By Geoffrey D. Ivnik, Esq. | Director Large Markets, LexisNexis
Nearly all large law firms expect their investment in Generative Artificial Intelligence (Gen AI) technologies to increase over the course of the next five years, but a potential gap may be emerging between the very largest firms and their peers.
Forty-three percent (43%) of the 200 largest law firms (Am Law 200) have a dedicated budget for investing in Gen AI tools this year, compared to just 19% of non-Am Law 200 firms with 50 or more attorneys.
These results were derived from our 2024 Investing in Legal Innovation Survey: The Rise of Gen AI at Top Firms & Corporations. In January of 2024, LexisNexis surveyed 216 managing partners and other senior leaders at large law firms, as well as 50 executives in corporate legal departments at Fortune 1000 companies, to better understand the business impact of Gen AI technology on the legal industry.
A key theme that emerged from the survey responses was that the largest firms may be capitalizing on their deeper resources to make more aggressive investments in Gen AI tools in the short term.
Most striking was the finding that 53% of Am Law 200 firms have already purchased “Legal AI” tools (Gen AI developed specifically for the legal industry), compared to just 20% of non-Am Law 200 firms with 50 or more attorneys. Moreover, 45% of Am Law 200 firms are using Gen AI now for legal matters, compared to 22% of other large firms.
Other findings that could portend an emerging gap between the largest firms and their peers included:
- 54% of Am Law 200 firms are currently exploring new lines of business or new billable opportunities due to Gen AI, compared with 38% of other large firms.
- 34% of Am Law 200 firms foresee their firm’s investment “increasing significantly” in the short term, while 20% of leaders at other large firms shared the same forecast; and
- 38% of Am Law 200 firms anticipate increased hiring of technologists to support AI initiatives in 2024, compared to just 14% of other large firms.
The picture that emerges is that Gen AI is becoming table stakes for large law firms, with the largest firms appearing to move more aggressively with their internal investments in this breakthrough technology. This is an important possible gap to monitor in the years ahead.
However, in these early days of market adoption, it is still conceivable that non-Am Law 200 firms will accelerate their investments in Gen AI as a way to create substantial new efficiencies and boost lawyer productivity.
“As generative artificial intelligence develops and big firms try it out, industry observers say that mid-law firms are also experimenting with the technology and that it will likely prove useful for midsize, mid market and regional firms as the tech matures,” reported Law360 Pulse. “Mid-law firms are interested in the technology and it’s possible it might provide to be even easier to leverage for smaller firms than for their BigLaw cousins.”
Download a free report of our 2024 Investing in Legal Innovation Survey: The Rise of Gen AI at Top Firms and Corporations.
