In June, Legal IT Insider hosted a lunch in partnership with Litera, bringing together legal tech law firm leaders and legal operations heads to discuss how people are leveraging AI-generated time savings and, also, how they should answer RFP questions that ask “what AI are you using?” 

The Chatham House conversation surfaced some interesting observations, including from the CIO of one UK firm who observed that, with time saved by using AI tools, senior lawyers are being encouraged to engage in more client face-to-face time. While this is a simple observation it is significant. Firstly in that the firm is generating time savings, and secondly, that they are putting relationship building at the heart of it.  

Advertisement

If you were in any doubt that clients are bringing more work in house, this lunch would perhaps settle the debate, at least when it comes to the largest in-house teams. One legal operations head of a financial institution described in great detail how they are leveraging tech to undertake a significant chunk of work that would previously be done by law firms. They also suggested that clients are not yet seeing meaningful benefit from outside counsel from their use of AI and that law firms are not undertaking the major transformation required to reshape how work is delivered.  

A further legal operations head of a tech company said that they are requiring a 5% annual budget reduction from outside counsel.  

What is interesting – and brought us inevitably onto pricing – was the observation that in-house teams are not expecting law firms to absorb software costs, but they want then to price them in and to give budgetary certainty. Scoping is becoming more important than ever. 

The most beneficial client-firm AI direction seems to be when both sides are using the same tools, or at least when the firm provides access to outputs and shares some level of access with clients to support better collaboration. 

When it comes to RFPs, it is clear that sometimes questions are asked for security purposes, so clients can understand which models are being used and where their data is going, and sometimes the questions are focused on efficiency.  

Firms need to modernise their RFP approach, and maybe just a small point, listing all partners and their education risks being seen as old school, particularly when that information is readily available elsewhere.  

There were observations about the risks of AI generated requests and responses becoming longer and longer and including hallucinated material as we have seen elsewhere. It is beholden on both sides to keep things manageable, if not least for preserving all our sanity.  

One UK law firm innovation head said: “A key takeaway for me is that law firms need to be having transparent conversations with their clients now. They can’t follow normal patterns of waiting for perfection and a polished end product – they need to go on this journey together and be willing to have client needs as their primary focus.”