Large Law Firms in the UK Outpace Mid-Tier Firms in AI Adoption

Shieldbase

Sep 8, 2024

Thomson Reuters research reveals that the UK’s largest law firms are leading in AI adoption, with 75% of the Top 20 actively promoting AI usage. In contrast, only 45% of mid-tier firms (ranked 21-40) do the same. The study highlights widespread enthusiasm for AI among UK lawyers, with 79% expecting it to transform the legal profession. Key findings include a preference for third-party AI tools, venture investments in AI, and the appointment of senior AI leaders. However, concerns remain about the pace of adoption, as firms anticipate significant productivity gains from AI technology.

Recent research by Thomson Reuters reveals that the UK’s largest law firms are significantly ahead of their mid-tier counterparts in leveraging ‘game-changing’ AI technology.

According to the study, 75% of the Top 20 law firms in the UK are actively promoting their use of artificial intelligence (AI) as a key component of their services. This contrasts sharply with the 45% of firms ranked between 21 and 40 in the league table, indicating that larger firms are more advanced in both integrating and marketing AI technologies.

Widespread Enthusiasm for AI Among Lawyers

The Thomson Reuters 2024 Future of Professionals report highlights a growing enthusiasm for AI within the legal profession. A notable 79% of UK lawyers anticipate that AI will have a transformative impact on the industry. This optimism is driving a push towards AI adoption, particularly among the top-tier firms.

Key Findings on AI Adoption

Preference for Third-Party Solutions: While 35% of the Top 20 UK law firms have developed their own AI tools for internal use, the majority (65%) have opted for third-party AI-powered solutions.
Venture Investments in AI: About 20% of these leading firms have taken the next step by making venture capital-style investments in AI companies or establishing AI-focused incubators.
Leadership in AI Initiatives: Among the Top 20 UK firms, 35% have appointed a Head of AI to drive internal AI adoption, compared to 20% of firms in the 21-40 ranking.
Internal AI Transformation Teams: A dedicated internal team focused on digital transformation through AI and machine learning is present in 60% of the Top 20 firms, whereas only 30% of the mid-tier firms have such teams.

The Strategic Importance of AI in Law Firms

John Shatwell, Head of Legal Professionals, Europe at Thomson Reuters, remarked, “We anticipate that law firms will soon market their leadership in AI as prominently as they do their legal expertise. The legal industry has swiftly recognized AI's potential and is optimistic about its ability to enhance productivity and client service. For many firms, AI is becoming essential to maintaining a competitive edge and meeting client expectations.”

Challenges in AI Adoption

Despite the optimism, there are concerns about the pace of AI adoption within the legal industry. The report revealed that 29% of lawyers believe their firms are not moving quickly enough in adopting AI technologies. This hesitation could lead to both internal and external pressures on firms to accelerate their AI initiatives.

AI as a Catalyst for Productivity

Law firms are not just adopting AI for client-facing benefits; they also expect significant productivity gains. The Future of Professionals research indicates that AI tools could save lawyers up to 138 hours in their first year, allowing them to focus more on complex legal tasks by automating routine administrative work.

As AI continues to reshape the legal landscape, the gap between the top-tier and mid-tier firms in AI adoption may narrow. However, the current trends suggest that the largest firms are set to maintain their lead in harnessing AI’s potential.