This newsletter is a key component of our proprietary AI Strategy Exchange program, which is offered in partnership with LawVision’s Strategic Pricing, Profitability and Data Science Principal Mark Medice. This newsletter is crafted to be succinct and focused, highlighting what we believe to be essential reading related to the latest news about AI strategy. We take the readings a step further by contextualizing their ideas within the legal sphere, tailoring insights specifically for law firm leaders.
June 13, 2024 | 🕐 5 Minute Read
Don't Let the AI Hype Cycle Distract You from Its True Potential
This newsletter addresses recent articles, surveys, and vendor claims about the pace of change and accuracy of legal research tools. While AI is indeed transformative, we are still in the early stages of its lifecycle, which presents numerous opportunities alongside significant risks. Our advice? Move forward but with caution.
Our Take: Be an AI skeptic. Believe in AI's potential but demand proof before deploying. Vendors' claims about AI tools often lack objectivity, pushing shiny promises without solid evidence, while asking for a hefty price tag. Vetting these tools is crucial to balancing risk and reward. The issue isn’t that the tools are inherently bad, but they often fall short of their claims, leading to credibility issues and higher risk. For instance, AI legal tools from LexisNexis and Thomson Reuters, despite reducing errors, still hallucinate alarmingly...producing false information 17% to 34% of the time. Don't let the AI hype blind you.
Key Lessons: Ensure you fully comprehend what you are buying and don’t rush into big-ticket purchases without proper justification. Deploy these tools with a comprehensive legal ethics and educational framework. While AI in legal practice is promising, it is far from foolproof. Integrate with caution, maintain strict human oversight, and don't let flashy tech compromise your legal integrity. In legal practice, precision is everything.
Our Take: PwC's report claims that AI-savvy lawyers in the U.S. earn a dazzling 49% wage premium, while those in the U.K. see a 27% boost. Sounds impressive, right? But let's not get carried away. First, how does one measure an AI-savvy lawyer, and to whom are they being compared? This report seems to chase the latest AI headline but actually raises important questions about the skills necessary for lawyers today and tomorrow.
AI skills like machine learning are valuable, allegedly driving productivity fivefold in AI-centric sectors. However, the reality check is sobering. Top law firms are just beginning to explore AI tools like Harvey, Casetext and Lexis AI. The real kicker? The market impact of AI is still a massive question mark. Most firms haven’t fully integrated AI into their high-stakes work yet. So, before you buy into the AI lawyer gold rush, remember that not everything that glitters is gold. Stay skeptical and keep your BS radar on high alert.
Our Take: In its latest AI survey, McKinsey reports a surge in the adoption of generative AI, with 65% of organizations regularly employing this technology, nearly doubling from the previous year. The McKinsey Global Survey on AI highlights that generative AI drives significant business value, which is evident in cost reductions and revenue increases across various sectors. Despite these benefits, challenges like inaccuracy and intellectual property risks persist.
However, in March, McKinsey released an article titled "The Generative AI Reset," which described the difficulty of harvesting value from AI. This was referenced in Volume 2, Issue 8 of our newsletter. Are these two items contradictory, or are we simply following the data trail and searching for clues? Can both perspectives be valid?
While we may be reaping productivity gains from AI, it's crucial to acknowledge the significant challenges that come with it. These challenges demand innovative methods, risk-taking, and diligent follow-through. Many take a more grounded view of what AI means for our world. For a different perspective, see this week's WSJ article, "The AI Revolution Is Already Losing Steam," which we will review in our next newsletter.
**REMINDERS**
SCG’s AI Strategy Exchange Working Group has a dedicated webpage to host meeting recordings, presentations, and handouts as well as other related resources. Please click HERE to access/bookmark it.
NEXT MEETING|June 25 10:30 AM – Noon ET > APPLICATIONS AND DESIGN
The focus will be on key use cases, priorities and speed, business model changes, rates and pricing, capital needs, and tools and technologies. If you do not have this invite on your calendar, please email SCG's Michele Bisceglie atmbisceglie@scglegal.com.
Pre-Meeting Request #1:Do you have a sample malpractice policy you can share?If so, please share it with SCG's Michele Bisceglie at mbisceglie@scglegal.com. As offered in the Kickoff Meeting (March 28), our Working Group discussions are in confidence, but please redact any details you feel need such attention before providing your document/s.
Pre-Meeting Request #2:We are looking for a few volunteers to participate on a small panel for the June 25 meeting.Please note the focus above but do not feel like you have to be an expert. The discovery process of what is - and is not - needed/wanted by a firm/clients should be part of the discussion. There will be one brief planning session prior to the meeting. Please email SCG's Michele Bisceglie at mbisceglie@scglegal.com if you are interested in participating.
SCG AI Strategy Exchange LinkedIn Group
We have formed a closed (just for members of this initiative) LinkedIn group to provide members with a safe space to connect and communicate with each other on this dedicated initiative. Please feel free share resources, advice, news…and, of course, ask questions. Click HERE to join. (Note: We cannot add you to the group. You must request to/join the group to gain access.)
We regularly post news about the network and its member firms, so please follow us to stay up to date, tag us in your firm posts, and share with us what's happening at your firm!
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