Around 79% of respondents to Clio's Legal Trends Report survey said that they've adopted AI in their practices to some extent. Of that group, a minority of 8% touted universal adoption of the technology, while 34% reported minimal adoption.
Legal professionals surveyed said they most often use generic, non-legal AI tools, though 33% also reported using legal research platforms, 18% take advantage of document drafting tools and 12% lean on AI for e-discovery purposes. Saving time and increasing efficiency are the driving forces of interest in AI for over half of the respondents.
Relatedly, 70% of legal clients surveyed said they either prefer or simply do not care whether a firm uses AI.
Clio's Legal Trends Report said it surveyed "tens of thousands" of its customers — including paid subscribers and service users within the U.S. — from data gathered through its practice management platform.
"The modern law firm is ripe for automation — nearly three-quarters of a law firm's hourly billable tasks are potentially exposed to automation by AI," the report said. "To that end, automation can offer firms the space to focus on the tasks that require a human touch — like high-level legal work, advocacy, and fostering client relationships — while maintaining a high level of service."
While the industry appears increasingly enthusiastic about automation, the report highlighted why some may be concerned with the trend.
In particular, Clio estimated that 74% of hourly work in the legal industry could be automated, which could effectively put at risk an average of $27,000 for attorneys who bill by the hour. Also, 81% of hourly billable work performance by administrative assistants has potential for automation, according to the report, while 57% of hourly work performed by lawyers has automation potential.
"Generative AI solutions like ChatGPT offer substantial opportunities for increased efficiency and automation," the report said. "For work that's billed by the hour, however, automation would reduce the time spent on individual cases, leaving firms less to bill for. While good for clients, this poses a challenge for law firms."
Billing hourly remains the most common way to compensate attorneys, but flat fee billing is growing more popular, according to Clio's survey. Flat fee work has increased 34% when compared to 2016 figures, according to the report, and the cases themselves are valued at more than 20% since then as well. Most clients at 71% want to pay a flat fee — and 51% more specifically would prefer paying for individual activities within their cases.
"While AI automation stands to reduce the value of hourly billable work, shifting to flat fee billing can help firms create more predictability and transparency in pricing for both firms and their clients," Clio said.
AI is most trusted in its capacity to generate marketing content, with an 87% approval from the surveyed legal professionals. A section of Clio's report involved hiring a third-party research company to test outreach through traditional means such as phone calls, emails and referrals. In all instances, more than half of the contacts failed to provide adequate customer information.
"While AI adoption will require many in legal to reconsider their roles within law firms and how they provide legal services, it also presents a unique opportunity to create a new and better vision for the practice of law," the report said.
Clio, also known as Themis Solutions Inc., hit a valuation of $3 billion after securing a $900 million Series F investment in July. According to data collected by Law360 Pulse, it is the largest legal tech investment since 2021. Clio subsequently added Amy Hedrick as vice president of product design in August as its first hire since closing the July investment.
Late last year, the company introduced a generative artificial intelligence product called Clio Duo, which the company said it plans to implement in all of its offerings, starting with its practice management tool Clio Manage. The company announced its official launch on Monday, along with its AI report.
In May, Clio published a report specifically on industry thoughts on artificial intelligence, with the results showing more willingness from solo and small law firms to adopt such technologies this year versus the longer-term, slower investment envisioned by some BigLaw insiders. The report also noted that clients look at AI and its use in legal situations with more optimism than lawyers.
--Editing by Nick Petruncio.
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