Strategies+: A Blog for Legal Marketers

AI: The Next Big Thing Is Already Here

Posted by Erin Hichman and Patrick Fuller on Aug 21, 2018 1:15:04 PM


Learn from early adopters both in and outside the legal industry.

This article aligns with the focus of the July/August issue of Strategies magazine: technology.

Over the past two years, no subject has engulfed the legal profession quite like artificial intelligence (AI). The use of AI has been a hot topic at events like CLOC and ILTA and was LMA’s “Next Big Thing” in 2017, with more than 25 presentations given at various LMA local groups. 

According to Tracxn Technologies, which operates a platform that provides information for startups in venture capital, private equity and corporate development, there has been more than $450 million in financing spread across more than 130 rounds for “LegalTech” over the past two years.

However, a recent Altman Weil report showed that a third of more than 800 managing partners surveyed expressed low confidence in their firm’s ability to keep pace with challenges in the legal market, with only 6 percent indicating high confidence. This dovetails a 2017 Altman Weil survey, which showed that more than half of the law firms surveyed were actively involved in innovation projects, but only 4 percent of legal department leaders said they had seen “a lot” of innovation from law firms. 

These figures are staggering and important to note, considering the growing options and alternatives the legal services buyer has — including innovative and tech-savvy alternative legal service providers (ALSPs) and the legal department itself, which is increasing its own adoption of technologies and tools. For both ALSPs and the legal department, AI is becoming a critical tool — and differentiator. AI reduces the time it takes to do time-consuming, repetitive knowledge tasks (e.g., document review, eDiscovery, legal research) and does them more accurately. AI is also a tool for legal advice and better predicts outcomes. This is crucial for legal marketers and law firm leaders to know and understand when looking for ways to break away from law firm competitors and compete with ALSPs and the legal department.

Despite the publicity AI is receiving, it is important to remember that it’s still in its infancy in terms of being used to its full potential, particularly in the legal industry. The position law firms are in — lagging in technology adoption (compared with other industries) and the explosion of AI investment occurring around it — can be viewed as both a disadvantage and an advantage. It can be a negative aspect because the way the world works is changing, yet the legal industry is slow and sometimes resistant to change. However, this also has a positive side because there is a huge opportunity to learn from earlier AI adoption leaders regarding what has worked and what hasn’t and apply their wisdom thoughtfully to their law firm.

For law firm leaders, it will mostly be an uphill battle to invest in AI. Below are five key takeaways to help keep your firm on top with technology:

  1. Be Smart to Market, Not First to Market

    “Artificial intelligence” is a broad, all-encompassing term that includes numerous functions and methodologies. The common thread is increased efficiency. This is important to note because, historically, most lawyer compensation models rewarded inefficiency. Further, the fee arrangement, especially if it is tied to hourly rates (as most still are), may also influence the lawyer’s use of AI. Additionally, most AI platforms will require lawyer development or training, typically using non-billable hours, so how firms credit non-billable business development and innovation time should also be a consideration.

    One of the most important skills for any professional is the ability to sell ideas, concepts and strategy internally, and for legal marketers, this is especially critical. The legal profession is built almost entirely on precedent and does not change quickly. If the lawyers are not hearing directly from their clients to change, it’s going to be a tough internal sale.

    This is where a lesson can be learned from Apple. The iPod was not the first mp3 player to market when it launched in late 2001. Apple’s success blended an innovative — yet not first to market — design with a legal digital music distribution platform that connected their users to legal, downloadable content. Apple was also not the first company to market with a mobile phone nor were they the first to market with tablets. You might think Apple was first across all these categories if you don’t follow the tech-hardware industry closely. That’s because Apple watched and learned from the “first-to-market” companies — and was “smart to market.” They surveyed the market, analyzed the demand, found areas where they could improve on existing products and services and then dominated the market.

    With all the challenges law firms face with technology adoption and use, especially AI, legal marketers and leaders should be driving a “smart-to-market” approach with their firms on the use of AI, as opposed to a “first-to-market” approach.

  2. Power Cross-Selling and Develop Alternative Revenue Streams

    There are a number of law firms that have built client-facing, lawyer-powered AI applications that are sold on a subscription basis to their clients. The benefits of this can have a large impact, including pricing consistency and predictability for the clients, and a scalable, alternative revenue stream for the law firm. Similar professions, such as consulting and accounting, have also started productizing and monetizing their services with client-facing applications.

