White paper

The financial and operational benefits of AI for small and midsize law firms

At this point, there should be little question that AI can reshape the way legal professionals do their work. However, small and midsize law firms may still be grappling with exactly how generative AI (GenAI) tools in particular could be beneficial. Once the dazzling feeling of learning these tools’ potential fades, the question of how to best use them looms front and center.  

For many lawyers, the challenge lies not in believing in AI’s potential, but in identifying specific, practical use cases that deliver measurable value. From automating intake to accelerating legal research, professional-grade tools powered by AI open up new ways for small and midsize firms to operate more efficiently, compete effectively, and focus more on client service.

How AI adoption is impacting the legal profession

Before we detail how AI can give law firms a measurable boost to their bottom lines, it would be helpful to understand where the legal industry at large stands with respect to the technology. 

Although the legal industry is well known for its hesitation to warm up to new technology, data suggests that firms are adopting AI-powered tools more quickly than previous kinds of legal tech. In a recent Generative AI in Professional Services Report, the Thomson Reuters Institute surveyed more than 1,700 respondents across the United States, the United Kingdom, and Canada to gather insights into attitudes toward and adoption of GenAI in legal services. Respondents included attorneys at firms, government agencies, and corporate departments, as well as tax and risk professionals.

The deep dive into GenAI’s impact on legal services found that:

  • Over half of law firms (59%) and corporate legal departments (57%) reported believing they should apply GenAI to their work. It is quite clear that most legal professionals understand and agree that GenAI can automate rote tasks, enhance the final product, and improve the delivery of legal services — and they want to start seeing those benefits today, not tomorrow.
  • For the top three reasons GenAI should be applied to work, professionals cited assistance with or automation of routine tasks, time savings and streamlined processes, and increased efficiency and productivity.
  • GenAI use has not yet permeated the legal industry, but it is growing, with 26% of legal respondents saying they are already using GenAI, up from just 14% a year ago. Use of GenAI is highest among law firms (28%) and corporate legal departments (23%). 
  • Although hesitation remains about the potential for misinformation and unethical use, a majority of those asked expressed optimism about GenAI. More than half (55%) of all respondents said they were hopeful or excited about the future of GenAI, indicating that there is enthusiasm for the benefits it can bring.

In the short time that AI tools have been widely available, innovative law firms and legal departments have found several ways to integrate them into their workflows.

Document review

AI does not eliminate the need for human involvement in document review, but it has made what was once a tedious, time-consuming, and expensive process more efficient and expeditious. An AI legal solution can summarize lengthy texts, sort and categorize voluminous documents, and look for specific words or phrases. Altogether, it makes document review faster, more accurate, and less labor-intensive. That is a major benefit for cost-conscious law firms, as well as for lawyers who would rather spend their time on higher-level, strategy-based work.

Client communication

There is no sense in drafting the same correspondence repeatedly, especially if an attorney is building that correspondence from the ground up. AI tools have made polite, clear, and professional client correspondence a breeze. They can generate tailored messages for different case types, ensure consistent tone, and even suggest rephrasing legal jargon into simplified terms. Overall, this technology can help lawyers be more responsive and keep clients thoroughly informed about their cases.

Legal research

When conducting research, an AI-powered tool can serve as a guide, helping sift through relevant cases and pointing out possible threads and avenues that lead to a sound, well-supported conclusion. It can also generate first-pass case summaries, identify conflicting authorities, and flag jurisdiction-specific details that are easy to miss during conventional research.

Administrative work

Lawyers want to practice law, not deal with administrative tedium. AI tools reduce the time spent on routine work while enhancing accuracy and reliability. These tools streamline processes like timekeeping, billing, calendaring, and document management, simplifying or automating them to reduce the administrative burden. By minimizing these tasks, legal professionals can reclaim valuable hours once lost to unbillable work. By improving workflows, legal professionals can reclaim valuable hours once lost to unbillable tasks.

The financial and operational advantages of AI use

AI adoption in the legal field is growing, but as noted in the GenAI report, more than half of professionals said their organizations are not measuring return on investment (ROI) for GenAI tools. Even the most impressive technology in the world is not usable if it cannot demonstrate a measurable effect on financial performance.

The latest Thomson Reuters Future of Professionals Report states that organizations achieving the highest ROI from AI will be those that align their adoption patterns with their strategic priorities. This synchronization ensures that AI tools are deployed where they deliver the greatest value and are tailored to the needs of specific functions. If law firms follow this initiative — and coordinate implementation across all levels of their business — they will achieve greater progress, efficiency, and value than firms with an undirected approach.

