Why AI can be pivotal for your growth
By leveraging AI and adopting innovative growth strategies while maintaining a human touch, SME law firms can position themselves competitively in an increasingly challenging sector
Artificial intelligence (AI) can dramatically enhance efficiency and productivity, enabling lawyers to focus on more strategic and complex tasks. Automating routine tasks significantly reduces operational costs and improves accuracy in document review and other repetitive tasks. Moreover, AI can enhance client service, marketing, communications, and provide personalised and responsive interactions through innovations like chatbots and predictive analytics.
Having weathered the economic storm of the pandemic and emerged with sustained profitability, SME firms now stand at a crossroads where integrating artificial intelligence (AI) could be pivotal to their continued growth. However, the journey towards AI adoption is not without its challenges. Concerns about costs and potential workforce impacts loom large, creating a milieu of uncertainty and hesitation.
Smaller law firms should pay keen attention to the investments and advancements made by larger firms, positioning themselves to benefit from these developments in the long term. It’s strategically wise for smaller firms to observe the significant expenditures of their larger counterparts, and then leverage the resulting innovations to their advantage.
A case in point is Allen & Overy’s recent collaboration with Microsoft and the legal AI startup Harvey, as reported by the Financial Times in December 2023. This partnership yielded an AI-powered contract negotiation tool, expected to significantly reduce negotiation times. Once this tool becomes broadly accessible through Microsoft, it’s likely to set a trend among other major law firms. Smaller firms should be ready to adopt and adapt these technologies to enhance their operational efficiency and competitiveness.
As of 2024, there are several AI-assisted legal tools available in the UK market specifically designed for law firms. These tools offer a range of functionalities to enhance legal practice, including legal research, document analysis, contract drafting, and case management.
Despite the clear benefits, implementing AI comes with its challenges. The initial cost of implementation can be significant, particularly for smaller firms with limited budgets. Data privacy and security are paramount, given the sensitive nature of legal work. There’s also a cultural resistance to change, as the adoption of new technologies requires a shift in mindset and operations. Additionally, ensuring continuous quality control as AI systems evolve is critical to maintaining accuracy and relevance.
The other limitation is lawyers themselves. The majority of lawyers, while interested and perhaps daunted, remain unsure as to how AI may be used, reflecting the sector’s cautious approach to new technologies.
There is also the concern that AI may render them redundant. Regardless of this concern, there is, albeit in some cases reluctant, a growing acknowledgement of the role AI and other technological advancements will play in the future of legal services. Investments in client-facing online portals and other efficiency-improving tools are being considered to enhance client experience and firm efficiency as a matter of necessity.
The future belongs to those who innovate and adapt while upholding the highest standards of legal practice and ethical considerations. For SME law firm leaders, the journey towards integrating AI and strategic growth is not just about adopting new technologies but about leading a cultural shift towards a more efficient, client-focused, and resilient practice.
Farringford Legal is a boutique law firm providing flexible and affordable legal services for SMEs and business owners.
