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| Steven Lerner covers legal technology for Law360 Pulse |
Over 4,000 legal industry professionals attended the International Legal Technology Association Conference, or ILTACON, last month in Nashville to discover the latest trends and innovations for law firms. AI once again dominated discussions at ILTACON, but those talks have evolved into addressing the growing barriers to adoption for law firms that invest in AI technology.
From varying adoption rates to client reactions to AI tools, law firms face a complex landscape.
I heard from several law firm leaders at ILTACON about what I consider to be the next phase of the AI revolution and the challenges that come with it. Most of the concern deals with generative AI, which is capable of creating content. The identities of the firms are not disclosed in this article to protect their confidentiality.
First, there's a significant issue with usage discrepancy. A boutique law firm recently bought licenses for a legal AI assistant for half of its attorneys, but only about a third of those licenses are being utilized, according to a tech leader at the firm.
While it is common to have some idle software licenses, this situation is particularly concerning because generative AI tools are expensive, leading to substantial spending on software that's not fully used.
This indicates potential barriers to adoption even when firms invest in AI technology. It also highlights the critical role of change management and the need for information technology staff to align their goals with the needs of attorneys.
Beyond usage discrepancies, another major challenge is addressing client concerns about AI, which range from issues such as notifications to outright bans on the technology.
This stands in contrast to what I heard last year at ILTACON, when law firm IT leaders told me that most clients were not sharing their thoughts on AI. Legal departments were so silent on the issue that I penned a column last year imploring them to talk to their outside counsel about AI.
Well, legal departments got my message last year because now they are addressing the use of AI in their outside counsel guidelines, or OCGs.
A representative from a BigLaw firm told me at ILTACON that some OCGs are now requesting a heads-up before the firm can use AI on the legal department's matters. This indicates growing awareness and potential concerns about AI use in legal work.
A Mid-Law firm said that it is seeing some OCGs approve the use of AI to increase efficiency while other OCGs are prohibiting it, reflecting the varying comfort levels different clients have with AI in legal services.
Even smaller firms are facing client pushback on AI adoption. According to a boutique law firm, some clients in the financial sector are asking the firm in their OCGs not to use AI on their matters due to data privacy and confidentiality concerns. A small law firm IT leader at ILTACON also said one client told the firm not to use AI.
Some of the resistance from clients stems from risk avoidance, which is why firms need to address those risks, according to Brian Kennel, founder and CEO of PerformLaw.
"Clients want control over how law firms deploy AI," Kennel wrote to Law360 Pulse. "I understand the desire for a law firm to get ahead of the curve for competitive advantage, but if we're being honest, most of us don't fully understand the risks."
Kennel said he recently told an insurer to create a task force with its in-house team and outside law firms to develop acceptable tools, processes, policies and protocols for rolling out AI over the next few years.
"We need to acknowledge that clients expressing concerns over the use of AI are often reacting out of fear — fear of the unknown and fear for the safety of their data," Lourdes M. Fuentes, founder of the law firm management consulting firm Karta Legal, wrote to Law360 Pulse.
Fuentes said law firms should understand client concerns and build trust with them. This can be done by offering CLE training for in-house counsel on AI, sharing comprehensive AI policies with clients, reassuring clients that human oversight will be included with the AI tool and highlighting compliance with ethical standards.
"Anticipate pushback and prepare your team with responses aligned with your firm's AI strategy," Fuentes said. "Equip your attorneys with talking points to effectively address client objections."
It was good to see the next phase of AI adoption at ILTACON. Challenges aside, I can report most law firms are making positive progress with AI.
--Editing by Robert Rudinger.
Technically Speaking is a column by Steven Lerner. The opinions expressed are those of the author and do not necessarily reflect the views of Portfolio Media Inc. or any of its respective affiliates.
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