Ari Kaplan recently spoke with Olivia Mockel, the chief brand and market strategy officer at SurePoint Technologies; Debbie Foster, the CEO of the Affinity Consulting Group; and Laura Wenzel, the global marketing and insights director at iManage.
The three companies are part of a consortium that supported a new market research report featuring the perspectives of midsize law firm leaders called Midsize Law Firms Are Balancing Potential and Pitfalls in Charting an Unpredictable Path Forward.
They discussed how chief financial officers, chief operating officers, chief information officers and executive directors are approaching generative artificial intelligence, data and financial intelligence, technology adoption and training to help drive their firms into a new era of legal services. Download a copy of the executive summary here.
Ari Kaplan: Sixty-three percent of the participating leaders work at firms that have officially adopted generative AI, with almost half (42%) mentioning Microsoft Copilot, but 81% report a fear of generative AI at their law firm. How are you seeing law firm leaders reconcile this new era?
Debbie Foster: It’s interesting that 63% have adopted generative AI. The reality is that it’s being adopted in pieces and parts because of that 81% issue around fear. The fear is that it will be misused. The fear is that people will get lazy and stop checking the AI’s work. The fear is around billing, client value and all the things that go along with the system supporting the law firm, the gears that spin and make everything work. And so where we have seen those 63% succeed, it is often not firmwide adoption, where everyone is using it. It’s that the real estate team found a way to do this one thing or these three things in a more practical and efficient way using a generative AI tool. And to quickly touch on Copilot, a lot of our clients are piloting it in smaller groups within the firm and figuring out how it can make their lives better. But that isn’t necessarily on the legal side. They are looking at how it can help them manage their days better, manage their time, see what’s going into their calendars and prepare for meetings, whereas the other tools being adopted are much more specific to the legal work being done. I have been saying for a long time that generative AI, to be successful in a law firm, requires us all to work on finding believers, people who believe that work can be done differently than it is currently. And those believers are the ones who will take that 63% and really see the value and success of the tools they’re adopting and also help spread the word to others in the firm to make sure we’re using more of them.
Ari Kaplan: Sixty-three percent of the lawyers at the firms represented use data, such as financial metrics and performance insights, to manage and expand their practices, with more than half automating data extraction. What are the long-term benefits of leveraging data in this manner?
Olivia Mockel: You’re speaking my language. Sixty-three percent is a really encouraging statistic because it shows that firms are treating data not just as a reporting tool but as a strategic asset. And we know the firms that use data to understand where they’re spending their time, resources and revenue are the ones that can make smarter decisions about pricing, staffing and client service. Those are the firms that have the advantage. They become more predictable, more profitable and more agile, so that data turns into intuition and insight. It is something we talk a lot about at SurePoint. It means they can identify at-risk clients. They can spot their emerging practice areas. They can understand the factors driving the highest margins. And those are the firms that are really driving what we like to call firm performance.
Olivia Mockel is the chief brand and market strategy officer at SurePoint Technologies; Debbie Foster is the CEO of the Affinity Consulting Group; and Laura Wenzel is the global marketing and insights director at iManage.
Ari Kaplan: Forty-five percent of respondents noted that the emergence of generative AI has influenced their firm’s approach to managing its knowledge to provide better source data for large language models. How is document management evolving to address that shift?
Laura Wenzel: That number is going to increase significantly. With the emergence of gen AI and the notion that it needs clean, curated, governed data to produce accurate, relevant results, this is only changing the mindset of many legal professionals and law firms, who historically may not have curated content. With the emergence of many AI capabilities and AI-native vendors, it has become a priority for many to understand that, with AI and large language models, garbage in, garbage out. So it’s a natural maturation for these organizations. They know that they need to identify the best of their work, whether we call it knowledge management and curated content or if we simply identify it as my best work, my best practice or a collection, it doesn’t matter how we define it, but we’re going to see that number increase year over year as these organizations embrace what gen AI can bring to their business.
Ari Kaplan: More than half (52%) of the participants acknowledged that their firms have eliminated roles due to technology in general, and 42% have adjusted their training in response to artificial intelligence. How can legal professionals take advantage of new training opportunities to enhance the value they provide to the firms?
Debbie Foster: As firms have moved more and more to the cloud, that really speaks to why roles are being eliminated locally. That comment about training is really interesting, too, because we need different kinds of training. It isn’t the old style of training, which trains them one time and then hopes they all figure it out. The adjustment to training is repeating information that people have already heard. It is enforcing policies and rules and encouraging people to think about how and where legal work can be systematized. And how do we train our people to take advantage of the tools that they’re using every day to get their work done? As it relates to AI, how it’s incorporated is important, and if firms aren’t doing the right kind of training, it goes back to what you talked about before: the 81% of people reporting fear. There must be training programs in place to help lawyers navigate AI, what it means in their practice, how they should use it, and the measures they should take to ensure they don’t end up on the front page of a newspaper somewhere.
Ari Kaplan: Seventy-four percent of participating leaders reported that automation is transforming how work is done in law firms. How is that shift affecting revenue?
