The legal profession has crossed an important threshold. AI is no longer primarily an experiment. Work that once took days can increasingly be completed in hours. Drafting cycles are compressing. Document review is accelerating. Lawyers can find, analyze, and synthesize information at a speed that would have been difficult to imagine only a few years ago.
That is significant progress. But it also creates a harder question for law firms: What are they going to do with all of that efficiency? 74% of lawyers now use AI weekly, but only 18% of firms can show a return on that investment.
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Most of the legal industry’s AI investment so far has understandably focused on the practice of law: helping lawyers draft, review, research, analyze, and deliver work more efficiently. Far less attention has been paid to what happens on the other side of that equation.
How does the firm use the time AI gives back to strengthen a client relationship? How does it recognize the next opportunity earlier? How does a lawyer understand everything the firm knows about a client before walking into a meeting? How does the firm bring its collective experience to bear when pursuing new work? And how does it demonstrate greater value to clients as the economics of legal service delivery begin to change?
Efficiency by itself does not create growth. As AI compresses some of the work traditionally measured in billable hours, firms may find themselves caught in what I think of as the AI efficiency trap: becoming substantially better at producing legal work without becoming equally better at creating, demonstrating, and capturing client value. Roughly $143 billion in U.S. legal and accounting revenue is under active reconsideration as AI reshapes what clients are willing to pay for. Rates can only go so high. As hours are getting reduced, clients are demanding more value, predictability, and responsiveness than ever.
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Faster Lawyers Do Not Automatically Create Growing Firms
For years, law firms have tended to treat the practice of law and the business of law as separate technology problems. On one side sits the systems lawyers use to perform the work: drafting, document management, research, comparison, knowledge, transaction, and litigation tools. On the other side sits the systems intended to help the firm understand and grow its business: relationship intelligence, CRM, experience management, marketing, business development, opportunities, proposals, and client planning.
The organizational boundaries are understandable. The problem is that clients do not experience the firm that way. To the client, the quality of the legal work, the knowledge a firm brings to the relationship, the responsiveness of its lawyers, its understanding of the client’s business, and its ability to anticipate what comes next are all parts of the same experience.
Yet the intelligence required to deliver that experience remains fragmented at many firms. The firm may know that it has handled dozens of matters relevant to a client’s emerging problem, but the lawyer preparing for tomorrow’s meeting may not know it. Marketing may see signals of growing engagement with a client that never reaches the relationship partner. Another partner may have a strong relationship with an executive the firm is trying to reach, but nobody pursuing the opportunity knows that relationship exists.
The firm may have exactly the experience required to win a new mandate but fail to recognize it or demonstrate it at the moment it matters. Law firms do not generally suffer from a lack of information. Increasingly, they do not even lack the technology to connect it. The harder problem is turning that intelligence into coordinated action.
The Growth Challenge Is an Action Problem
Cross-selling is a good example. For decades, firms have talked about cross-selling as though the problem was simply getting partners to behave differently. But lawyers are busy serving clients, and much of the context required to identify an opportunity still resides in individual lawyers’ heads. A partner may understand the relationship extremely well: its history, its politics, its strengths, the people who matter, and the areas where the firm could be doing more. But that understanding does not automatically become institutional intelligence. Nor does giving the partner another system to update solve the problem. The more interesting opportunity is to reduce the effort required to recognize and act on what the firm already knows.
Imagine a lawyer preparing for a client meeting and being able to understand, without conducting an hour of research:
● who at the firm has the strongest relationships with the client;
● which matters the firm has handled and where it has particularly relevant experience;
● what marketing or engagement activity has recently occurred;
● what open opportunities or client initiatives are underway;
● where relationships may be concentrated or weakening; and
● what reasonable next actions the lawyer should consider.
AI can make that experience dramatically easier. But AI is most valuable here as part of a broader client engagement strategy, not as a replacement for one. The objective is not simply to generate another summary. It is to help the firm move from information to intelligence to action.
The AI Efficiency Trap
This is why I believe firms should think about the return on AI more broadly than hours saved. Efficiency matters. There is enormous value in eliminating low-value work and allowing lawyers to operate at a higher level. But efficiency is only the first-order benefit. The second-order question is what the firm does with the capacity it creates.
