Despite this, few have made progress: just 9% are developing technology alongside GenAI providers, with 38% admitting they are yet to take any action.
As the pace of development accelerates, rapid adoption will become necessary. Some firms are embracing GenAI, with others putting plans in place. We expect adoption to ramp up as firms get to grips with its capabilities and the benefits it offers.
Initial analysis on the efficiency impact of these tools, for example, suggests a productivity saving of 15%-25% for a typical law firm. This will vary across grades, with junior lawyers potentially seeing up to 22% improvements given the nature of the work they undertake.
Firms need to act quickly to gain first mover advantage. In this year’s survey, the speed of technological change was recognised as a risk to growth in the medium term by 71% of respondents - up 37% from 2022.
Firms must overcome their concerns around GenAI if they are to unlock its transformative potential. And fast.
Understanding the challenges of GenAI
As with any new technology, adoption is likely to come at a cost. As a result, firms must consider how GenAI will impact operating models, affect pricing and work with existing systems before they take action.
People will also be a critical factor in the success of GenAI. Firms will need to engage their workforce and draw upon their domain expertise and human qualities such as ethics and judgement, to ensure safe and responsible adoption. But GenAI poses additional challenges for people functions, particularly in relation to skills, performance and culture.
To maximise the benefits and accelerate its use, firms must upskill employees to use GenAI more effectively. They will need to reprioritise certain skills and experience when recruiting talent, to ensure employees are equipped to work with the technology. This may fundamentally transform the type and volume of talent needed, leading to new talent pools and different reward structures.
How firms appraise the performance of their existing people will also be a key consideration. GenAI could bring significant changes across the board, from the shape of the workforce, to individual assessment and the use of billable hours as a key performance metric. Firms may need to give particular attention to more junior members as they plot a journey from the “as is” to the “to be” shape of the firm.
Adopting GenAI will also give rise to a cultural shift, requiring firms to think about the impact of technology on diversity and ethics. With our survey revealing that 61%-65% of trainee lawyers were female, and GenAI likely to have the greatest impact on junior grades, firms must be mindful of how technology may change workforce representation. They will also need to ensure care is taken around data handling, transparency and accountability to avoid bias and maintain impartiality and security.
Despite these considerations and challenges, the value and huge market opportunity that GenAI offers law firms, makes it a matter of ‘when’ and not ‘if’ the use of these tools is commonplace. New AI tools specific to legal services have already emerged, offering significant opportunities for firms. These include HarveyAI, a tool for contract analysis, due diligence, litigation, and regulatory compliance and ContractPodAI LeAh, a contract drafting and reviewing tool.
GenAI in action
PwC has established an exclusive global alliance with GenAI start-up HarveyAI. Built on OpenAi and ChatGPT technology, Harvey handles large volumes of data and complexity to deliver richer information and faster solutions, so individuals can focus on more valuable tasks. By combining our industry and functional expertise with this powerful technology, we’re able to create sophisticated foundation models to accelerate complex tasks and provide richer insights for tax, legal and HR.
Our work with Harvey enables us to test AI out on ourselves and to be at the forefront of refining this technology so that we can share our experiences with clients, highlighting the benefits but also helping them overcome potential risks and pitfalls, such as bias and AI hallucinations.
The need for decisive action
While apprehension around GenAI and uncertainty surrounding any transformation is understandable, the value of this technology far outweighs the challenges. Getting ahead of emerging technology is crucial. Firms that fail to act will be left behind.
“AI will not replace lawyers, but it may replace lawyers who don’t use AI.”
Sandeep Agrawal, Partner, Legal Technology and Alliances
Get in touch with a member of our team to find out how to unlock the transformative power of GenAI safely and responsibly.
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