A new Bellwether survey by LexisNexis of ‘Small Law’ found that 34% of lawyers in this segment believe genAI will make their firm more profitable. And, as far as AL can see, they’re right!
Other top views were that, as expected, genAI will mean more investment in tech, and that it will drive new lines of business (see Garfield for example), and it may lead to new pricing mechanisms.
Now, if you want someone to do something you can seek to do carrot, or stick, or both. In this case the carrot for Small Law is a very substantial one….Why? Because a fair amount of small- to medium-size firms focus on practice areas that have been highly standardised – even if the human element always brings random risks and new fact patterns into play.
They also tend to be more open to fixed fees, or at least willing to give you a very clear scoped fee. Add those two things together: clear and standard workflows, and an incentive to be rewarded by efficiency (rather than see speed as the enemy of profit), means Small Law is looking at AI as a win.
(Another aspect is that as economic conditions get more bumpy for some, not having to hire as many new staff to do the same amount of work – as some routine work is now handled in part by AI, also sustains Small Law finances.)
Not everyone will take that view, clearly. But of the 300-plus lawyers surveyed in England & Wales, having a third see AI as a profit-generator is great news. Moreover, some may not really have used AI much yet, so, this suggests those that do see real positives.
The survey also found that, predictably, many lawyers are going to use ‘raw’ LLMs, i.e. ChatGPT and similar open-to-all models, to get some of their work done. This limits what they can achieve – as legal tech tools connected to oodles of vetted data, (e.g. case law research) and refined tools, (e.g. for contract review) – will tend to give you better results, and so not using legal tech tools reduces what they can do with AI.
I.e. using ChatGPT just on its own to try and review important legal docs is a big risk. So, that’s a limiting factor. Or put another way: to get the most out of AI in a legal environment you’ll need to use properly customised and refined legal tech tools.
This survey data comes as more and more investment goes into legal tech startups focused on Small Law, e.g. covering plaintiff firms’ needs.
Now, Big Law may not at first be too happy about all of this. But, if Small Law is more efficient, and perhaps can drop its prices for some needs because of AI, then it will generate more matters. Some of those, not all….but some…..may escalate up into matters that Big Law and inhouse teams that usually work in that space need to deal with. QED: Small Law + AI = (some) more work for Big Law.
P.S. you may wonder why AL is covering a few more stories about Small Law than before. The answer is that although AL will always be grounded in Big Law, if there is something happening that has a strategic impact then it needs to be followed – and this is a real change in the status quo.
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Legal Innovators California Conference, San Francisco, June 11 + 12
If you’re interested in the cutting edge of legal AI and innovation – and where we are all heading – then come along to Legal Innovators California, in San Francisco, June 11 and 12, where speakers from the leading law firms, inhouse teams, and tech companies will be sharing their insights and experiences as to what is really happening and where we are all heading.
We already have an incredible roster of companies to hear from. This includes: Legora, Harvey, StructureFlow, Ivo, Flatiron Law Group, PointOne, Centari, eBrevia, Legatics, Knowable, Draftwise, newcode.AI, Riskaway, SimpleClosure and more.
And if you are a startup – for inhouse teams, or for law firms, or both, and would like to get involved, then please contact:
robins@cosmonauts.biz
See you all there!
More information and tickets here.