Amid the joy over how AI will revolutionize healthcare, promoting, logistics and every little thing else, one industry has flown under the radar: the legal career. In reality, the business of law is a robust contender for achieving the very best return on investment (ROI) from using AI.
Law firms are seen as traditional, not as eager adopters of recent technology, but most have used machine learning (ML) for years. Embedded in popular platforms like Westlaw, ML is usually incorporated into core operations.
Now, generative AI is spreading through law firms faster than class-action claims over a stock fraud. Individual lawyers have learned to make use of ChatGPT-like AI models, and whole law practices have harnessed large language models.
Those within the business of law see remarkable gains from AI in efficiency, accuracy, speed and client ends in their day-to-day processes. Three points help explain those results.
- In legal operations, AI-driven time and price savings are typically very high. The gains usually are not incremental.
- AI is applicable to potentially most work processes at law firms.
- Once law firms implement AI, it grows steadily more powerful as they personalize it. This is largely customization; adapting AI to their preferred work methods takes the return on investment (ROI) higher:
Meet the AI-native law firm
These advantages have led to the emergence of AI-centric (aka AI-native) law firms, a brand new breed that’s significantly more efficient and competitive than its rivals. At AI-native firms, most support staff and attorneys already leverage AI extensively for intake, research, drafting motions, briefs, objections, analyzing judges’ opinions, and more.
A law practice becomes AI-native, partially, by personalizing the behavior of AI solutions to mesh with the firm’s existing processes and strategic guidelines. This makes their AI more capable and invaluable.
Personalization takes various forms, like creating case evaluations that follow a firm’s established standards. AI can consider potential claims and create follow-ups in accordance with an attorney’s criteria. It could be taught to follow an existing process, mimic sequences of events, ask or answer key questions along the identical pattern, and write within the form of previous case work.
Once trained to emulate an attorney’s approach, an AI model makes life easier for support staff. Even when a paralegal hasn’t worked with specific lawyers, AI will help them with case preparation and client interactions, risk assessment, and even strategy.
AI-native law firms increasingly use generative AI to service clients who require individualized treatment. AI contributes throughout the case lifecycle, from brainstorming pre-litigation case strategy, to handling discovery. Gen AI-based models also help prepare depositions, analyze their results, and plot litigation strategies.
Why is AI extraordinarily useful to law firms?
It’s been said that the legal world is made from six-minute increments. Often, AI can often do in seconds what takes hours or days for a junior associate. Time reductions of as much as 99% drive major cost savings, and within the intellect-intensive field of law, they’re common.
Day-after-day, lawyers must evaluate, analyze and weigh tradeoffs, draft documents, and make decisions. Paralegals and junior associates must work fast and accurately, yet never overlook anything vital. With volumes of information and minutiae to wade through, the work can exhaust them, resulting in mistakes.
Overall, speed, scale, and personalization contribute to make AI a large accelerator within the legal field, with productivity gains well beyond the “traditional” 10 to twenty percent.
Costs come down and move around in AI-native law firms
Lawyers are learning first-hand that AI systems can minimize the associate hours it takes to finish a process. By engaging AI across the life cycle of cases, they will reshape individual workloads for greater profitability. Upfront work on cases is typically undercompensated, and AI lets the team concentrate billable hours on later, fully-compensated stages.
AI-centric firms may also grow without expanding the headcount of support staff. As a substitute,existing staff can assist more associates, who bill at higher hourly levels, increasing profitability.
They may also market themselves and drive growth more vigorously. Wherever AI reduces operational costs, it frees up funds for marketing and business development. Generative AI makes marketing communications faster and easier for law firms, because it does for other businesses.
Worker experience: AI happiness
AI often doesn’t get the credit it deserves for its positive impact on worker experience. In practice, lawyers and paralegals can offload most so-called grunt work and repetitive tasks to AI. This boosts job satisfaction and—by implication—retention. Support staff and junior associates change into, in effect, supervisors of AI.
They’ll customize the firm’s AI by teaching procedures to an LLM, after which share them across a team. This implies lawyers can operate in familiar ways but at a bigger scale, and delegate more comfortably to support staff without lengthy explanations of “Here’s my way of doing this.”
Business models shift for AI-native law firms
AI-native law firms can uplevel their business to extend capability and support revenue growth. Specifically, they will structure internally to handle more complex cases and lucrative contingency work. AI enables smaller firms to handle larger, tougher cases by whipping through much of the research and evaluation.
In contingency litigation, productivity gains stemming from AI may even exceed those seen in other legal categories like contracts, mental property, and family law. AI can handle much of the upfront evaluation of contingency cases. Taking over well-researched contingency cases can significantly increase profitability.
Those that get AI versus those that don’t
Given the advantages, are law firms jumping on board and going AI-native in droves? Surprisingly no, in accordance with a 2023 Thomson Reuters survey that found 60% had no plans to make use of generative AI. That’s excellent news for the opposite 40%. Law firms that leverage AI effectively have a marked advantage over competitors that don’t.
The legal career ranks among the many industries achieving the perfect gains from use of AI. Law firms that “get it” will proceed to personalize AI systems and push towards their potential, and grow more profitably. Because it becomes increasingly obvious that AI-native law firms enjoy greater growth and profitability, other intellect-based professions may possibly follow their example.