Olivia Mockel: That’s a stat I’m really happy to see, and it’s been a long time coming. I’ve been in this industry for a while now and want more and more firms to harness automation because I can see all the benefits, and so 74% is a great number. We know it helps lawyers free up their time from all those repetitive, low-value tasks, such as data entry, billing and document automation. And they can redirect that time to high-value work. The firms that are doing that are more efficient and capture more revenue; there’s no question around it. Automated time tracking reduces revenue leakage. Workflow automation or payment services accelerate billing cycles. But it’s not just the immediate financial benefit. Automation also helps with scalability. So firms can grow without having to keep adding head count. They can maximize the resources that they’ve got. They’ve improved their margins. They can take on more clients, larger matters. Automation’s not just about working faster. It’s about changing the economics of how a firm operates. And so every human hour is just more valuable. That’s where the real revenue and performance happen.
Ari Kaplan: Laura, 68% of the respondents see the relationship between law firms and in-house teams evolving. How is technology affecting that relationship?
Laura Wenzel: This is a question we’ve been asking in different surveys and across multiple rounds of research, and the response has been consistent. We’re definitely seeing in-house adopting gen AI a little bit quicker. I think that has to do with the fact that they have IT departments; there are other organizations like marketing that are really embracing the technology, so there’s a lower barrier there. As such, law firms are seeing them request this information in RFPs. But I’m also hearing law firms and legal professionals talk about how they want to show that they’re using AI that their clients want them to be using and leveraging technology, but at the same time, and possibly in the same RFP, they want to know exactly where you’re using it and want to limit it. So it’s like this yin and yang right now. I’m definitely seeing where in-house is planning to keep some of that work that is low risk and repetitive and to use law firms for the value and expertise they bring to more complex matters. We’re also seeing a shift in in-house teams wanting some element of self-service. Across the board, both in-house and law firm legal professionals want a more trusted partnership, so we’re going to continue to see them come together, be more collaborative and possibly leverage learnings and best practices as we all figure out how to use gen AI.
Ari Kaplan: Ninety-four percent of participants said legal technology helps their teams increase revenue and improve client service, and 81% said it helps drive law firm growth and retain talent. What are some best practices for maximizing the value of technology?
Debbie Foster: One of the biggest ones is enforcement. Making sure that the software programs that firms have adopted are a single source of truth when that is what makes sense, like document management and practice management. Making sure we don’t have any shadow IT, where people are keeping lists of information in other places. The idea of a firm being able to talk about its technology and how its lawyers use it for recruiting and retention is such an important issue going forward. Younger lawyers entering firms want to know that the firm is using a modern technology stack and then providing training. It’s so critically important, and it isn’t a one-time event. Firms need to build a culture of training that provides continuous opportunities for their lawyers, paralegals, legal assistants and support teams to learn more about the tools they use because those tools are changing all the time. We no longer receive an upgrade to a software program once a year. They’re constantly being updated, so we need to keep training and looking for ways to improve ROI from the technology we’re using.
Ari Kaplan: Thirty-two percent see technology impacting their billing model, but none have actually changed it because of technology. How do you see law firms gradually shifting their billing practices?
Olivia Mockel: That really captures where the industry is right now. Firms can recognize that technology could enable new billing models, but they haven’t yet taken that step. Historically, billing practices have been tied to predictability, and technology has brought greater visibility into effort, value and outcomes, and that foundation is starting to shift. With AI, everyone’s asking how much it will cause change. It will likely be a gradual evolution, rather than a quick overhaul. I know everyone thinks AI will change the game overnight, but firms have been using data automation to understand their profitability by client, matter type and attorney. They already have the insight. This means they will continue to develop easier, better ways to price, including value-based or fixed-fee arrangements. They now have the transparency they need based on results, rather than hours. I don’t believe the billable hour will disappear overnight. However, the data, technology and automation are all in place, and I think it will be a gradual shift.
Ari Kaplan: Ninety percent of participants reported building a modern, efficient technology stack. What are some best practices for doing so most effectively and in a way that will allow firms to adapt to a rapidly changing market?
Laura Wenzel: This question is really critical. Gen AI has definitely raised the stakes and created a lot of conversation. Some may argue it has created some level of chaos, but to be successful, there are fundamental things tech teams and IT need to get in place. You can’t really just leapfrog to gen AI. You really need some of the basics. And we know from this research and from some of the end-user research we’ve done that people are still looking for the basics. They’re looking for an easy way to get the job done. They’re looking for an easy way to manage their inbox and share and collaborate. The best way to get started is to understand the workflow. Don’t make assumptions because as humans, we all employ workarounds that we don’t even know that we’ve done. So it’s really about understanding your legal professionals’ workflow, and each practice area might have unique characteristics. Take the time to understand those characteristics. The really neat thing about what makes gen AI so unique is that it’s not a technology that you can throw at people. It is tied to the human element of work and how individuals work, so it’s important to engage your end users and understand the problems they’re trying to solve. It’s a measured, pragmatic approach. I don’t think there’s any shortcut that any of us can take to the land of gen AI. We have to take the right steps, getting clean, centralized, governed content, understanding the workflow, the processes, so that creating their best work product is not the end of their workflow. They have to upload it to a court site. They have to get a stakeholder to review it. They need to get signatures. It’s really understanding that workflow and piecing it together for your legal professionals.
Listen to the complete interview at Reinventing Professionals.
Ari Kaplan regularly interviews leaders in the legal industry and in the broader professional services community to share perspective, highlight transformative change and introduce new technology at his blog and on Apple Podcasts.