If a lawyer saves two hours preparing a first draft, does that simply become two fewer billable hours? Or does some of that capacity allow the lawyer to spend more time understanding the client’s business, developing the relationship, identifying an emerging need, mentoring a colleague, or improving the outcome? Those possibilities are not automatic. They require firms to think deliberately about how practice efficiency, client value, and business growth connect.
I would describe the opportunity in three dimensions:
1. Efficiency growth: reducing the effort required to perform and deliver high-quality legal work
2. Relationship growth: using better intelligence and greater capacity to deepen client understanding
3. Business growth: converting stronger relationships, better experience intelligence, and earlier opportunity recognition into retention, expansion and new revenue
The mistake would be to pursue the first while assuming the other two will follow naturally. They may not.
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From Institutional Knowledge to Earned Intelligence
The real strategic opportunity created by AI may therefore be larger than automating individual tasks. Law firms possess an extraordinary amount of institutional knowledge: decades of matters, documents, relationships, expertise, client interactions, outcomes, pitches, proposals, and accumulated professional judgment.
Historically, much of that knowledge has been difficult to access. Some live in documents. Some live in transactional systems. Some live in CRM or marketing platforms. And a great deal of the most important knowledge still lives in the memories and relationships of individual lawyers. AI makes it increasingly possible to bring these signals together and make institutional knowledge usable in the moment.
This is where Earned Intelligence becomes important. Earned Intelligence is not simply data, and it is not something a firm can buy off the shelf. It is the accumulated intelligence created through real legal work, client relationships, experience, workflows, outcomes, and professional judgment made more valuable when those signals can be connected and acted upon.
A firm’s competitive advantage will not come from access to a general-purpose language model. Increasingly, everyone will have access to capable models. The differentiator will be what surrounds those models: the firm’s own experience, relationships, workflows, context, judgment, and trusted data.
And technology providers serving the legal market, the same principle applies. The value is not simply access to AI, but the depth of legal workflow knowledge, trusted data, and accumulated context that has been built over time. That is where Litera’s 30 years of experience across the legal workflow matter. It creates a foundation of Earned Intelligence that cannot be replicated simply by connecting a new interface to a general-purpose model.
The opportunity is to combine that accumulated legal intelligence with each firm’s own institutional knowledge so that every matter can make the next pitch smarter, every client interaction can improve the firm’s understanding of the relationship, and every piece of experience can become easier to find and reuse. Every lawyer can then benefit from knowledge that previously belonged to only a handful of people. That is a much more consequential use of AI than simply making an existing task faster.
Connecting the Practice and Business of Law
This is what connecting the practice and business of law should mean: not one application doing everything, not another technology layer for lawyers to manage, and not the assumption that AI will somehow connect the dots on its own. It means creating a connected intelligence environment in which the work the firm performs contributes to the intelligence the firm can use to serve clients, strengthen relationships, and identify what comes next.
A matter creates experience. Experience strengthens credibility. Relationships create context. Marketing creates engagement. Business development turns signals into opportunities. Great client service strengthens the relationship and generates the next opportunity. The value comes from connecting that cycle.
When those signals remain isolated, firms leave much of their institutional knowledge untapped. When they are connected, AI can help make that knowledge easier to access, interpret, and act upon.
The Conversation at ILTACON
I expect much of the conversation at ILTACON this year to focus, understandably, on what AI can do next. The more important conversation may be about what firms choose to do with it. The question is no longer simply whether AI can make lawyers more productive. We already know that it can.
The strategic question is whether firms can translate that productivity into greater client value and sustainable growth. Doing so will require the industry to stop thinking about the practice of law and the business of law as completely separate challenges. AI has the potential to make both sides smarter and easier, but only when firms intentionally connect them.
The firms that do this well will not simply be faster. They will be better at understanding their clients, better at mobilizing what their firm knows, and better at turning Earned Intelligence into action. And ultimately, that is where the real return on AI will be found.
Speak with Litera at ILTACON by scheduling a meeting here.
Discover how Litera is unifying the practice and business of law by talking to a solutions expert here.
Bob Beach, Senior Director, GrowthTech Evangelist, Litera.
Bob focuses on helping law firms modernize the way they manage relationships, develop business, and deliver client value. Working at the intersection of client needs, market trends, and product innovation, Bob collaborates with law firm leaders around the world to understand how changing client expectations, data, relationship intelligence, and AI are reshaping the future of growth in professional services.