It’s clear that generative AI (GAI) has taken hold of the legal industry. One panelist remarked at around the 20-minute mark of her panel that she was confident she’d set the record for going the longest before mentioning AI in any session throughout the four days.
While last year's conference focused on unpacking what GAI is, Legalweek 2024 in New York City took a deeper dive into what potential the technology holds for the industry and the steps to practically deploy it.
The legal industry was one of the first to be regarded as an area ripe for GAI disruption. After some industry surveys were released about the overwhelming numbers of legal tasks that could be replaced by the technology, many wondered whether the time for robo-lawyers had finally come.
Now these fears have mostly dissipated as many have experienced valuable use cases first-hand and embraced the idea of working alongside the technology.
In fact, GAI continues to be advertised as such an unprecedented time-saver for legal that it could level the playing field between small and mid-size firms and Big Law for those who implement it strategically. “It will no longer be the big that eat the small but the fast that eat the slow,” noted Heather Nevitt, editor-in-chief of Corporate Counsel and Global Leaders in Law at ALM, during her State of the Industry address.
But how much time firms can afford to save is a question some have started asking.
“Let’s say we were to spend a million dollars for a tool to bring into the firm. And that tool makes us three times more productive. The economics really don’t work for a law firm in the sense that we incur the cost of the tool, we incur the cost of the training and the change management and invest in time to get the attorneys up to speed,” noted Peter Geovanes, chief innovation and AI officer at McGuireWoods.
He added, “The end result is a task that typically we would have charged the client maybe six hours for, now we’re going to charge for one or two. That’s a lot of money on the table.”
This inevitable argument about billable hours was countered by several speakers framing the cost savings in terms of more than just revenue, particularly in increasing client loyalty by putting clients’ needs ahead of the firm’s. “Clients are not necessarily hiring Orrick because the firm is using a certain tool,” said Vedika Mehera, Director at Orrick Labs. “But we’re able to very confidently say the lawyers are enabled to be more effective and offer enhanced service delivery. We can say: ‘we’ve listened, and here’s how you’ll grow because of this tool’. It means we can actually serve more clients, more effectively.”
A rock-solid business case is crucial to get a real solution
Only 50% of those who responded to a recent Thomson Reuters Institute survey tied their digital transformation to initiatives at the C-suite level. The most innovative firms are looking for tools that impact internal processes as well as client experience.
Vedika Mehera urged attendees wanting to effectively implement tech to not make decisions in a vacuum and instead plan with the appropriate stakeholders to ensure buy-in and success. “Talk to the people whose problem you’re trying to solve. Clients need to be involved alongside lawyers and technologists. Be thoughtful, get requirements, and do market research. What are the KPIs and business drivers? If a tool doesn’t fit an existing need and workflow, it’s not going to be used.”
When it comes to client research, be curious and ask a lot of questions to get to the core of their pain points, then figure out if there’s a business case to solve it. The tech you choose to implement needs to address a real need and not just be a hammer in search of a nail, and the best solutions come from first-party conversations and direct client feedback. For example, Vedika has found success in simply asking what repetitive tasks lawyers at Orrick don’t like doing — like finding the same 15 terms on every deal sheet — and looking for AI solutions that can augment them.
Sometimes clients actively push tech adoption and drive where law firms spend their money. Michael Willes, Partner at Tonkon Torp LLP, recalled a conversation several years ago that he says motivated him to lead the charge on tech adoption in that firm. “The client asked how we are leveraging tech to do their work more effectively and we were caught flat-footed.”
However, lawyers will always be the reason a client engages one firm over a competitor, not the tech. “Being a lawyer is being someone’s go-to for specialized advice during the most urgent moments in their life,” noted Michael. “That’s not going to change. The concept of the person behind the tech who has the background knowledge of the law is the real value.”
Should firms build or buy?
“The question of build vs buy is as old as time, and still has no correct answer,” said Kay Kim, Chief Practice Innovation Officer at Paul Hastings LLP. “Some firms are comfortable with building and have the resources, but legaltech vendors can save a lot of pain as long security requirements are met.”.
A question firms must ask themselves is whether they want to staff and operate like a law firm or a software company. Firms may have an IT department, but building and running a software development team is a very different challenge. The “move fast” ethos of software companies is also very much at odds with a risk-averse law firm philosophy.
However, if commercialization is a key goal of developing the software and a firm has the resources to hire the right talent, then it makes sense to develop the capabilities to build and maintain it in-house.
Kay said she has found success when she has aimed for a middle ground. “Partner with an agile, specialized company that is open to having you influence their product roadmap and you get the best of both worlds,” she says. “The best vendors become true partners and see your feedback as a gift.”
Mariana Loose, Chief Marketing Officer at Alston & Bird said her deciding factor for whether to use a vendor is integration. ”Any new solution must enhance our other tools and not create new problems.” For her firm, IT and security need to be a big part of the equation — especially when it comes to product integration and data movement — and these teams need to have buy-in when finding external tools.
Regardless of whether the tech is built in house, supplied by a third-party vendor, or somewhere in between, it was unanimous that security needs to be a top consideration. “Have a checklist in order of importance,” says Kay. “Security is always number one. Law firms deal with sensitive client information every day and PII is widely defined. The operational implications and reputational risk of a data breach could undo an entire firm.” Usability is top of her list as well. “In order for people to actually adopt the tool, the user experience and interface must be easy, intuitive, modern, and clean.”
Moving from idea to execution
When it comes to encouraging adoption of a new tool, communicating the value of the change is a critical first step to turn any apprehension into excitement. “To overcome resistance, make sure people understand the value the change offers them both personally and at the firm level,” said Jason Chancellor, Chief Information Officer at BAL. “Show them measurable value so they feel like they’re not going to be replaced or negatively impacted, and connect the value to both efficiency and client experience. Show them how it allows lawyers to practice at the top of their license.”
People have a record of success with the status quo, and by introducing a new way of doing things they are being asked to risk some of that success.
To mitigate this, Jason encouraged attendees to reframe new tools and processes as a commitment to continuous improvement. “Adoption comes down to communicating how it can improve the lawyers’ day-to-day and the client relationship.” His advice is to be prepared to articulate what is happening, why people need to pay attention, and how it’s going to change their lives for the better.
Vedika Mehera shared an example of a successful tool rollout at Orrick. “At the end of last year, we piloted an AI tool that helped our lawyers search the knowledge base faster,” she said. “Their priority was to close deals quickly before the holidays, and as soon as they saw how the tool could help them use the knowledge base faster and close faster they saw the value in it immediately.”
It’s important to define what a successful launch looks like for your firm: it may not be 100% adoption depending on the tool and the firm’s demographics. “You need a strategy that contemplates those who may feel left behind,” said Rachel Dooley, Chief Innovation Officer at Kirkland & Ellis. “Start with those excited by the change to create champions, and tell them what things aren’t in order to build transparency and trust. For example, it won’t remove all your non-billable work, but it may reduce it by 50%.”
The human element of any change management is going to be the most difficult to manage and requires a strong leader. An Trotter, Head of Legal Operations at Hearst Corporation leans on her background in psychology. “Establish a track record as an empathetic partner,” she said. “Understand that there could be a wide range of individual speeds of working and gently but firmly push people past their comfort zone. Most importantly, don’t come in too hot before winning hearts and minds. Slow and strategic always wins.”
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