Global News
LexisNexis® Legal & Professional, a leading global provider of information and analytics, today released results from a survey of senior leadership at top U.S. law firms and legal professionals at Fortune 1000 companies. The survey was conducted to better understand the business impact of generative AI technology on the legal industry and how it is redefining itself.
Rapid Uptake and Generative AI Investments
Nearly all the legal executives surveyed expect their investment in generative AI technologies to increase over the next five years (90%). The survey found that 53% of Am Law 200 firms have purchased generative AI tools and 45% are using them for legal work. 43% of Am Law 200 leaders indicated their firm has a dedicated budget to invest in the growth opportunities presented by generative AI in 2024.
Reshaping the Law Firm Business Model
Generative AI is presenting opportunities for law firms to create value for their corporate legal clients through new lines of business and strategic services. 70% believe these solutions will enable new value-added work product for clients, with about a third (30%) expecting these solutions to result in a direct impact on firm revenue. Nearly half of law firm leaders are currently exploring new lines of business or billable opportunities made possible by generative AI technologies (47%). Regarding the bottom line, nearly half (47%) expect to achieve a reduction in costs from the use of generative AI solutions.
More Fortune 1000 executives expect generative AI to produce value for their organizations, with three-quarters (76%) expecting cost savings for their legal departments and 72% expecting the technology to increase the ability to complete more work in-house.
“Generative AI has tremendous potential to transform law firms’ business models and create new forms of value for their clients,” said Sean Fitzpatrick, CEO of LexisNexis North America, UK, and Ireland. “We are working closely with customers to integrate our leading generative AI tools into their workflows to drive unprecedented efficiencies and quality for both law firms and corporate legal departments.”
Gap in AI Expectations
Fortune 1000 in-house counsel have higher expectations regarding the use of generative AI in law firms than Am Law executives.
The biggest gap exists around expectations for changes in billing. The majority of Fortune 1000 executives expect to see a reduction in billing from outside counsel due to efficiencies created by generative AI (80%). However, corporate clients have not communicated those reduced billing expectations to law firms. While 43% of law firms agreed with the statement that generative AI will reduce billable hours, only 9% of large law firm leaders indicated their corporate clients have told them they expect their firm bills to be reduced as a result of generative AI, and few firms (11%) are changing or planning to change their billing practices.
While two-thirds of in-house counsel approve of law firms using generative AI in legal matters, only a third of law firm leaders believe their corporate clients approve of this use.
The smallest gap in expectations is seen regarding the use of generative AI and other cutting-edge technology at law firms, as a majority of both groups believe corporate clients expect this from their outside counsel.
Continue reading this article on the LexisNexis website
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