As noted in “The AI-driven future of legal efficiency” white paper, “GenAI should not be viewed merely as a means to reduce human input, but rather as a tool to elevate legal service delivery.” Because GenAI can lead to qualitative and quantitative benefits, it does not lend itself well to pure and simple ROI analysis. However, it does include the following chief benefits.

Cost savings

Lawyers know better than anyone that time is money. AI solutions can make many tasks more efficient and less time-consuming, freeing lawyers to focus on the type of high-level work they prefer. Doing so grows their books of business, which can boost firm revenue. By reducing the time spent on repetitive drafting, document review, and research, firms can take on more matters without increasing headcount. Smaller firms can also stay competitive with larger ones by delivering faster, more affordable services — a critical advantage for any firm that wants to stay ahead.

Increased productivity

Automation, faster document processing, and improved workflow can lead to better time management and a significant efficiency boost. By using AI-powered tools, legal professionals can have more time for strategic thinking, client interfacing, and business development. Many attorneys have embraced the use of AI because the time savings mean they can have a better work-life balance — no minor consideration in an industry notorious for overwork and burnout.

Improved client retention

Clients want to know that their attorneys are delivering the best legal product they can in the timeliest, least costly way possible. AI assistants can help law firms work faster, ultimately leading to happier clients and greater satisfaction.

As we discuss cost savings and efficiency improvements, it is important to bear in mind that not even the world’s top AI experts believe it can — or should — replace humans. In a legal context, it is by no means a substitute for a lawyer’s experience, client knowledge, and understanding of how to navigate the complexities of a real-life legal matter. 

AI tools can enhance productivity, improve workflows, and trim away needless costs, but they cannot remove a human lawyer from the equation entirely. Clients want and need solid counsel, experience, empathy, and accountability — qualities only human professionals can provide. AI-powered solutions are incredibly powerful assistants, but ultimately, it is the lawyer who delivers what clients need.

An outsized benefit for midsize firms

AI solutions can impact the legal industry as a whole, but midsize law firms are a unique case. As covered in a report on the current state of midsize firms, they face significant challenges and stand to benefit from specific opportunities. 

Here are three ways midsize law firms stand apart from their peers:

  • Demand growth. Midsize law firms are experiencing a stronger demand for services compared to the industry in general, presenting a significant opportunity for these firms. However, to capitalize on this potential, they must proactively pursue it.
  • Growing productivity. Traditionally, midsize firms have lost out on some of the benefits that large law firms enjoy, like economies of scale and more integrated technology. Lately, however, productivity at midsize firms has been growing, compared to a 15-year-long decline in productivity for law firms overall.
  • Balancing act. Midsize law firms are balancing their need to increase their hourly rates to optimize revenue potential against their value proposition of having a cost advantage over larger peers.

Against such a backdrop, it becomes easy to understand how AI solutions could benefit midsize law firms. AI-driven productivity gains make these firms more efficient and competitive, allowing attorneys to deliver a higher volume and quality of work while reducing time and labor. It is easy to envision a future in which a midsize firm that uses this technology thoughtfully, strategically, and carefully can succeed when competing for work.

To see what this looks like in practice, the following case studies highlight CoCounsel Legal — the premium AI built on Westlaw and Practical Law — and the tangible results firms are achieving today.

The benefits demonstrated in case studies

CoCounsel Legal is the first and leading professional-grade AI solution for the legal industry. It’s a single, seamless solution that connects all the dots: legal research, document analysis, and drafting. Built on the authoritative content and expertise of Westlaw and Practical Law, CoCounsel Legal gives you more thorough answers faster. It frees you for the creative thinking, strategic planning, and relationship-building needed to better serve your clients, sharpen your practice, and grow your business. Many small and midsize law firms have reported great results using CoCounsel.

Working to protect clients

For Diane Haar, Thomson Reuters Westlaw Precision with CoCounsel means she and her small support team at Hawaii Disability Legal Services can be more than the sum of their parts.

Haar has two offices in Hawaii and often travels throughout the Pacific to help her clients, many of whom have disabilities and need her support to claim their benefits. But she cannot be everywhere at once. Because Haar’s time is at a premium, Westlaw Precision’s AI-Assisted Research has been invaluable. “The time savings is massive, and time is money,” she says.

With the time saved by using Westlaw Precision with CoCounsel, she has been able to take on more clients and try their cases more effectively. The AI-Assisted Research feature has been a particular game-changer, which she describes as a legal research assistant on steroids that enables her to find answers to her questions quickly.

