AI's Slow Growth in Law Firms

Technology implementations of AI are like any other project in my view; they must have a clearly defined business problems that they solve and criteria for success.

Many large firms now have teams testing these new technologies. Promising areas include contract due diligence, legal research, and eDiscovery. However, the road from testing to adoption is usually long in most firms. It is a common lament at gatherings of law firm CIOs that lawyers are often unwilling weather the period of lower productivity that learning new technologies entails to reap the benefits, especially when the benefits are seen at an enterprise level and are not immediately apparent to everyone. The imprimatur of firm management helps, but even with that support, it often takes time for some to embrace the new.

As the market for AI-enabled technologies shakes out and firms gradually adopt the winners among them, their lawyers will need to adjust to new work paradigms. Billable tasks that were handled by mid-level associates may disappear and new tasks will likely arise. Many firms are already facing pressure from clients to discount certain work, and increasingly, clients are moving some of their routine work in-house.

Despite the market pressure, I do not think widespread adoption of AI tools will come as quickly as some predict. Change is more likely to be incremental in firms who adopt the best of these new technologies. Once the products do gain momentum, it is likely that there will be a limited window for adoption and that firms who are late in moving will struggle.

Once the promise of AI is achieved, the cost reductions and the change in methods driven by these technologies may force firms to reassess their pricing models. Further, AI-enabled analytical tools may help firms move away from using the billable hour as the basis for pricing services. The idea of changing the paradigm for billing from the billable hour to one that aligns the firm’s incentives with client’s needs has been around for a very long time. It is possible that, with the rise of AI, lawyers will no longer have to keep track of hours that are still the measure for which they are paid. If AI can deliver that, I am confident lawyers will adopt.