AI and the law

I argue that generative AI will have an uneven effect on the evolution of the law. To do so, I consider generative AI as a labor-augmenting technology that reduces the cost of both writing more complete contracts and litigating in court. The contracting effect reduces the demand for court services by making contracts more complete. The litigation effect, by contrast, increases the demand for court services by a) making contracts less complete and b) reducing litigants' incentive to settle, all else equal. Where contracts are common, as in property and contract law, the change in the quantity of litigation is uncertain due to offsetting contracting and litigation effects. However, in areas where contracts are rare, as in tort law, the amount of litigation is likely to rise. Following Rubin (1977) and Priest (1977) generative AI will accelerate the evolution of tort law toward efficiency.