there’s work in process for AI promise to flourish in finance

The annual Briefing/HSBC UK law firm strategy and investment research, which we published in early October 2024, found that almost one in 10 (8%) of C-suite law firm strategic leaders don’t expect their place to be using generative artificial intelligence (genAI) at all heading into 2025.

Even a minority like this saying so came as rather a surprise to us — particularly given 57% at firms across the annual-revenue bandings (starting at approx £18m up) anticipate this technology being harnessed in some way to produce their work for clients at some point within the next 12 months. The ‘not here, not yet’ response was, admittedly, a bit more likely to come from somebody in one of the smaller firms in the sample — where the idea of a ‘race to be second’ seems to be a thing — but they certainly weren’t the only sceptics out there (or perhaps, to be fair, the more cautious/wary of the cost before business models have been adapted accordingly).

The top perceived obstacles to going any further, faster, with genAI, did indeed centre on the impact on risk and resource — accuracy/quality concerns (51%), the bandwidth for exploration/testing out the use cases and dependencies (34%) and security concerns (29%).

And, in addition to supporting with more efficient legal research and workflows — and the creation/delivery of the work itself — the areas where  most leaders expected the firm to be making use in some form were knowledge management (73%) and marketing/business development (64%).

By contrast, just over a third anticipated the world of their law firm finance function being impacted before summer 2025.

This reactivated my thinking about one of our regular Briefing supper club roundtables that took place just a couple of months ago (co-hosted with welcome input from experts working for Fulcrum GT).

A conversation by no means limited to navigating the AI risk/reward maze, one point raised was that firms might benefit from starting “smaller” with AI to build up appreciation of the business case — and one such win identified was the far from minor matter of accelerating time to payment (indeed, it’s safe to say a pretty major challenge, according to that Briefing/HSBC UK research this year). Another was onboarding clients more effectively — that is to say, accurately — with less scope for human error creep into the process.

There was a decidedly upbeat sense at the table of genAI moving forward as a likely transformer, not only of business services/back-room efficiency, but also this professional support’s standing as a true driving force of positive progress — continuous process improvement.

But there’s another side to this coin — for all that the fresh enthusiasm to bring AI into play here has helped to open lots of other conversations across firms about opportunities with (often existing, potentially overlooked) technology, there’s another type of conversation coming up more regularly too. What must firms really commit to changing/fixing in their respective setups first? Perhaps billing ‘simply’ needs centralising before pushing the process further — certainly, the matter of achieving more process consistency was something several raised as a significant issue. Without starting there, rather than the choice of tech/tool, your risk is witnessing a proliferation (to put it politely) of ‘mini’ process flows around each introduction and an unsatisfactorily fragmented overall experience.

Just look at some of firms’ other top challenges at the table to see where this could go — some have grown, even organically, very rapidly indeed; with sprawling divisions, reporting and service lines (including offerings for their clients beyond the law to integrate as necessary), and new strategic plans, or even visions, only just setting sail. That sort of progress and ambition is great, but just won’t be sustainable without the supporting foundations of manageable and measurable process. Another item on the list was effectively rewarding people’s behaviours in new ways — their ability or willingness to collaborate, for example — backed up by the data that can reliably describe the extent and value of contribution.

Also rumbling around are the focus on joined-up decision-making to deliver on aspects of ESG; acting to embed a culture of cybersecurity (now firms’ top-ranked organisational challenge); and not forgetting of course that a poor/fragmented experience when it comes to technology isn’t only bad for efficiency and client service/touchpoints — there’s also it’s potential impact on the morale, effective management and progression of in-demand, talented, and perhaps increasingly impatient, ambitious people.

A new Briefing report into the state of law firm process at top UK law firms — both internal and client-focused, and the links with wider strategy — will be published in February 2025.

All findings, analysis and context with multiple leadership interviews from this year’s Briefing/HSBC UK law firm and strategy investment research (2024-2025) is available here.

Read more about how Fulcrum GT views drivers for law firm process improvement in the current legal market and business climate in the September 2024 edition.