Law Firm AI Strategies and Efforts - 2023 Overview (2)

DataPlus AI
April 16, 2024
6
min read

As law firms disclose their financial performance for 2023, we are sharing this AI adoption strategy report that complements the firms' financial disclosures, presenting you with a comprehensive view of their strategies.

These insights have been collected from DataPlus’ primary market research.

Overview

In the legal generative AI field, law firms are careful to talk about the AI tools they test, often requiring nondisclosure agreements (NDAs) with AI vendors. This trend is coupled with a growing inclination towards partnerships, especially with nascent AI companies, to influence product development directly. Firms emphasize the need for ongoing involvement, ensuring they remain informed about any significant updates or shifts in the AI models utilized, which underpins their strategic approach to technology adoption and integration.

 The year 2023 marked a period of research and exploration around Generative AI in the legal sector, paving the way for a more execution-focused 2024. Law firms are now rapidly developing task forces and working groups, typically led by business-oriented staff, to test and implement AI solutions across various domains such as legal operations, marketing, and business development. Simultaneously, these firms are cultivating an internal culture of AI fluency through targeted education programs, potentially offering Continuing Legal Education (CLE) credits and counting these activities as billable hours to encourage adoption among their associates. This proactive stance is not only about keeping pace with technology but also about leveraging AI to refine service delivery and maintain competitiveness.

Confidentiality and Partnerships

Law firms are generally tight-lipped about the AI tools they use and develop, often requesting NDAs when engaging with vendors. However, there is a growing trend of firms seeking partnerships and collaborations with AI vendors, particularly younger companies, to guide them through the product development cycle. Firms want to be closely involved and updated when changes or pivots occur in the AI models they use.

Research, Planning, and Execution

2023 was characterized by significant planning and hype surrounding Generative AI in the legal industry. In 2024, the focus has shifted towards execution, with firms realizing the need to move quickly to stay competitive. Many firms have established dedicated task forces and working groups, often led by business staff, to explore and test AI products for legal operations, marketing, and business development.

Internal Education and Adoption

Law firms recognize that technology competence, particularly in AI, is becoming crucial in the industry. Innovation teams are spearheading AI education and training efforts, with some firms offering CLE credits and billable hours for associates working on innovation projects. Firms are also building dashboards to track AI education, usage, and recommendations from their testing staff. The consensus is that increased exposure and education are the best ways to minimize risk and encourage adoption.

Risk Awareness and Mitigation

Most firms are initially focusing on implementing AI in less risky areas, such as administrative and operational functions, to learn what works and what doesn't. For AI products that require client contract information, firms are requesting certificates of compliance before engaging their IT teams. While formal AI policies are not yet widespread, firms are taking steps to mitigate potential risks.

Use Cases and Applications

Generative AI is being utilized across various departments in law firms:

- Knowledge Management: translation, summarization, data organization

- Business Development and Competitive Intelligence: web searching, chart creation, trend and opportunity identification

- Research: citation retrieval for information auditing

Firms are considering the impact of AI on their leverage model and billable hours, with some exploring options to pass costs to clients or offer AI-driven services as add-ons.

Deployment and Integration

Some firms are conducting formal AI roll-outs, with a preference for products that integrate seamlessly with their existing workflows and solutions. Microsoft Azure is the most commonly used technology platform among law firms.

Client Engagement

Law firms are beginning to include internal AI teams in client meetings to discuss the technology's potential. Cost considerations are a key factor, with firms exploring ways to pass AI-related expenses to clients.

In general, law firms are actively navigating the rapidly evolving landscape of Generative AI, balancing the need for innovation with risk mitigation and client expectations. As firms continue to educate their staff, form strategic partnerships, and identify impactful use cases, the legal industry is poised for significant transformation driven by generative AI in the coming years.

DataPlus AI — Co-Pilot for Legal Business Development

DataPlus is an AI-platform that offers three distinct skillset modes that allow business development professionals, researchers, and competitive intelligence staff to 1) Search; 2) Analyze; and3) Generate high-quality and thought-provoking insights that lead to meaningful conversations with their current and prospective clients.

By leveraging DataPlus, legal business development professionals can save time, streamline their client screening process, and gather deep insights about their current and prospective clients, industries, markets, and competitors. To learn more about DataPlus and experience the benefits, sign up to try the DataPlus platform today.

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