A lot of Artificial Intelligence (AI) noise is around the big firms, but small and mid-market firms are now also standing at the threshold of an AI-driven transformation. And it’s imperative they proactively consider the potential impacts of AI and strategically position themselves to harness its transformative power.
AI has come out of the shadows in 2023 to emerge as a disruptor across industries, with the legal sector being no exception.
The AI advantage for small and mid-market firms
AI offers opportunities for small and mid-market firms to streamline operations, enhance client services and remain competitive in an increasingly digitised legal landscape.
From contract analysis to legal research and document creation, AI-driven solutions can significantly expedite routine tasks, allowing legal professionals to focus on higher-value strategic activities.
For example, imagine you need to generate a fee proposal for a relatively complex matter, involving multiple departments. You need to draw up all the elements and configure the proposal, which can be time-consuming even if you use templates.
Using AI, you could simply instruct the chatbot to build the quote for you. If it requires changes, you can simply tell the bot what to do. This isn’t for the future — we do this right now!
Challenges on the AI frontier
While the promise of AI is undeniable, small and mid-market firms must navigate challenges inherent in adopting this transformative technology. Perhaps the three main concerns revolve around data privacy, the habit of AI to ‘hallucinate’ and the perceived threat of job displacement.
The data privacy problem can be addressed by pointing AI at your own data, not the wider world. You should also be sure that your AI system references its sources (a key element in our systems).
As for the problem of ‘hallucination’ (the tendency for AI to invent ‘facts’), this has had some high-profile media coverage.
However, it’s important to remember that AI should act as an assistant rather than a replacement for human lawyers. Output needs to be checked (just as a partner would check the work of a trainee). This also plays into the third point — AI is a tool to enhance human capabilities and not replace them.
To illustrate this, ChatGPT wrote this article for me using prompts I prepared for it. It did the ‘heavy lifting’ and I spent a bit of time refining the machine’s output.
Strategic alignment: Small and mid-market firms should identify pain points to determine the best-fit AI solutions to address these challenges.
Investment in talent: While hiring AI experts is beneficial, training existing legal professionals in AI concepts is straightforward and can foster a culture of innovation within the firm.
Ethical and regulatory compliance: AI adoption in the legal sector raises ethical considerations, particularly regarding data privacy and bias mitigation. Small and mid-market firms must ensure that AI systems adhere to industry regulations and uphold ethical standards.
Data management: AI relies on data. Small and mid-market firms should assess their data management practices, ensuring that data is organised, clean and accessible for effective AI implementation.
Collaboration with tech partners: Building relationships with technology providers specialising in legal AI solutions can help small and mid-market firms stay updated on the latest advancements and tailor solutions to their needs.
The road ahead
While AI adoption requires careful planning and consideration, the potential benefits outweigh the challenges. Small and mid-market firms that seize the opportunity to integrate AI into their operations will be better equipped to meet the demands of the current and future legal landscape, enhance client relationships and ensure sustainable growth.