From curiosity to necessity: how AI is reshaping the legal industry

The legal industry is experiencing a quiet but powerful transformation, and artificial intelligence (AI) is at its heart. While we often see headlines about AI shrinking the legal services market or reshaping how law firms operate, it’s clear that many law firm leaders still feel uncertain about where to start. The recent Crespect Talks: Heads in the sand or Hands on the Future discussion with leading law firm management experts and innovators Aku Sorainen and Andrea Miskolczi, hosted by Karolina Šilingienė sheds light on how AI impacts law firms across Europe, offering key insights and practical advice for firms navigating this new frontier.

Here are the main takeaways from conversation, focusing on AI’s current role in the legal industry and where it is heading.

In the discussion, Aku Sorainen observed that law firms embrace AI for various reasons. Some are driven by a “fear of missing out” (FOMO), worried that they will fall behind the competition if they don’t adopt AI tools. Yet, many firms are genuinely curious and excited about AI’s potential to streamline their operations. Tools like Microsoft’s Copilot and Harvey are making waves, with firms actively experimenting to understand the practical use of such innovative tools.

For instance, AI is a natural next step for some firms that have already adopted document and process automation. In these cases, AI tools are not just about efficiency—they’re transforming how legal professionals engage with technology. Aku shared Sorainen’s case in the podcast: automating documents saved over 5,000 hours last year alone at his law firm. This kind of efficiency is a game-changer for firms handling large volumes of work. The capabilities that AI bring to this field appear very attractive to explore and save even more hours.

The podcast highlighted that while AI might help automate legal work, its application isn’t limited to drafting documents or offering legal opinions. Law firms now apply AI to business processes, marketing, and client development strategies. One example Andrea Miskolczi mentioned in the podcast was using AI for business intelligence, business development and marketing tasks. This shift allows law firms to save thousands of hours annually and provides a structured foundation to utilise and familiarise with AI tools to build on.

Andrea pointed out that while clients expect law firms to be technologically advanced, there isn’t a significant pressure — yet. However, this rapidly changes as clients use AI tools, particularly for drafting and internal processes. This means law firms must adapt quickly or risk falling behind. The discussion touched on how clients increasingly use AI to handle first drafts before sending them to lawyers for review, a trend that could reshape the lawyer-client dynamic.

Moreover, as clients use AI to streamline their operations, law firms must find ways to offer more value beyond what a machine can do. AI enables in-house legal teams to take on tasks they would have previously outsourced, forcing law firms to rethink their offerings.

One of the podcast’s most practical insights was the importance of having access to firm data. Law firms with robust document management systems and well-organised legal databases are best positioned to capitalise on AI’s potential. Without structured data, firms risk letting AI tools sift through vast, unorganised datasets, which can lead to poor results. The message was clear: law firms must focus on getting their data in order before diving headfirst into AI.

The benefits of AI are immediate for firms that already have structured data. Aku shared an innovative use case where their firm built an AI tool to help access information stored on internal quality management system. Now, instead of reading lengthy manuals, the firm’s lawyers can easily chat with a virtual bot and ask any operational questions, such as how to open a case, what are the house style rules or how to handle compliance checks. Because all the data was already structured as systemised guidelines and best practices, the AI tool offers reliable and accurate results—showing just how powerful AI can be when it has the proper foundation to work from.

With so many AI tools available, how can law firms prioritise where to begin? Andrea offered some great advice: start with the data you have. It’s also essential to involve people who are passionate about AI and provide them with the resources to experiment. Law firms should start small, piloting off-the-shelf AI tools and gradually scaling up based on the lessons learned.

One critical insight Andrea presented was the importance of leadership in driving AI adoption. Partners and senior leaders must be visible champions of these initiatives, encouraging their teams to experiment and explore. As noted, law firms that embrace AI and share success stories internally can overcome scepticism and drive broader adoption across the firm.

Finally, the podcast touched on an essential cultural shift law firms must make to encourage innovation. Traditional key performance indicators (KPIs), such as billable hours, don’t incentivise AI adoption or any innovation. The podcast guests suggested that firms need to rethink how they measure success, incorporating KPIs that reward innovative ways of working, efficient utilisation of billable hours, knowledge sharing, and the use of AI tools.

This cultural shift is crucial for firms serious about embracing AI. Aku shared that their firm had already been measuring partner performance based on data management and knowledge sharing for over a decade. This holistic approach has helped them foster a more data-centric culture, supporting AI innovation.

The legal industry’s journey with AI is just beginning. The discussion highlighted that while we’re far from realising AI’s full potential, law firms have never had a better time to get started. Firms with systemised data and a culture of innovation will lead the charge.

The takeaway is clear: start where you have the most data, support those passionate about AI, and approach the adoption process with patience and strategic thinking. Success in AI is not just about adopting the latest tools—it’s about reshaping how law firms operate in a world increasingly driven by technology.

• Start where you have the most data. AI works best when built on structured, high-quality data. Focus on improving your data management systems before diving into AI tools.
• Support enthusiasm. Empower individuals passionate about AI to lead pilot projects and share success stories.
• Focus on long-term strategy. AI adoption is a marathon, not a sprint. Be patient, manage expectations, and consider how AI can transform your firm long-term.
• Align incentives with innovation: review your firm’s KPIs to ensure they promote efficiency and technology adoption rather than just focusing on billable hours.