One of the world’s largest law firms has outlined its post-merger plan for AI, including a board focused on AI and using software from start-ups Harvey and Legora, alongside in-house technology.
Hogan Lovells Cadwalader (HLC), formed in July through the $3.9bn merger between Hogan Lovells and Cadwalader Wickersham & Taft, said its use of AI was entering a new phase.
“Our combination… presents an opportunity to expand upon our existing investments, accelerate innovation and deliver greater value to clients,” said Paul Otto, HLC’s newly appointed managing partner for legal technology and AI, in an interview with Global Legal Post.
Otto, previously a partner in the firm’s global regulatory practice, added: “This strategy brings together our technology, people and commercial capabilities under a clear framework for the future.”
The AI plan includes launching an AI board to evaluate ideas across the firm for using AI to improve legal services. It will decide whether AI tools should be built internally or externally, allocate resources and oversee their development and use.
It has also appointed former capital markets lawyer Oliver Campbell as chief transformation officer, who brings 15 years’ experience helping law firms modernise legal and business services, HLC said.
In addition, it has created a new commercial unit bringing together client delivery, pricing and legal project management, as well as signing software agreements with Harvey and Legora, two of the biggest legal AI start-ups.
HCL’s tech unit – Eltemate – will continue to build proprietary technology for its lawyers and clients.
The plan is the latest example of how large law firms are trying to embed AI into their organisations and overall strategy, in the hope of boosting growth, encouraging innovation and improving client service.
Firms’ approaches vary, including building their own AI platforms, co-developing software with AI start-ups or running tech incubators for start-ups.
Otto, who has advised on AI, cybersecurity, data, technology and digital risk, said a “multi-platform” approach to AI made sense.
“It would be difficult for any single AI platform to meet all client needs,” he said. “Harvey and Legora both offer key capabilities, and having access to both gives us greater flexibility to deploy the right technology for different tasks and workflows, consistent with client needs and preferences.”
He added: “We’re not approaching this with a predetermined split between internal and external technology.”
Legaltech experts said HLC’s creation of a commercial unit for AI within the law firm was notable.
“The interesting part here is the commercial unit,” said Alex Baker, founder of Legal Tech Collective, a consultancy for legaltech companies and law firms. “If a firm like [HLC] is putting pricing, project management, pitching and client delivery under one managing partner, I translate that as AI’s biggest impact is on the business of law – the economics – rather than the legal work itself.”
If a 10-hour task now takes a law firm two hours, “someone has to decide who keeps the eight hours”, he said, adding: “Stick with the billable hour and AI makes you faster and poorer. Rethink your pricing and that same efficiency becomes margin for the firm and better value for the client.”
Eventually, law firms may be able to start charging clients for technology platforms or delivering services predominantly through technology, he said.
Brian Tang, a legal technology expert and founding executive director of the Law, Innovation, Technology and Entrepreneurship Lab at the University of Hong Kong, said: “I think it is significant that the new combined firm has, within three months of their merger, come out to outline their AI strategy, new leadership roles and governance approach.”
The creation of a new commercial unit implies that HLC will be focused on new pricing, services “and maybe products involving AI to better serve clients”, he added.
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