Midsize law firms can leverage GenAI to enhance their digital presence, improve efficiency, and increase profitability without necessarily reducing staff, which frees up resources for higher value tasks and enhances performance and job satisfaction
Humans are the heart, soul, and orchestrators of the practice of law. Yet, as we consider the benefits of generative AI (GenAI), the question emerges: “Can a law firm achieve profits faster with fewer people?” While some may say yes, GenAI optimists imagine that law firms can instead leverage AI in concert with their existing teams to increase capacity and opportunities for profit.
While GenAI can automate many tasks, it doesn’t necessarily mean reducing headcount. This is especially relevant for Midsize law firms, many of which already face leverage challenges. GenAI can allow such firms to reallocate their human resources to higher-value tasks like complex problem-solving, client relationships, and strategic work that AI cannot replicate.
With GenAI handling routine tasks more efficiently, firms often find they have increased capacity without increasing staff, leading to growth in revenue without a proportional increase in costs.
Will GenAI mean fewer staff?
Many Midsize firms are justifiably wary of further reducing staff. Some firms already face significant challenges attracting and retaining top talent in a competitive legal market, making the prospect of downsizing even less appealing. For them, GenAI represents a powerful tool to enhance both performance and job satisfaction by alleviating tedious tasks. The ability to focus on the more stimulating and rewarding aspects of their work, in turn, makes the firm more attractive to ambitious legal professionals. Indeed, the top two areas in which legal professionals wanted AI to influence were improved work-life balance and more time spent on engaging judgment-based or expertise-driven work, according to Thomson Reuters Future of Professionals Report.
Moreover, human oversight remains essential. While GenAI can draft documents and conduct research, legal professionals are still needed to review, refine, and ensure the quality of AI-generated work. As Bruce Raymond, an experienced litigation practice leader at McGivney, Kluger, Clark & Intoccia, aptly puts it: “Our legal professionals use AI tools to enhance our work product and save time and money for our clients, but we always verify the facts and law.”
Many clients now expect firms to use AI to improve efficiency. And law firms have discovered that meeting this demand doesn’t necessarily mean reducing staff but rather enhancing current staff’s capabilities. In fact, corporate general counsel have expressed a desire to evolve their departments into value centers and become strategic leaders, according to the 2024 State of the Corporate Law Department report by the Thomson Reuters Institute. This desire for efficiency and strategic operation isn’t limited to in-house legal teams, the report shows, it also extends to GCs’ expectations of their law firm partners as well. Clients increasingly want to see the same commitment to leveraging technology for efficiency and cost-effectiveness that they seek on their in-house team reflected in the actions of their outside counsel.
Enhancing existing capabilities
Leveraging GenAI effectively starts with integrating the technology into current workflows — training teams to use AI-powered tools for tasks like document review, due diligence, and contract analysis, or to speed up case preparation. McGivney Kluger’s Raymond, a self-described optimist when it comes to AI in law, says that if law firm leaders “get this right, this is a growth opportunity,” adding that clients are becoming increasingly aware of the potential of AI. “As sure as death and taxes, they will not pay for manual review of 5,000 pages of medical records” the same as they did before this technology was available, he notes.
Enhancing the team’s capabilities with GenAI also better positions those Midsize firms that are looking to capture a larger market share and deliver superior service by targeting clients that might have historically been out of reach due to concerns about scale. This ability to punch above your weight is a key advantage for Midsize firms aiming to secure higher-value and more prestigious work that had been traditionally dominated by larger competitors.
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For example, Raymond describes his firm’s integration of vetted, secure, and closed-system AI tools which ensure data privacy and accuracy into its workflows, which allowed the firm to demonstrate to client its commitment to providing both exceptional results and cost-effectiveness.
This efficiency gain is evident across various practice areas. For example, in litigation, tasks like deposition review and summarization or complex medical records review, which previously demanded hours of lawyer time, can now be achieved up to 80% faster with GenAI, allowing for significant cost savings and freeing lawyers to focus on strategic case development, which translates into more billable hours that are less likely to fall victim to a write-down. Further, transactional attorneys and paralegals experience similar benefits. Instead of painstaking manual contract reviews, these tools can quickly analyze contracts for specific clauses, identify potential risks, and even compare documents against precedent or regulatory requirements — all completed in minutes, leading to quicker turnaround times for clients and more efficient use of billable hours.
Other ways GenAI can help Midsize law firms
There are a few additional considerations for Midsize law firms that are looking to position themselves for an AI future, including:
Developing new service offerings — GenAI opens doors to innovative services that were previously impractical or impossible. For example, some firms are offering AI-powered legal health check-ups for businesses, rapid regulatory compliance reviews, or predictive legal risk assessments. Firms might also develop automated contract management and alerting systems. These new services can create additional revenue streams without significantly increasing costs, positioning the firm as an innovative leader in the legal market.
Investing in human skills — Midsize law firm leaders shouldn’t lose sight of the uniquely human elements of their legal practice. Instead, they should invest in developing critical thinking and strategic planning skills among their team. By focusing on enhancing emotional intelligence and client relationship management abilities and nurturing the capacity to provide nuanced legal judgments and make ethical decisions in the context of AI use, leaders can better prepare their teams for an AI-driven landscape.
Aligning with client expectations — By proactively adopting GenAI, firms are not just cutting costs, they’re meeting and exceeding client expectations. According to the Thomson Reuters Institute’s 2024 Generative AI in Professional Services report, a significant portion of various corporate departments expressed that their external partners should be utilizing GenAI. Specifically, 58% of corporate legal departments and 56% of corporate tax departments held this view. Additionally, 44% of court systems and 40% of government legal departments also indicated that the outside firms they collaborate with ought to be implementing GenAI in their practices.
Communicating value — Transparency is key when implementing GenAI. Firm leaders need to clearly communicate to clients how GenAI is being used to improve service delivery and reduce costs. Educate them on AI adoption processes and its benefits and be open about addressing any concerns regarding data security and ethical AI use. This openness builds trust and positions the firm as an innovative leader in the legal industry. Raymond characterizes this as an opportunity to define the client firm relationship and establish guidelines together on billing and workflow efficiency optimization.
Offering continuous learning and optimization
The Thomson Reuters Stellar Performance 2024 Report says that to deliver unparalleled client outcomes, law firms must proactively harness the transformative potential of GenAI for enhanced efficiency and cost-effectiveness. As such, firms should regularly assess and update AI tools and processes and stay informed about legal and ethical considerations of AI use in law. Leaders should encourage innovation and experimentation among staff; and to ensure GenAI integration is empowering a profit center, they should establish clear metrics for AI implementation. They should also regularly review and analyze the impact of AI on their firms’ profitability, gathering feedback from both staff and clients to continually refine firms’ approaches. And remember, be prepared to pivot your strategy based on results and emerging technologies.
Conclusion
The future of law isn’t about replacing humans with AI — it’s about creating a synergy between skilled legal professionals and cutting-edge technology. By strategically implementing GenAI, Midsize law firms can transform themselves into highly efficient, profitable teams that are ready to meet the challenges of tomorrow’s legal landscape.
Remember, the goal isn’t just cost-saving — it’s about positioning the firm for success in an increasingly AI-enhanced world while ensuring employee development and satisfaction. With the right approach, GenAI can help better serve clients, open new areas of service, and drive profitability in ways that, before now, weren’t always possible. As the legal industry navigates this transformative period, it’s clear that the firms that embrace this change proactively and with optimism will be better positioned to win.
You can find more about the challenges facing Midsize law firms here
