AI and automation) to become a larger global centre for legal work, sucking in more work from around the planet, and thereby boosting the legal sector in the UK.
  • The growth in hybrid roles will also make some small impact, with more lawyers with tech and project management skills, and techies and project managers who work alongside lawyers, growing in number over the next 20 years.

Overall, Artificial Lawyer’s view is that the industrialisation of the legal market ironically will increase the value and demand for empathetic, very human lawyers, who can give advice, exercise judgment and manage a case for an equally very human client. AI and process automation simply allows lawyers to get back to being real lawyers and to do a better job of being lawyers.  

Commenting on the wider results, John Hawksworth, chief economist at PwC, said: ‘Major new technologies, from steam engines to computers, displace some existing jobs but also generate large productivity gains. This reduces prices and increases real income and spending levels, which in turn creates demand for additional workers. Our analysis suggests the same will be true of AI, robots and related technologies, but the distribution of jobs across sectors will shift considerably in the process.’

 Estimated job displacement and creation from AI by industry sector (2017-37)

Industry sector

% of existing jobs (in 2017)

Number of jobs (000s)

Creation

Displacement

Net effect

Creation

Displacement

Net effect

Health and social work

34%

-12%

22%

1,481

-526

955

Professional, scientific and technical

33%

-18%

16%

1,025

-541

484

Information and communication

27%

-18%

8%

388

-267

121

Education

12%

-5%

6%

345

-158

187

Accommodation and food services

22%

-16%

6%

518

-371

147

Administrative and support services

23%

-24%

-1%

698

-733

-35

Other sectors

13%

-15%

-2%

466

-533

-67

Wholesale and retail trade

26%

-28%

-3%

1,276

-1,403

-127

Construction

12%

-15%

-3%

279

-355

-75

Financial and insurance activities

18%

-25%

-7%

209

-286

-77

Public administration and defence

4%

-23%

-18%

64

-339

-274

Transportation and storage

17%

-38%

-22%

296

-683

-387

Manufacturing

5%

-30%

-25%

133

-814

-681

Total

20%

-20%

0%

7,176

-7,008

169

Source: PwC analysis

Also, PwC noted that London would benefit from AI. ‘Based on differences in industry structure alone, the net effect of AI on jobs may not vary that much across the UK. London has the most positive estimated impact (+2%), which benefits from being home to 28% of the UK’s professional, scientific and technical activities, as well as 31% of the UK’s information and communication sector,’ the report said.

Euan Cameron, UK AI leader at PwC,concluded: ‘There will be winners and losers. It’s likely that the fourth industrial revolution will favour those with strong digital skills, as well as capabilities like creativity and teamwork which machines find it harder to replicate.’

‘Historically, rapid technology change has often been associated with increases in wealth and income inequality, so it’s vital that government and business works together to make sure everyone benefits from the positive benefits that AI can bring. These include increased productivity and consumer choice, as well as improved outcomes in those areas that matter most to people such as education to healthcare,’ he added.

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