Law firms will spend millions on AI this year – the equivalent of £2k per lawyer – but many are still struggling to make it work, new research shows.
AI spend has skyrocketed as firms fight to keep up with the rapidly evolving technology, with those in the UK setting aside an average £775k and US firms £853k to embed it into their business.
The figures equate to £1,848 per UK lawyer and £2,336 per attorney in the US.
Despite this, however, the study by Passle, the AI-powered thought leadership platform for professional services, found that there were still significant barriers to adoption.
They included concerns about data privacy (55%) and hallucinatory outputs (36%) where the response generated by AI includes false or misleading information. Firms also reported internal struggles including IT restrictions (52%), inability to implement (50%), inability of suppliers to deliver proven solutions (45%) and an incompatible company policy (25%).
Passle, which is launching Crosspitch AI, a new tool to help lawyers source and share insights with clients about other relevant services their firms may offer, spoke to marketing and business development chiefs at 150 firms – half in the UK, half US, and each with at least 100 lawyers.
The most common reason for using AI was to save time (67%), with the likes of A&O Shearman turning to technology to help drive efficiencies. The magic circle firm recently announced it had collaborated with AI start-up Harvey to create a tool to lighten the load of senior lawyers by helping with time-intensive, low-billing tasks.
Improving data analysis (63%), helping to develop marketing content (63%) and new business pitches (51%) were also among the main drivers, although interestingly only a third of firms (37%) thought AI would help them cut costs. Many said they felt pressure to use it from clients (44%) and competitors (34%) to demonstrate they were keeping up with the times.
Connor Kinnear, Chief Marketing Officer at Passle, says: “The main barriers to AI adoption by law firms appears not to be a lack of funding, with substantial budgets set aside, or indeed the availability of the technology itself. What seems to be the biggest barrier is firms’ ability to apply it.
“That and the increased demand for thought leadership has been the driving force behind us developing Crosspitch AI, which helps lawyers to easily source and share content that is relevant to their clients, demonstrating the full expertise of their firm whilst freeing up their own time to spend on other tasks.
“Most firms are willing, but not always able to harness the power of AI to make themselves stand out, and what is clear is that there needs to be investment not just in terms of funding but in understanding the tech that’s on offer, how it works, and what is the right fit for them.”
Following increased demand from clients for help with thought leadership generation, Passle developed Crosspitch AI to help lawyers instantly tap into their firm’s full expertise, cross-referencing content with the profiles of lawyers across the firm and alerting them to relevant insights to share with their clients.
The AI-powered search, designed specifically for the professional services market, will also enable law firms to improve their website’s lawyer search, using a combination of AI and Passle’s own data to deliver much more accurate results for those looking for legal services.
Trials of the easy-to-use tool by several large law firms have already proved successful, with Crosspitch AI rolled out in as little as two weeks.