Will law firms seize the opportunity the second time around?
Wendy Spires, Director of Privacy at Trace, explains why AI represents a business transformation opportunity for law firms and a chance to win back advisory ground from the bigger players.
Privacy and data protection represent a nexus of legal, information security, commercial and governance considerations that can be a real challenge for even the largest organisations with significant legal teams. It is no wonder then that in recent years the Big Four accounting and audit firms have launched whole departments dedicated to helping their clients grapple with EU and UK GDPR, the burgeoning list of US state privacy laws and all the other 90 or so data protection regimes now in play internationally - as well as all the other related and highly consequential legislation now swirling, most notably around AI.
But as savvy business leaders know, being large in size (and likely commensurately so on costs) doesn’t necessarily determine success when it comes to securing the right level of multi-disciplinary support your organisation needs across data compliance, security and governance. Trace’s successes as a boutique creating small but highly specialised project teams around our clients testifies to how efficient an approach this can be.
Throughout our data privacy projects we have acted as a bridge between regulators and our clients, commercial and compliance leaders, employees and managers, auditors and Boards, and internal and external legal counsel. These kinds of projects do require a degree of immersion in the clients’ operational model and value proposition. However, we believe that calling in external specialists should be an exercise in filling gaps in expertise and capacity, rather than enduring interminable rounds of diagnosing the issues. When we embed in legal, compliance and infosec teams - often on an international scale - it is to orchestrate all the parties involved and robustly push projects along. For organisations new to the technological cut and thrust, we can be a useful cultural connector too.
Early-mover advantage
We very much enjoy supporting internal legal counsel (and their external counsel) in privacy-AI-infosec matters, but we’ve also been empowered by technology to pursue bigger opportunities too.
We have partnered with law firms in the UK, EU and North America US on delivering data privacy and compliance solutions to a broad spectrum of corporate and public sector clients globally with great success; they are the legal experts and we provide the technical know-how and corporate experience specifically in this space. Data innovation, and the legislative backdrop to that, is our lifeblood, so it is only natural that we are now also working at the forefront of legaltech, bringing the same skill set and project management experience to our AI-focused collaborations with law firms and legaltech innovators. Expect to see more such partnerships looking ahead.
Today, we are urging our partners in the legal sector and their peers not to miss the chance to stake their claim to the AI space. Legislation like the EU’s AI Act are very much evolutions from GDPR and its sister regimes, and we’re hoping that those law firms which regret not capitalising on the prior data boom (and its regulatory response) won’t make this error again.
The opportunity is similarly immense for forward-thinking law firms today as it was before that seismic business change, but things are also very different this time around. With GDPR the legal expertise was available to be tapped, but there was a dearth of technological tools for law firms to leverage (Trace’s platform, aside of course). In contrast, AI has already given rise to a whole new regtech industry which leverages artificial intelligence applications like generative AI, machine learning and advanced data analytics to democratise these tools entirely.
Transformative technology
Law firms of all sizes are transforming themselves in response to the AI revolution and the rise of low-cost applications. As well as using AI to slash operational costs for themselves, we are seeing smaller but savvy law firms monetising their IP by partnering with regtech providers to create AI-enabled decision engines and innovating in legaltech in lots of other exciting ways we will describe further in the months to come.
Perhaps most exciting of all, and to bring us full circle, is an interesting trend of mid-tier law firms gaining ground back from the Big Four in the privacy-AI-infosec space. The bigger brands might be known for their huge budgets and integrated services, but there is no reason that nimbler legal practices cannot counter this with an equally comprehensive, but more technologically advanced and client-centric suite of legal services.
The benefits of AI span enhanced efficiency, accuracy and predictive analytics, all of which translate into the delivery of superior legal and corporate advisory services at lower effort, costs and risks. Mid-tier firms which recognise that fact now have a once-in-a-generation opportunity to revolutionise their business models through AI.
Interested in how Trace can help your team with AI governance , pragmatic DPO services or privacy tech implementation solutions? Book your free consultancy call here.