New Revenue Streams: Transform unprofitable practices into thriving businesses

By Geoffrey D. Ivnik, Esq. | Director of U.S. Large Markets, LexisNexis

Law firm leaders perceive that generative artificial intelligence (Gen AI) technology is going to have a dramatic impact on how efficiently lawyers are able to complete work assignments for clients. The top priorities for law firms using AI-powered tech are all related to efficiency, according to the 2024 LexisNexis Investing in Legal Innovation Survey:

• Legal research (57%)
• Summarizing documents (53%)
• Drafting documents (38%)

 These anticipated gains in efficiency have the potential to benefit clients who will receive legal counsel faster, as well as law firms who may be able to expand into new practice areas or even rehabilitate certain practices that have been struggling.

Transform pressured practice areas

The ability to practice more efficiently has law firms eyeing Gen AI’s potential to support their business growth opportunities, according to the new report, Gen AI in Law: Unlocking New Revenues.

A quarter of Am Law 200 firm leaders say using Gen AI for business development reports is a top priority, with 21% saying they want to use Gen AI for real-time comparisons of law across different jurisdictions and connecting AI to organizational data.

“I expect that we’ll see a focus on new lines of business and on advisory services that are proactive, rather than reactive,” says Jeff Pfeifer, chief product officer at LexisNexis.

Gen AI could also help practice areas where margins are under pressure to become more profitable through repeatable process improvements.

“We hear this consistently among the firms that we’re speaking with: they’re looking for ways technologies can make a material improvement in work quality and work efficiency,” adds Pfeifer. “Doing so makes those lines of business more attractive from a margin perspective.”

For example, legal professionals who use Gen AI tools and services from LexisNexis typically free up seven to 11 hours per week, which Pfeifer notes can be used to either follow-up more rapidly on their next tasks or to expand services for other clients.

Clients expecting higher-value work

According to the Gen AI in Law: Unlocking New Revenues report, in-house teams also expect to see Gen AI tools free up their outside lawyers’ time so they can focus on higher value work.

“We don’t look at AI or Gen AI as being replacements to attorneys, but rather tools that augment what those attorneys are able to do with their own time,” says Christy Jo Gedney, senior manager at Liberty Mutual Insurance. “We want our attorneys, whether they’re in-house or outside counsel, to be practicing at the top of their licenses. We want them spending their time doing the things that are impactful, such as building relationships or prepping for trial. Using Gen AI tools will help give them the capacity to spend their time on more impactful matters.”

For example, McGuireWoods is starting to see notable efficiency gains through adopting Gen AI for M&A due diligence by reviewing hundreds of contracts much faster than would be possible with a team of humans.

“The ability to use AI to surgically go into each one of those contracts and extract the information that you need and organize it into a spreadsheet as the first step of diligence can be a huge time saver,” says Peter Geovanes, chief innovation and AI officer at McGuireWoods.

REPORT: Gen AI in Law: Unlocking New Revenues

We interviewed a variety of AI leaders from the legal profession to explore how law firms and corporations that embrace Legal AI can generate new revenues through the use of this technology. In addition to the section of the report we unpacked today, which explores how to transform unprofitable practice areas into thriving businesses, other sections of the report include:

• An introduction to your new business development tool;
• Adapting to changing client mindsets about how to assess the value of legal work;
• How to seize new opportunities with the right skills in place; and
• Why law firms should start business innovation now to maximize success.

Read the full report now: Gen AI in Law: Unlocking New Revenues.