Happy Anniversary ChatGPT! Leveraging Generative Artificial Intelligence in Your Law Firm Practice One Year into this Disruptive Technology Phenomenon

Managing partners and C-suite leaders might find themselves in a dilemma, caught between lawyers seeking the latest AI tools to enhance their practices and the need to manage expenses. The abundance of information in AI solutions can be overwhelming, leaving law firm management unsure about how to begin harnessing the potential of this disruptive technology.

To help navigate this unfamiliar landscape, here are 10 tips and key takeaways from the past year:

1. Adopt a long-term perspective. If you haven't explored AI for your practice yet, don't worry, you're not falling behind. GenAI is overwhelmingly popular right now, but it's only one dimension of the AI puzzle; AI will also continue to impact society in other forms. The race to integrate AI isn't a sprint; it's a marathon. The rate of change will continue to accelerate, and AI tools, with emphasis on the plural, will undergo significant transformations in the next 18-24 months.
2. Educate yourself and stay informed about AI developments. You need to have a foundational understanding of this technology for several reasons, including meeting professional ethical responsibilities and providing meaningful advice to your clients regarding the impact of AI in their respective industries. You can stay updated by setting notifications for AI-related news in the legal and business publications you regularly read, and also consider including sources like the website for the American Bar Association's Task Force on Law and Artificial Intelligence:
3. Review your contracts with current service providers. The initial impact of AI will likely be felt through enhancements to the software you use every day. You can expect to see AI accelerating administrative tasks in the near term across an array of solutions you engage. For example, Microsoft CoPilot will soon introduce changes to various Microsoft Suite tools, starting with updates arriving this month. Similarly, Westlaw, LEXIS, and other research platforms will be incorporating new GenAI features over the next year. This means you should prepare for the possible need to negotiate new pricing when your contracts come up for renewal. Consider factors such as avoiding long-term commitments to specific GenAI technologies (as suggested in Tip #1), keeping an eye out for restrictive indemnification clauses related to data breaches and confidentiality, and negotiating the option to terminate agreements with GenAI startups if their product is acquired by another entity.
4. Designate a primary point of contact on AI issues. Form an AI committee or task an individual with keeping up to date on AI practice technology. The composition of a committee may vary depending on the size of your firm but could include individuals from Innovation, IT, practice groups, HR, and Marketing. The designated group can lead the exploration of new AI technologies and ensure that the entire firm remains updated. The key message here is that AI's potential impact extends across multiple functions within the firm, so it's crucial for everyone to grasp how the adoption of a specific tool could influence various areas.
5. Assess your firm's readiness for AI adoption. Given that the practice of law relies heavily on knowledge, many firms are interested in harnessing AI to optimize their work product. Start thinking about how you plan to utilize AI in the future and what preparations are necessary. This is particularly important when reviewing GenAI solutions. For example, suppose you're considering AI tools to generate contract templates based on past documents created by your firm. It's important to consider the location of this data. Is it centrally stored and structured in a manner that AI software can access and use effectively? Do you want AI to draw from all contracts in your document management system, or just specific ones? How will you determine which contracts are suitable? Embarking on certain AI initiatives is essentially a knowledge management endeavor. Organizing your knowledge resources now will pave the way for broader AI integration in the future.
6. Start small. You can't tackle everything at once. Focus on narrow applications. Begin with AI tools that streamline and expedite internal processes using data that is probably already well-structured and organized. For example, you might introduce improvements to your billing software that predict timekeeping narratives or automate other "back office" accounting tasks.
7. Consider how AI fits into your broader business strategy. There are currently no universal AI solutions to fit all needs. Thus, the AI tools you choose should be tailored to your specific practice. For example, if your work involves managing extensive contracts or portfolio litigation, your AI investment will differ from a firm specializing in complex intellectual property matters. By pinpointing your initial use case(s), you can streamline your search and control your initial GenAI technology spending.
8. Prepare for a rigorous AI vendor due diligence process. Early guidance from judicial standing orders and the American Bar Association indicates concerns about the impact of AI on the integrity of the judicial process, the need for explainability and transparency, and potential for bias and discrimination in AI outputs. Early regulation will likely focus on addressing these broad concerns, and you need to select vendors who understand the issues surrounding the use of AI in legal and judicial applications. ABA Resolution 112 (2019) has specific sample questions to ask AI technology vendors focused on these issues, as well as monitoring, accountability, controls, and oversight. Firms must understand how the AI tech in use is developed, implemented, maintained, and updated, so that attorneys or technologists can explain it to a judge or regulator if called upon to do so. As with any other third-party provider, you must understand the financial viability of the vendor and its insurance posture. The need to integrate new AI tools with existing applications like internal firm accounting software or document management systems is another important consideration to discuss with potential vendor partners.
9. Don't underestimate the importance of change management. By design, AI technology changes the way tasks are performed and how processes work. Like most people, lawyers and legal business service people may not readily embrace new concepts or welcome challenges to established practices. Anticipate some resistance, particularly because of the way AI has been portrayed as a threat to the legal profession and the traditional billable hour model. To ensure the success of your new AI tools, an intuitive interface is critical. Plan for how these new technologies will be introduced within the firm, what training will be needed and how it will be implemented, and what strategies can be employed to motivate and incentivize adoption.
10. Develop clear metrics to measure the value and effectiveness of your AI investment. As you think about potential AI applications, consider how you will measure success. For example, if you implement an AI contract tool, will you track performance in terms of productivity and time saved? How might you monetize the use of an AI tool or demonstrate the value of your innovation to clients? What metrics can you use as market differentiators? Ultimately, the purpose of AI is to enhance client service and thus add value to your practice like any other investment.

The integration of AI into your firm's practice can be a transformative journey. By adopting a strategic approach, firms can navigate this new terrain more smoothly and avoid some of the inevitable bumps in the road. As the legal technology landscape continues to evolve, staying ahead of the curve with AI can position your firm for success in an increasingly competitive and dynamic industry.