KPMG, one of the Big Four consultancy firms, plans to assert its position in the legal market by investing heavily in artificial intelligence (AI) tools. Stuart Fuller, the head of legal services at KPMG, has revealed that the firm’s capital allocations for developing technology-enabled solutions and investing in AI will reach into tens of millions of dollars.
Fuller emphasized the core differences between Big Law firms and the Big Four, notably, the latter’s receptive organizational structure that allows considerable investment in their own business units. With revenues tallying up to $36 billion last year, KPMG demonstrably has the financial resources to enable such an investment, dwarfing the revenues of even the world’s largest law firms reported.
According to Fuller, KPMG’s investment in AI technology will eventually automate many tasks traditionally assigned to junior lawyers, potentially disrupting conventional law firm business models. In November, KPMG announced a partnership with Microsoft to apply its advanced AI expertise for corporate legal departments.
AI’s generative capabilities can handle certain legal work faster, more accurately, and at a lower cost – a synergy that could have a transformative effect on the conduct of legal proceedings, Fuller says. Use cases primarily discussed among clients include applications in legal research, document summarization and drafting, as well as information extraction.
In conjunction with this technological transformation, Fuller predicts the market will soon consolidate around a few AI technology providers. Success may hinge on managing historical, internal data like archived advice from law firms, which then can be put to use by these AI tools.
Despite its advanced tech push, KPMG still entrusts the future of its practices to the hands of its flexible and perceptive employees who anticipate the evolution of the field. The firm’s continual growth strategy, among other factors, had elevated the revenues of KPMG Law by 10% to 15% in the past year alone.
The potential for a rehash of the traditional business model has been envisioned before but has yet to actually occur, Fuller highlights. Where difference lies this time is, he says, the pressures from clients for cheaper and more efficient services served by AI could impose stress on the traditional billable hour model. This dichotomy between law firms’ desire for returns on technology investment and clients’ anticipation of cost savings forms the next battlefield – and opportunity – in the legal sector.
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