Legal Team
As legal departments explore the potential of generative AI, most are in early discussions with their external law firms, expecting tangible benefits in the near future. However, while 76% anticipate seeing these benefits in the next 2-3 years, only a small percentage have experienced any direct advantages from AI today. There is a gap between expectations and the current reality of AI's impact on legal services, with both sides needing to align on its transformative potential.
Source: DeloitteLegal
Generative AI is becoming a critical asset for forward-thinking law firms and legal service providers, serving as a tool for achieving strategic and competitive advantages. Those who proactively integrate AI into their practices can streamline operations, enhance client experiences, and increase efficiency. In contrast, firms that rely on traditional labor-intensive models or fail to adapt will likely struggle in an increasingly competitive market. Notably, legal departments are cautious, often questioning whether law firms will genuinely commit to this technology and pass on efficiency benefits to their clients, highlighting a need for transparency and active engagement.
A majority of legal departments see the potential quantitative and qualitative benefits of Generative AI integration. For example, 73% of respondents expect a reduction in costs, while 70% anticipate faster project delivery from law firms using AI. These efficiencies, when properly implemented, should ideally lead to lower billing rates for clients under an hourly model. Additionally, more than half (54%) foresee enhanced data analysis and insights, and 51% expect an improved quality of legal services. This presents an opportunity for law firms to leverage AI for delivering data-driven insights, customised services, and more innovative pricing structures.
However, only a small percentage (3%) of legal departments have reported experiencing direct benefits from their external legal service providers' use of Generative AI. To bridge this gap, legal departments are encouraged to incorporate AI-related criteria into their selection processes, challenging their external providers to demonstrate tangible benefits. This means not just asking if a law firm uses AI but seeking proof of how it translates into cost savings, improved service quality, and actionable insights. The firms that can meet these expectations will position themselves as trusted partners in the evolving legal landscape, while those who lag behind risk being left behind in a rapidly changing market.
Read more: DeloitteLegal