Law Firm AI Continues To Be Embraced By Law Firms Everywhere

Ben Thompson, legal affairs writer

Law firm AI applications are growing in importance as the legal industry undergoes rapid transformation as firms around the globe recognize the importance of embracing generative AI to remain competitive.

While historically cautious about technological change, the pace of AI advancement and its swift adoption by corporate legal departments has forced law firms to adapt quickly or risk being left behind.

In recent weeks, several prominent law firms on LawFuel’s Prestige Law List such as Latham & Watkins, Cleary Gottlieb, DLA Piper and Reed Smith have hired AI specialists for newly created roles, signaling an emerging talent war.

This trend is not limited to the U.S. – firms in Canada, Spain, Ireland, Latin America, Mexico, Australia and New Zealand are also appointing AI leaders, collaborating with tech giants, and developing their own AI tools.

Law firms are testing the ‘competence’ of AI in their markets.

Law firms’ newfound urgency to adopt AI is largely driven by the actions of their clients. In-house legal departments are rapidly embracing AI to handle tasks like legal research, contract drafting, document analysis and risk assessment more efficiently and cost-effectively than outsourcing to external counsel.

The traditional law firm model built on leverage and billable hours is under threat.

To stay relevant, law firms must change their staffing and billing practices, prepare for alternative fee arrangements, and hire AI-savvy lawyers who can harness the technology for high-value transactional and litigation work.

Younger lawyers and new partners may be more open to seizing the opportunities AI presents. AI tools and apps rise in importance on an almost daily basis.

Leading firms like Dechert, DLA Piper, Reed Smith and Orrick are investing heavily in training their lawyers and incentivizing innovation.

Firms like Allens have developed their ‘Airlie’ app.

Sullivan & Cromwell set up its own AI division.

Macfarlanes and Allen & Overy (now A&O Shearman) have deployed the Harvey AI app.

The regulatory landscape is also evolving rapidly, with the EU recently approving the groundbreaking AI Act.

Law firms with strong regulatory practices may benefit as companies seek guidance on compliance. While risks undoubtedly exist, law firms recognize they are at an inflection point.

As one partner put it, “If you are not using AI, you are part of the past.”

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