AI as Cost-Effective Alternative to Additional Staff for Small Law Firms

Note: This article is just one of 60+ sections from our full report titled: The 2024 Legal AI Retrospective - Key Lessons from the Past Year. Please download the full report to check any citations.

Challenge: Cost-Effective Alternative to Additional Staff

AI can perform tasks traditionally assigned to paralegals or junior associates, providing a cost-effective alternative to hiring full-time support staff. The 2023 Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence highlighted the potential for AI to transform various sectors, including legal services, by improving efficiency and reducing costs.[144]

While AI offers significant advantages for small law firms and sole practitioners, it is crucial to consider potential limitations and ethical implications. A May 2024 study revealed that legal AI models can hallucinate in 1 out of 6 (or more) benchmarking queries, emphasizing the need for proper oversight and evaluation of AI tools in law.[145]

As AI continues to evolve, its potential to empower smaller legal entities and reshape the competitive landscape of the legal industry is likely to grow.

"Issues with hallucinations still highlight the need for human expertise in order to recognise where errors may lie together with fact-checking. Lawyers can still leverage their efficiency while maintaining professional oversight to ensure accuracy which underscores AI's role as an assistant not a replacement."

Natalie Salunke, General Counsel, UK

"Many clients remain skeptical, often favoring human-generated work over AI-driven outputs. To address this, law firms should focus on leveraging AI to enhance, rather than replace, human expertise—boosting efficiency and elevating client service."

Duska Frink, Global Director - Solutions Management, BigHand, Canada