New Revenue Streams: Getting the right skills in place is essential

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

The rising adoption of generative artificial intelligence (Gen AI) technology in the legal profession is having an impact on all areas of law firm operations, including staffing decisions.

Nearly four in 10 (38%) of senior Am Law 200 lawyers say their firms are planning to hire technologists such as data scientists or engineers to support their Gen AI programs, according to the 2024 LexisNexis Investing in Legal Innovation Survey.

According to the new report Gen AI in Law: Unlocking New Revenues, law firms are quickly discovering the importance of developing the right skills to capitalize on the potential of Gen AI to take advantage of new revenue opportunities.

Seize the opportunity to develop necessary skillsets

Adopting Legal AI technology, Gen AI tools trained for the legal profession, means that lawyers will need to be proficient in “prompting” the tools so they can interact with the technology and use it effectively. While lawyers may not need to become AI technologists, firms should increasingly expect lawyers to have some degree of understanding of how to use these tools when they are making new hires, according to the new report, Gen AI in Law: Unlocking New Revenues.

In fact, another key reason for firms to accelerate their Gen AI programs is to help them attract the best new law school graduates.

“What we’ve seen when hiring new associates out of law school is that during the recruitment process they’re asking questions about legal tech and legal AI, and if your firm is not using these tools, you’re viewed as old-fashioned, stodgy, and maybe a place that the best candidates don’t want to work,” says Peter Geovanes, chief innovation and AI officer at McGuireWoods.

Industry leaders are also quick to point out that lawyers are in the business of providing legal counsel, not in the IT business, and other skillsets will need to be developed internally for Legal AI tools to flourish.

“Firms will be looking for people who will be able to integrate the tools into their day-to-day activities,” says Tod Cohen, a partner at Steptoe. “Five years ago, we wouldn’t have guessed that Zoom would be used as much. Yes, there was a pandemic. But if you don’t use Zoom or you don’t use any type of video conferencing, you’re not really doing any work in most instances, so it’s really just about trying to get Gen AI integrated without any effort by the attorneys.”

Law firms may also increasingly lean on non-fee earning lawyers or other support staff, such as knowledge management attorneys or librarians, to advance their AI use.

“There is a need for specialist searching and research that the tools certainly will enhance, so there will be people using Gen AI tools to assist in research and librarians are going to have a large role in this,” says Cohen.

Mitigating risk from Gen AI

As with all new technologies, there are a variety of potential risks that law firms need to be aware of and mitigate with respect to Gen AI tools. According to the Gen AI in Law: Unlocking New Revenues report, a good place to start is by reviewing professional liability insurance to determine whether the carrier will include AI-assisted work in their coverage.

“We have seen examples in the U.S. of certain insurance carriers making proactive statements about what’s covered and not covered, but the field of insurance is still evolving as it learns and understands what the key risks are,” says Jeff Pfeifer, chief product officer at LexisNexis. “While we have seen a few insurance companies suggest that AI-based product work is not covered in malpractice insurance, it is by far the minority position.”

Aside from professional liability questions, there are general risk mitigation strategies that firms should put in place to safeguard AI use. One key guideline is to ensure client data is not being shared by the AI system.

For example, to help firms mitigate risk and share the precautions with their clients, LexisNexis has made data security and privacy for customers a priority by opting out of certain Microsoft AI monitoring features to ensure OpenAI cannot access or retain confidential customer data.

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 law firms can seize new opportunities with the right skills in place, 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;
• The transformation of unprofitable practices into thriving businesses; and
• Why law firms should start business innovation now to maximize success.

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