This year at ILTACon, we joined the Small Firm Roundtable to see how the evolving landscape of legal technology is impacting the long tail of firms that make up the majority of companies in the legal space. As expected, the conversation was as lively and varied as the firm leaders that comprised the roundtable. Here are the key takeaways from the session:
Generative AI: Cautious Optimism with Big Potential
Generative AI was the hot topic, with firms in various stages of adoption. While large firms may already have dedicated AI budgets, smaller firms are navigating more slowly, needing to find the right balance between innovation and practicality.
Early AI Adoption: Some firms have begun experimenting with tools like Lexis+ for legal research or deposition summaries. However, many expressed the need for prompt training to ensure accuracy and usability. Several firms are still in the early stages, using AI to clean up internal systems or performing limited testing with practicing lawyers.
Monetization and ROI Concerns: Figuring out how to make AI profitable remains a challenge. Some firms are unsure how AI will generate revenue or what specific value it will bring to their practice. For now, many view AI as a long-term investment, with some leaders emphasizing that AI’s full potential may not be realized until it becomes more specific and practical for niche tasks.
Guardrails and Trust: Caution about the future was a common theme. Many are waiting to see how guardrails will be implemented, especially when it comes to data security and client trust. Participants discussed how clients expect costs to decrease with AI use, but integrating these tools also comes with financial and ethical concerns.
Outsourcing: A Practical Necessity
Outsourcing remains a core strategy for small and mid-size firms, but it comes with its own set of challenges and opportunities.
Security and IT Outsourcing: Firms almost universally outsource their cybersecurity needs, with some relying on solutions like Arctic Wolf to manage threats. Other services, such as payroll and infrastructure, are frequently outsourced, allowing firms to focus on core legal work.
Concerns Around Acquisitions: Outsourcing partners can change suddenly, as seen when managed service providers (MSPs) get acquired. One firm expressed concern that their larger MSP provider simply “doesn’t get us” after a recent merger, illustrating the potential disconnect that can happen when small firms are serviced by larger, less agile companies.
Cost Efficiency through Outsourcing: Many firms cited outsourcing as a means to control costs, with one participant explaining how they blueprint solutions internally and then outsource development for a fraction of the cost. Having backup plans—such as second layers of external verification—is also common, ensuring that outsourced solutions are as reliable as in-house ones.
Tech Training: Filling the Support Gap
As technology evolves, the demand for ongoing training and support becomes even more important. However, the availability of trainers and specialized personnel is shrinking.
Training Gaps: Participants noted that training is becoming harder to find and afford, especially for smaller firms. While some firms rely on external consultants like Traveling Coaches, others have turned to in-house solutions, such as secretaries or hybrid roles where staff are cross-trained.
Focus on Knowledge Base and Self-Sufficiency: Several firms are focusing on building knowledge bases (KBs) and encouraging their staff to solve problems independently. This self-service model allows firms to alleviate pressure on IT and support teams but requires a solid initial investment in documentation and user education.
User Issues Over Technical Problems: Interestingly, a significant number of incoming issues are not purely technical but are user-related. This underscores the importance of providing practical, easy-to-understand training that addresses real-world use cases, rather than just offering technical overviews.
Final Thoughts
The roundtable highlighted that while there’s enthusiasm around technology—especially generative AI—small and mid-size law firms are still navigating how to implement these tools effectively. Balancing innovation with security, client trust, and cost concerns is a priority, as is ensuring that the firm’s workforce is properly trained to handle the tools at their disposal. As the legal tech landscape continues to evolve, these firms will need to be strategic about adoption, outsourcing, and training to remain competitive.