    The hidden indirect benefit, however, may be with cross-selling, which has been a challenge for law firms across many facets, including compensation, internal cost and personnel. Client-facing, self-serve applications that use the expertise of the lawyers but deliver immediate guidance on heavily rules-based areas of law (think compliance, regulatory, tax, etc.) have the potential to greatly reduce the need for on-site pitches led by multiple lawyers, the need to coordinate calendars and other obstacles typical of the current market. Instead, firms can take the software approach, using webinars and mass communication to create awareness and convey the benefits of the self-service application. For the lawyers, it often doesn’t require bringing another lawyer into the client relationship, but rather a piece of software that can serve as an entry into a new practice area with a client at a fraction of the normal cost and without the complications.

  3. Data Is a Tool

    We are in an unprecedented age of data-driven decision making, in part because of various AI methodologies that enable the rapid analysis of information. Legal uses large data sets in early case assessment for litigation and patentability assessments in seconds and legal research, to name a couple examples of law firm data usage. For marketers, data can often be used to justify saying “no” on initiatives that do not make financial or strategic sense for the firm.

    Many law firms have a formal go/no-go spreadsheet with calculations designed to assess whether or not to respond to RFPs or even pursue certain potential clients. We are not that far away from a world where RFPs can be uploaded and a go/no-go recommendation is presented from both internal and external data sources in seconds.

    Sentiment analysis is a more formal term for “opinion mining” and is a powerful use of AI and big data. It refers to the use of natural language processing, text analysis and related methodologies to analytically identify and assess the perspective of the client. This is a core use of AI for many corporate marketers and will soon be more prevalent in legal, especially as more buyers (and influencers) speak and write on the business of law. If a firm is able to understand why someone buys, it minimizes the need to teach lawyers how to sell their services.

  4. Marketing and Business Development Can Be Less Time Consuming

    Automated journalism has been around for a few years now, most notably with sporting event recaps and earnings call reports. It uses various AI methodologies and a highly structured format to create easily readable content. For law firms, this type of technology could be useful for producing client-facing content as well as business development follow-up and other various forms of client engagement, reducing non-billable human-hours required for these activities. Most importantly, it has the potential to eliminate activities such as business development follow up that many lawyers are simply not comfortable performing but are necessary for both the lawyers’ and firms’ success.

  5. Predict the Future With More Accuracy

    Predictive analytics are already here and being used in various aspects of legal, most notably in litigation, legislative practices and spend management. With the amount of data being generated in structured formats now, the legal profession is not far away from being able to use AI and large data sets to predict the following, among others:
  • Which clients have the most revenue and profitability upside
  • The win potential on business development pursuits
  • Which practices with existing clients offer the best cross-selling success opportunities

    The same strategies will also extend to lateral hiring. Last year, more than 5 percent of Am Law 200 partners changed firms with mixed results at best. Using predictive analytics to predict ROI from lateral hiring is a close reality — as is predicting successful mergers and acquisitions, which will be useful for all parties involved, and likely to increase the pace of law firm M&A in the short term.

The reality is that AI cannot be ignored.

Its benefits for law firms are wide-reaching; it can improve foundational legal work by reducing human hours spent on labor-intensive tasks, drive more informed and accurate decision-making, reduce costs, support talent and knowledge growth and sharing and enable improved customer relationships.

For law firm leaders, the question is not if they should invest in AI, but rather where should they start? Learn from early adopters both in and outside the legal industry to make smart AI investments.


Erin Hichman is a senior analyst with ALM Legal Intelligence covering legal technology and trends. She has extensive experience researching IT, technology and related services. Erin holds both a BS in Industrial Engineering and MS in Industrial Engineering with concentration in Integrated Technology Management from Cal Poly, SLO.



Patrick Fuller is the senior director of legal intelligence at ALM Intelligence. He is an accomplished executive with nearly 20 years of experience within the legal profession. He is a frequent author and lecturer who has logged more than 200 speaking and authorship credits within the legal profession over his career. Patrick is a Fellow in The College of Law Practice Management.

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