While Haar has invested much of the time she saved using Westlaw Precision with CoCounsel back into her practice, she has also been able to have more free time. This improvement in work-life balance helps her be the best attorney she can be. Now she can concentrate on the people behind the cases, giving them the care and attention they deserve.

Serving more clients well

Since his student years, Safa Riadh has relied on online research. Now, just seven years into his practice, technology remains an integral part of his career. Even against that backdrop, he has found Westlaw Precision with CoCounsel to be unreal. With its AI-enhanced capabilities, Riadh has been able to handle a higher volume of work more quickly without sacrificing quality. “When I can solve somebody’s problem quicker, not only is my client happy with me, but my reputation in the community is strengthened,” he said.

Furthermore, AI-Assisted Research has helped Riadh accept cases he once might have avoided. He says he enjoys taking on matters in new areas of law, especially when it is clear that the clients truly need his help. “Westlaw Precision with CoCounsel gives me language from the statutes or case law themselves to quickly understand what I need to understand and then apply it,” he says.

Boosting productivity and client well-being

At Laffey Bucci D'Andrea Reich & Ryan, Guy D’Andrea works exclusively with survivors of abuse, bullying, and hazing. Because he works on such sensitive cases, it’s crucial for him to avoid using a consumer-grade GenAI product that isn’t compliant or secure. 

“Choosing Thomson Reuters was a no-brainer for me,” says D’Andrea. “You have the power and the name and reputation of Thomson Reuters and Westlaw, which in the legal industry is a household name.”

With CoCounsel, D'Andrea can generate summaries, timelines, and identify key documents. He also leverages AI-Assisted Research in Westlaw Precision to lay the groundwork for his cases, bringing the benefits of GenAI to life in his work. D’Andrea estimates the feature has saved him as much as 80% of the time he once devoted to legal research.

“It allows you to hyper-focus on that incredibly important skill set — and less on the everyday monotony of what we sometimes do in the practice of law,” he says. 

Additionally, D'Andrea advocates for caution when utilizing GenAI, emphasizing the need for clear rules and procedures that protect confidential data. When used responsibly, an AI-powered solution can bring tangible benefits to one’s practice and the well-being of clients. “If you don’t get behind this, I think you’re doing an incredible disservice to your clients,” he stated.

A how-to guide for AI adoption

Do you think your firm would benefit from using AI tools? If you aren’t sure how to start the process, here are four general steps that will help you make the best choice:

  1. Take a needs assessment. Determine what the lawyers and others within your firm would like to use AI for, and whether the time and cost savings merit its implementation. Equally important, identify areas where you should not use AI and ensure the firm can prevent its misuse.
  2. Evaluate the product. Once you know what your firm’s attorneys would like to use AI for, assess which tool would be the best choice. Ask for a demonstration and see whether you can have a trial period. Balance the investment of purchasing the technology against how much work and time you think it would save. 
  3. Commit to continuous learning. Once you have chosen your AI solution, you will need to adopt a culture of continuous learning to make sure you’re using it properly. Fine-tuning skills is never a bad idea, which is why lawyers are required to take Continuing Legal Education credits. Assess whether the provider offers educational and support opportunities. If not, identify someone within your firm who could take on training duties.
  4. Analyze the cost benefits. After six months and then again after a year, compare the time and labor savings of your AI tool against its capital outlay. Usage matters, of course, but the dollars saved by using it matter more.

Ultimately, small and midsize law firms stand to benefit from greater AI adoption more so than their BigLaw counterparts. The improvements AI can make to efficiency, time management, and work product mean lawyers can spend more time on higher-value work. Firms that carefully monitor how they use their AI tools will soon see that they are an investment worth making.

Those firms will also see that AI tools are advancing quickly. Generative AI (GenAI), which creates text or other content based on large datasets, has quickly become standard across the legal industry. New on the market is agentic AI, which often works in conjunction with GenAI and is focused on planning and executing multistep processes based on initial user prompts. The legal solutions of the near future will incorporate multiple kinds of AI, each doing specific types of work they are designed to do well, all set in motion, supervised, and validated by human experts. The first solution of that kind, CoCounsel Legal, combines powerful AI capabilities for legal research, document analysis, and drafting to give legal professionals the tools they need to deliver more thorough and accurate work more quickly.

Thomson Reuters, with decades of AI expertise, ensures the seamless integration of our solutions into your workflow. Over 20,000 U.S. law firms and legal departments are already using CoCounsel Legal, along with courts across the U.S. federal court system. Elevate your firm's efficiency and effectiveness and request a demo today.

AI lawyers swear by

CoCounsel Legal

Accelerate your legal work with a comprehensive AI solution that helps you complete research, document analysis, and drafting all in one place