Slaughter and May and Allen & Overy (A&O) have joined a government-backed project led by the University of Oxford to research the use of artificial intelligence in UK legal services.

The project, titled 'Unlocking the potential of AI for English law', is due to run for two years and will draw £1.2m from the government's Industrial Strategy Challenge Fund.

Oxford University law professor John Armour, who will lead the research, told Legal Week: "Adopting a disruptive new technology like AI requires changes in skills, training and working practices, without which the productivity gains will be muted. This challenge is coming at the same time for everyone in the sector – it affects not only students intending to work as lawyers in the future, but also qualified lawyers already in the profession."

Armour said the research will aim to identify best practices in the use of AI, its application in dispute resolution and other cases, and examine how the UK can learn from other jurisdictions in terms of policy and teaching in the use of AI.

Barristers Robin Dicker QC and Ryan Perkins of South Square Chambers, as well as the Law Society, Thomson Reuters, lawtech startup LexSnap and legal education charity the Legal Education Foundation, will also contribute to the project.

The project will also create education and training packages, aimed at both universities and private-sector firms.

Slaughter and May learning and development manager Julia Robinson told Legal Week that the project is a "great opportunity for us to share expertise and experience on the governance and training implications of AI for the UK legal market".

She added: "We all recognise the need for lawyers to develop their digital skillset as we continue to innovate in the way we provide legal services."

Shruti Ajitsaria, who runs A&O's tech incubator Fuse, said: "As AI continues to develop and is starting to change the way we work as lawyers, it is clear that the way in which we train our lawyers also needs to be re-examined."

The project forms part of a wider research initiative commissioned by UK business secretary Greg Clark, who this week pledged £3m to investigate how the legal and insurance professions can make better use of AI.

Emily Foges, CEO of Slaughters-backed legaltech AI company Luminance, added that the UK has been "watching from the sidelines" on AI so far, and that the government's latest backing "will serve as a valuable endorsement to AI, ensuring that the UK does not fall behind".