Four Strategic Questions for Law Firms and AI

Further to my post last week, where firms are increasingly anticipating a negative impact of AI on their business models, there are essentially four strategic questions they need to be able to answer

Namely, what is the impact of AI on:

(A) The clients they choose to serve

(B) The services they choose to offer

(C) The prices they choose to charge

(D) The way they choose to deliver the work

Note the emphasis on choice

Much of the discussion to date has been around (D) "look at the time savings!", and increasingly (C) "quick, switch to value based pricing before clients notice!"

I suspect it's the tide going out on that second point that causes the negative swing in sentiment in the recent PwC survey from last year, particularly in the Top 10

In truth, there are both opportunities and threats across A - D, and it is necessary to consider all four holistically rather than react to each in turn (whack-a-mole as strategy)

So for example, an opportunity around (A) for a smaller firm may be that they can use AI to serve larger clients that previously would have required headcount. Whereas a threat may be where clients are now using the very same products and skipping the need for external counsel completely.

Who firms target and position themselves in front of becomes key here

Similarly with (B), there are potentially opportunities for firms to capture volume in a previously economically unviable area (Garfield AI is a clear example here), or a threat may be that previously lucrative services are no longer (DD feels vulnerable to me)

Price (C) needs to consider the cost of delivering the service, the value to the client and competitor pricing - all of which are potentially impacted by AI and the latter strikes me as a particular blindspot for many

Delivery (D) needs to join up with each of A, B and C but even within the confines of D, firms need to think more broadly than just time savings on a performing a particular task. At it's simplest, consideration needs to be given to the inputs to that task (esp. data/KM) and the outputs (esp. offsetting task savings with increased review/supervision costs downstream)

All of this requires a big step back from the tactical "what product should I buy today" towards the more holistic "what are we trying to achieve", combined with a deep understanding of specific context

Central management and their teams (and dare I say, external facilitators cough) have a role to play here providing structure around these conversations but, ultimately, it's the individual partners that know their clients and teams best that need to put in the legwork

AI prompts 4x strategic questions