AI operations for success

A new year presents new beginnings. It also presents a new slate of challenges and risks to navigate and opportunities to uncover. As we survey the coming year, what items should law firms be alert to? And what are the crucial questions they need to be asking themselves that will help them emerge on the other side as a stronger, more capable and better positioned institution? We’ll take a closer look at three key areas: operationalising artificial intelligence (AI); addressing operational inefficiencies; and making better use of data – and explore what sort of questions firms should be thinking about to successfully mitigate the related risks, and unlock the opportunities they contain.

TIME TO OPERATIONALISE

Everyone’s been talking about AI, but the real challenge for firms is going to be how firms operationalise AI – how to actually embed it into everyday processes. In other words, how do you get your center of excellence and or your legal services team up and running in order to be able to operationalise AI? One thing is clear: it’s not good enough to have AI running in pockets anymore; that is to say, where there’s one due diligence project that you’re doing in your real estate department, then another due diligence piece that you’re doing in your corporate department – but it’s not a ‘firm-wide default’. The real benefits of AI will only start to materialise once it has been operationalised as ‘the way things are done’, rather than an option that various groups can dabble with.

But in order for it to be the default rather than something that select groups opt in to, there needs to be infrastructure that can support it. Questions firms should ask themselves include:
— What channels need to exist within the organisation?
— What information needs to flow from the client to the partner responsible for the matter, to the senior associate and associates performing the matter, all the way down to the persons actually training the AI models or to those using the AI system?
— How do firms get that entire machine operating so that they’re talking to one another and efficiently coordinating with each another? These questions help put a finer point on what we mean by ‘operationalising AI’. Firms should start by looking at the staffing for any AI project from end to end and being clear about what information is needed from whom, and given to whom, and at what stage in the process, in order to run a fully operational AI machine. Do you need somebody that’s going to look after the technology? Do you need someone that’s going to create the models? Do you need somebody else who’s going to maintain the models? Do you need someone who is going to project-manage the flow of information? As another part of operationalising AI, firms should track and monitor how many of their departments are actually using AI, using key performance indicators (KPIs) and statistics to measure progress. But we need to walk before we can run, so asking these questions should be the starting point for operationalising AI.

ROOM FOR IMPROVEMENT

Law firms are fanatically devoted to providing the highest level of service to their clients. This is a good thing. Because of that laser focus on delivering immediate return on investment (ROI) to the client, however, firms often don’t focus on improving their internal processes, which could make delivering that ROI easier.

Again, this requires the firm to ask itself some probing questions, for example:
— How long does it take to get the first draft of a document done?
— How many iterations does it take before the partner reviews it and gets it out to the client?
— How long does it take to find precedent material?
— How long does it take to train somebody to the point the firm trusts they are ‘up to scratch’ and can prepare and send documentation to the client? Firms rarely pause for introspection around these kind of process points. If you’re continuing to successfully deliver, there’s a tendency to think – why do I need to care about efficiencies? As long as the client is happy, the thinking goes, there’s no need to take a long, hard look at internal operational processes or how to make them more efficient. Success, ironically, is not a great catalyst for innovation. But sooner or later. the inefficiencies are going to slow a firm down, because there are inefficiencies within law firms. Choosing to focus on them requires a change in mindset, which is probably the hardest aspect, yet simultaneously, the most important. For too long, law has hidden behind the shield of ‘law is exceptional’. The challenge for firm leaders is going to be actually looking at their internal processes and making sure they’re doing them as efficiently as possible. Because that’s what other firms will be doing, and they will be happy to sweep aside less efficient firms and leave them in the dust.

BEING PROACTIVE WITH DATA

If focusing on inefficiencies is an opportunity, so too is making sense of all the data that firms have at their disposal. Law firms are the collectors of a wealth of information on their clients. This presents a real opportunity to take a data-driven approach to servicing those clients. But to do that, you need someone to take a real hard look at the data – and in order to do that, you need to hire data experts to collect all of the different data the firm has on the clients; amalgamate it; and make sense of it in a way that will then be beneficial to the clients. There are firms that act for numerous borrowers over and over, just as there are firms who act for various real estate developers over and over.

Given this pattern, some questions are necessary:

— What information do you know about that client; and about the agreements you negotiated for it?

— What information do you know about that client more holistically because you have different people in various teams looking at different aspects of the client (of course, recognising various boundaries)?

— If you had better information on that client, what work would that allow you to go after?

— What insights would you be able to give your client about the data that they have?

— Scanning the horizon for any upcoming regulatory change, what kind of strategic advice could you provide them, because you’ve already worked on their documents? That kind of proactive – rather than reactive – thinking is going to be the real driver for providing strategic advice and therefore becoming a true strategic partner for clients in future. It is vital that firms pause and take time to ask questions about the way they’re currently doing things. In doing so, firms will find the answers that will inform a path forward around operationalising AI, removing inefficiencies, and making better use of data – allowing them to take their firm to new levels over the coming year.