Survey Says: GenAI Usage and Firm Financials Were Both Up in Q3 2024

Greetings, legal tech hive. It’s somehow already approaching late November (where does the time go?), which means we’ll soon start seeing a wave of year-end retrospectives. In the meantime, I’ve had a lot of surveys and reports on Q3 2024 come through my inbox in the last week or two, and the results are worth noting. 

For the most part, the surveys paint a fairly rosy picture of where the legal industry is as it's poised to close out the year, with GenAI usage and law firm finances both on the rise. Of course, there were a few head-scratchers thrown in as well.  

Here’s my rundown of some of the surveys and results that caught my eye. 

Legal Industry AI Usage Is Up 

Last week, IDC released a study commissioned by eDiscovery giant Relativity on the current state of generative AI use in legal. Entitled Generative AI in Legal 2024, the survey of 300 legal professionals at law firms, corporations, and government agencies across North Ameria, Europe, Australia, and New Zealand saw significant increases in the usage of GenAI across the industry. 

As compared to two years ago, 50% of respondents said their AI use has increased, while 43% reported that it stayed the same. Bafflingly, 3% said their AI use decreased in the last two years—I'd like to know who you are and how that is even possible.  

A couple other results that surprised me: 

• When it came to priorities for choosing GenAI providers, security posture came in third place behind AI governance and clear AI principles. 

• Legal was tied with IT as the department having the biggest influence on purchasing AI as part of the general technology buying process. 

• More law firms on a billable-hour model report already using GenAI —59%, as opposed to 42% of respondents who use task-based billing. 

And now for some of the less-surprising results: 

• Legal ops professionals and paralegals report using GenAI more than lawyers do. 

• Larger organizations use GenAI more than smaller organizations, with usage rates increasing by almost 50% at organizations with over 1,000 employees. 

• Document review is the area where most respondents expect to use GenAI in the future and the task legal professionals most trust delegating to AI (89% were either somewhat or very comfortable using it for doc review). 

• Law firms on a billable-hour model were the most interested in automating low-level tasks and lowering costs. 

 
Q3 Was Good for Law Firms 

Now, I’ve taken enough statistics classes in my days to know not to confuse correlation with causation. That said, while GenAI use has been growing, so have law firm financials. 

Thomson Reuters Institute released its Law Firm Financial Index for Q3 2024, which showed that firms are thriving, achieving the second-highest score of all time in the index. According to the report, “In their seventh consecutive quarter of improvement, firms not only notched one of the best historic scores but perhaps look fundamentally stronger than in any period in recent history. Behind much of this strength was a resurgence in legal demand and further gains in productivity, all of which made a small uptick in expense growth look like the minor cost of doing business. In all, it looks like clear sailing for firms to outperform all but their profit heights of 2021.” 

According to the report, firms are seeing growth across the board: growth in demand for all major practice groups (except IP, which declined just 0.2%); growth in transactional demand, which saw its best performance since early 2022; and growth in law firm productivity, reported by 64% of firms following Q2’s first reports of productivity growth in years. 

But Do Law Firms Actually Know If They’re Using AI? 

It’s no secret that lawyers don’t always know exactly what tech they’re using when they’re using it. For the average user, that’s often fine. On a firm-wide basis, however, knowing what technology is being used is critical. 

The results from the 2024 LTN Law Firm Tech Survey by Legaltech News included a figure that surprised me. In response to the question “Is your firm leveraging generative AI models for internal or external work?”, only 46.67% of respondents said yes. Interestingly, 50% of respondents said they weren’t leveraging GenAI yet, but were looking into it. 

Given the extent to which GenAI has ingrained itself in legal tech at this point and the sheer number of legal and enterprise tools that are incorporating it, it’s surprising to me if indeed 50% of firms are not yet using it in some capacity and are only just considering it. 

Perhaps my sense of reality is skewed. Or perhaps these responses are in the vein of firms saying they’d never use AI or the cloud, when in fact they’d already been using it for years without necessarily realizing it. Or perhaps it’s a persistent issue of not being able to agree on how to define GenAI. Likely it’s some combination of all of the above. 

And, of course, there’s always the issue of employees going rogue. In the recent 2024 Work Trend Index Annual Report from Microsoft and LinkedIn, it was reported that 73% or more of all generations from Gen Z to Boomers and beyond were using AI tools at work that were not provided by their organization. The report refers to the phenomenon as “BYOIA” (bring your own AI). 

...are we not calling this shadow IT anymore? 

If you need me, I’ll be over here in the corner with the other Gen Xers and our 90s lingo. 

What I’m Watching: 

Priori added a new software solution to its outside counsel selection and management platform. Priori RFP is designed to streamline the RFP process for corporate legal departments and is being offered as either a standalone solution or as a complement to the Priori Panel Management platform (formerly called Scout). 

Robin AI revealed that it raised an additional, previously undisclosed $25 million in funding earlier this year from a group of customers and existing investors, including Paypal Ventures and Cambridge University. The substantial raise was in addition to its $26 million Series B raise in January 2024 and outside the fundraising cycle, reportedly to capitalize on the momentum created by the Series B and the launch of Robin Reports. 

Experiential legal training provider AltaClaro launched BenchMark360, a data-driven dashboard designed to provide associates taking AltaClaro courses with personalized feedback on their submitted assignments. The dashboard delivers objective, personalized performance insights to associates and their law firms via a combination of AltaClaro’s practitioner instructors and its proprietary AI-powered assessment engine. 

Legal analytics platform Lex Machina announced the completion of its federal district court dataset, enabling the company to now offer full federal district court coverage, dubbed Full Federal. In addition, the platform announced an updated interface, the implementation of “Findings Search” to allow users to search for the most relevant findings within specific practice areas, and the availability of Legal Analytics via Litigation Analytics in Lexis+. 

The award for best use of AI in the past week goes to Virgin Media O2, who unveiled Daisy, the “AI granny wasting scammers’ time.” With the title “Head of Scammer Relations,” Daisy is designed to waste the time of UK scammers with feigned interest and seemingly real questions, thereby reducing the time they can spend scamming real people. The video in the linked article is worth the watch and made my day. #TeamDaisy