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January 25, 2024 6 minutes to read ∙ 1300 words

Generative AI and the Small Law Firm: First Steps for Law Firm Leaders

Thomson Reuters Institute

Mark Haddad

Reprinted with permission from Thomson Reuters Institute. © 2024 by Thomson Reuters. All rights reserved. The Thomson Reuters Institute engages professionals from the legal, corporate, tax and accounting, and government communities to host conversation and debate, analyze trends, and provide the insights and guidance needed to help shape the way forward in an evolving and increasingly complex environment.

This is the third and final installment in our series discussing how small law firms can address the opportunities and pitfalls brought by generative artificial intelligence. The first article provided an introduction to the ways that AI can help level the playing field for small law firms. The second article shows how AI gives small firm lawyers a platform to leverage and extend their domain knowledge to compete with large firms.

What can a small law firm do right now to leverage generative artificial intelligence (Gen AI) in its practice?

Let’s start with what it doesn’t need to do: It doesn’t need to hire data scientists or turn its lawyers into AI experts. For smaller law firms, as for most firms across the spectrum, Gen AI technologies will increasingly be embedded in the products they use. If a firm deploys those products effectively, it is deploying AI.

Like any implementation of new tools and technology, however, this does require some measure of strategy and forethought. Even the smallest of firms needs a time-bound strategic plan executed with testing and learning across the firm.

Part of that strategic planning process will include identifying pain points and challenges in the current way of doing things. One area that may be low-hanging fruit for many smaller firms is in marketing and business development—simple blog posts and website creation can be facilitated more easily with Gen AI, for example—as well as other areas where nonlegal administrative work takes too much time and resources.

An April 2023 study by Thomson Reuters provides a road map. In general, the survey found that while law firm lawyers are generally open to using Gen AI in their work, there is considerable skepticism about leveraging AI in core legal work.

However, almost three-fourths (72 percent) of respondents said they felt that Gen AI should be applied to nonlegal work within a firm—a much higher percentage than those who said they felt it should be applied to legal work within the firm, 21 percentage points higher, in fact. Such nonlegal work could include basic question-and-answer services or other administrative tasks.

If a small law firm is looking for places to get started with Gen AI, below are examples of how a strategic approach can bring quick yet real transformation to both the business and practice of law within the firm.

Turning Administrative Tasks into Strategic Advantage

Efficient deployment of software to enhance the administrative side of running a law firm can shift the discussion from efficiency to strategic advantage. Gen AI–based tools can turn back-office tasks into vehicles for additional strategic insight, better client relations, and, ultimately, higher revenues.

Some key first steps that firm leaders could take include:

  • Reviewing goals, processes, and tools for client communications. Are the firm’s teams able to produce timely, accurate, and engaging client communications? Could its lawyers sometimes be better communicators? Gen AI will significantly impact the time and effort required to generate first drafts of communications. Think of this as an opportunity to revisit the firm’s goals and strategies for better client communications and to leverage the expertise of its professionals that is currently locked away in internal documents and work product.
  • Finding new ways to provide more responsive client service. Gen AI is behind many products (such as chatbots) that offer organizations new ways to provide speedy responses to clients about their matters and billing and take some of the friction out of routine client inquiries.
  • Assessing markets and identifying business opportunities. AI also has become essential for transactional lawyers by enabling them to assess prevailing market terms while advising clients. Those same techniques can be used to understand broader market trends and identify market opportunities by tracking the direction in which the market is moving.

Accelerating and Enhancing the Quality of Legal Work

As lawyers build familiarity with Gen AI through its application to administrative tasks, and as the tools continue to evolve, the stage will be set for the application of Gen AI beyond the business of law and into the practice of law. Indeed, Gen AI has the potential to transform the substantive legal work at the heart of a law firm’s value to clients, with a wide range of potential applications and advantages, including:

  • Legal research: Keep up with the dramatic improvements that Gen AI is bringing to legal research tools. AI has been embedded in legal research tools for years, but a new generation of AI capabilities will dramatically alter the research experience for lawyers. Central to those changes is the ability to ask questions in conversational dialogue with research services and arrive at synthesized answers rather than just lists of relevant documents. Staying on top of the latest features of legal research platforms will provide a strategic advantage for small law firms against competitors of all sizes, allowing solo and smaller firms to meaningfully level the playing field.
  • Drafting: Integrate Gen AI tools across the drafting process and leverage a firm’s work product. Gen AI systems can enhance the process of drafting, but they also provide an opportunity to increase the value of a firm’s own standards and precedents. AI-based drafting tools can automatically pull preferred document language from external content sources or a firm’s proprietary documents.
  • Document review: Make AI part of a firm’s document review processes. AI has proven to be an effective way to support lawyers with first-pass analysis of documents such as contracts or leases. Gen AI features will make those processes more like conversational dialogue with the documents and will spare lawyers from the more routine parts of the job so they can focus on analysis and client consultations.
  • Workflow: Leverage integrations among these tools to achieve better quality of service and productivity. Gen AI will weave together the research, knowledge management, and drafting processes that are now separate processes that require lawyers to shift in and out of different tools. Firms can benefit by examining and reworking their internal workflows to take advantage of those shifts and by changing processes or changing who does what work.

Moving Boldly Toward an AI Future

There is no reason for small law firms to be intimidated by AI. None of these innovations are out of the reach of the typical small firm, and these firms often have the advantage of being able to redeploy resources and change direction more quickly than their larger counterparts. Being nimble requires discipline, however, and all law firms need to take a strategic approach.

As we discussed earlier in this series, AI has already made many important impacts on how lawyers do their work. Gen AI will add important components to the mix, not the least of which is added capacity for lawyers and the potential to increase the appearance of professionalism in the eyes of clients. This new generation of Gen AI tools will draw on data, technology, and expertise to produce quality results, and lawyers in small law firms are just as well positioned as their larger law firm counterparts to add their own unique domain expertise to that equation.

The leaders at larger law firms that are experimenting with Gen AI have often spoken about how their first forays into this new world of AI tech will focus on internal tasks, looking to experiment and iterate out of view of the client while seeking to develop levels of expertise that can then be leveraged to the client’s advantage. Small law firms can undertake the exact same process and, in fact, may even beat their larger competitors to meaningful results thanks to their agility and already simpler processes.

No one knows for sure what the future of Gen AI will look like. However, for small law firm leaders who are willing to take bold but intelligent steps, a bright future may come into focus quickly.

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Mark Haddad

Thomson Reuters

Mark Haddad has spent the last 17 years of his career at Thomson Reuters and currently serves as the general manager of the Small Law Firm business for Thomson Reuters. Prior to his current role, Haddad led the Government Sales and Client Management Channel and Corporate Segment businesses. Haddad began his career as an associate at Oppenheimer Wolff & Donnelly (now Fox Rothschild), specializing in mergers and acquisitions and public securities work.

This article originally appeared in Thomson Reuters Institute. © 2024 by Thomson Reuters. Thomson Reuters is a Sponsor of the GPSolo Division, and this article appears pursuant to the Division’s agreement with them. This article is not an endorsement by the ABA or the Division of any Thomson Reuters product or service.

Published in GPSolo eReport, Volume 13, Number 6, January 2024. © 2024 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association or the Solo, Small Firm and General Practice Division.