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By Geoffrey D. Ivnik, Esq. | Director of Large Markets, LexisNexis
The LexisNexis 2024 Investing in Legal Innovation Survey: The Rise of Gen AI at Top Firms & Corporations revealed an intriguing gap in expectations regarding the use of generative artificial intelligence (Gen AI) in law firms between corporate clients and law firm leaders.
A large majority (80%) of Fortune 1000 executives expect to see a reduction in billing from outside counsel due to efficiencies created by Gen AI, while few law firms (11%) are changing or planning to change their billing practices and even fewer (9%) indicated their corporate clients are expecting their bills to be reduced as a result of Gen AI.
It’s likely that gap will close this year as communication between in-house counsel and law firms increases and expectations begin to match reality, but what is clear is that corporate clients are expecting their outside counsel to become more efficient in their operations by leveraging the power of Gen AI.
So where is a good place for law firms to start in finding these new efficiencies?
“You have to look at the processes that you do now and find some way of implementing Gen AI into those processes,” said Greg Lambert, chief knowledge services officer at Jackson Walker, in comments during a recent Wall Street Journal event for law firm managing partners. “I’m a big believer that it’s a mistake for law firms to tackle billable hour processes first. I think it’s safer and you’ll get better buy-in to test things by focusing on your administrative tasks and figuring out ways of streamlining those processes.”
Lambert cited examples such as marketing, knowledge management and IT as back-office functions that could really benefit from the implementation of Gen AI.
“Then if you can get some successes in those areas, you can start processing it into more things that hit the billable hour,” he said.
Anita Barksdale, advisory managing director in the KPMG Cyber Security practice, agreed that the immediate opportunities for law firms to identify efficiency gains through the use of Gen AI may well be those found in administrative areas.
“There are definitely some low-level processes that a lot of attorneys are using their time for that could be automated,” she said.
Barksdale gave an example of the client intake process at large law firms, which is often very time-intensive and involves routine question-and-answer documentation. She suggested there may be ways to make that process easier and faster by leveraging Gen AI tools to assist with asking questions and collecting answers, creating documents and summarizing meetings by creating notes that can be efficiently shared internally so all key stakeholders know how things have progressed.
“There are a lot of practical applications for things that take lawyers a lot of time but could possibly be done with technology, as opposed to high-paid associates,” Barksdale said.
The rise of Legal AI — Gen AI tools trained for the legal profession — offers law firms an historic opportunity to transform their internal workflows by automating a wide range of administrative processes. This can produce significant efficiency gains, enabling law firms to reduce costs and focus on the high-level work of representing their clients.
This article was based on one of the panel discussions at the Wall Street Journal event, “What Every Managing Partner & C-Suite Leader Needs to Know About Legal AI,” which took place on January 31st in New York City. Watch the entire session, Legal Leaders and Early Adopters, for more insights from industry leaders.
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