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Small law firms more tech savvy as artificial intelligence emerges as competitive advantage

Australian law firms are embracing new technology, but smaller practices are more open to technological innovation than their larger cousins, according to a new survey.

When asked to rate how open they and their employees were to adopt new technology in the workplace on a scale of 0 to 100, small firms returned an average score of 71 out of 100, compared to large firms with an average of 55. The average for all respondents independent of size was 66.

The findings form part of the “Move Forward with Confidence: Your Roadmap to Transformation” report by leading Australian technology company GlobalX and the Australasian Legal Practice Management Association (ALPMA).

Practice management and document management software were the two most widely implemented and established legal innovations, but artificial intelligence was the least used, with almost 70 per cent of firms saying they had not introduced AI technology.

Zosia Kilmartin, Director at Brisbane-based small law firm Kilmartin Knyvett, believes technology is crucial to saving time and resources across her business.

“As a small firm, we embrace a range of technologies which help us to perform our jobs more efficiently which save costs for clients, “Ms Kilmartin said.

“The technology tools we find most beneficial are ones which reduce the time our lawyers spend reviewing documents or collating materials.

“Glorified administrative work can take hours when performed manually and waste billable time which is otherwise spent doing what technology cannot do: delivering legal services.” Ms Kilmartin said.

This “glorified administrative work” has led to the early adoption of AI at Kilmartin Knyvett.

“We use technology to assist us with the litigation of court proceedings for quick legal research, working out what needs to be disclosed in a dispute as part of discovery and assistance with document automation which allows us to produce documents faster,” Ms Kilmartin said.

“In addition to saving costs, these tools also limit the scope for human error. At our firm, we take a collaborative approach to AI. Technology can never replace the human factor which is essential in the successful practice of law.

“It cannot replace professional judgement (which comes from experience) or engage in persuasive arguments or fruitful settlement discussions and as such we work with service providers in the AI space who understand those realities,” Ms Kilmartin said.

GlobalX CEO Peter Maloney said that even though AI had a relatively low uptake, it had the potential to grow into a popular industry trend.

“While it’s the least utilised legal innovation now, for those early-adopter firms it’s a point of difference in the market and potentially a real competitive edge that other firms are yet to explore,” Mr Maloney said.

“For smaller firms who sometimes have to be more innovative to compete against the giants, AI could be the difference between barely surviving and thriving.”

Mr Maloney said nearly one-third of firms intended to introduce AI technology within the next year, but digital signing and practice automation topped the new-technology priority list. He added that for most firms, reluctance to onboard new technology was typically a matter of resources.

“The survey results show we are likely to experience a slow uptake of AI within the legal industry, with the innovation being a long-term, rather than immediate, trend,” Mr Maloney said.

“It’s not that firms are reluctant to innovate. The survey results show that by far the biggest impediment to adopting new technology is simply a lack of time and money.”

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