Unlocking the power of AI: Opportunities and use cases for law firms

Artificial intelligence (AI) is here. And it’s already reshaping the way law firms operate. Whether automating repetitive tasks, improving risk management, or boosting efficiency, AI presents a genuine opportunity for forward-thinking legal practices. But with new opportunities come new responsibilities. And as firms explore AI tools, it’s essential they consider how to govern them safely and ethically. That’s where an AI policy becomes indispensable.

So, what can AI actually do for your firm right now? Let’s take a closer look.

1. Risk identification

Risk and compliance teams deal with mountains of data every day – from client due diligence files to transaction histories and document trails. AI is uniquely suited to assist with these tasks because of its ability to process vast amounts of information rapidly and spot patterns a human might miss.

In the context of anti-money laundering (AML), for example, AI can automate identity verification, monitor transactions for suspicious activity, extract data from adverse media sources and publicly available records, and cross-reference client data against sanctions lists or politically exposed persons (PEP) databases. What used to take hours of manual review can now be performed in seconds, with greater consistency and fewer errors.

AI can also support client onboarding by flagging potential conflicts or inconsistencies in documentation before a matter is opened. This proactive identification of red flags helps ensure compliance with regulatory obligations and internal risk frameworks.

Importantly, AI doesn’t replace compliance professionals – it supports them. The SRA’s Code of Conduct requires firms to have effective systems for monitoring risk – AI can help here, but the obligation always sits with the firm. However, by handling repetitive and labour-intensive tasks, AI frees your team to focus on higher-order risk decisions, policy refinement, and strategic oversight.

2. Outcome prediction

Beyond routine compliance, some law firms now use predictive analytics and machine learning models to inform litigation strategy and manage legal risk. These advanced AI systems can be trained on large volumes of historic case data to assess how specific factors – jurisdiction, claim type, opponent profile, etc, – affect the likelihood of a case succeeding or settling.

This has powerful implications. Imagine giving a client not only your legal opinion but also a data-backed probability score showing their chances of success based on thousands of similar cases. AI doesn’t eliminate uncertainty, but it provides an extra layer of insight to inform decisions around litigation strategy, negotiation, and cost forecasting.

For law firms, the ability to predict outcomes gives them a huge competitive edge. It allows them to offer more informed advice, take on the right cases, and build trust through transparency.

As the regulator scrutinises the use of AI, firms that adopt these tools with strong oversight and governance frameworks will be better prepared to meet compliance expectations.

3. Administrative efficiency

Every firm faces the burden of time-consuming admin-client onboarding forms, document reviews, conflict checks, and more. AI-driven tools can handle much of this work, freeing up staff for more strategic or client-facing tasks.

For example, many firms now use AI-powered tools to automatically review and categorise legal documents, extract key clauses, and flag inconsistencies or risks. This dramatically reduces the time spent on manual review while increasing accuracy. AI is also being used to monitor internal workflows and help with resource planning – identifying bottlenecks, reallocating caseloads, and forecasting where capacity may be needed.

Client interaction is another evolving area. Virtual legal assistants and AI chatbots can now handle FAQs, channel client queries to the right department, and even offer guided onboarding processes – all of which boost response times and improve client satisfaction.

For clients, this means faster service and, potentially, lower legal fees. For firms, it offers scalability and cost savings – something that is particularly valuable in a competitive market where efficiency can be a differentiator.

4. Text generation and drafting support

Generative AI has rapidly become a powerful assistant for lawyers. Tools like ChatGPT can now produce first drafts of contracts, client letters, or internal documentation, drastically reducing the time spent on routine writing. These systems can also summarise lengthy articles, digest court rulings, or generate marketing content, making them versatile tools for fee earners, compliance teams, and business development alike.

However, while AI can generate content quickly, it’s not always accurate, and that’s where risk creeps in. Without oversight or clear guidance, a well-meaning shortcut can soon become a compliance issue. The SRA is clear that solicitors remain accountable for any output shared with clients. So, while AI can assist, it can’t replace professional judgment or due diligence.

Why you need a robust AI policy

Adopting AI tools without a policy is like driving without a seatbelt. It might get you where you want to go, but the risks aren’t worth it.

An AI policy ensures your firm:

• Uses AI tools safely, ethically and within regulatory boundaries
• Has clear rules around data handling, bias mitigation, and human oversight
• Is protected from reputational and legal risk as use expands firmwide
• Supports staff training and provides clarity on what’s allowed – and what’s not.

With the regulators taking an active interest in how AI is used in practice, law firms cannot afford to dabble without a governance framework.

Next steps

If your firm is exploring or already using AI, now is the time to put a robust AI policy in place. Our tailored AI Policy for Law Firms provides a clear, practical framework that aligns with your risk appetite, regulatory obligations, and commercial goals.

Want to learn more? Email: bestpractice@legal-eye.co.uk or call: 020 3051 2049 today.