The impact of AI on law firm revenue growth

_{Nick Morgan, Head of Legal Professionals • August 7 2024}

The key to unlocking your next revenue target? It’s data. Or more specifically, contextual data about your clients that goes beyond basic databases. While screening is part of client onboarding, it shouldn’t be the entire process. Screening provides only a surface-level understanding. You tick the KYC boxes but don’t gain real insight into your clients.

Imagine what your firm could achieve with real-time insights into your client’s business activities, their broader network, and a complete view of their online presence. With this valuable information, you could better serve your clients and uncover new business opportunities for your firm. However, this requires time and critical human resources, which most law firms don’t have. In this blog, we break down why firms need sophisticated technology to drive law firm revenue growth. 

Client onboarding is slow and expensive

PWC found that 65% of clients would rethink their choice of law firm if they have a bad onboarding experience. For the law firm, this isn’t just a missed opportunity; it’s a significant cost. This is exacerbated by the fact that law firms are losing revenue to slow onboarding times since fee-earning work is delayed. Case in point: a multinational law firm client was losing a staggering £16 million in partner fees due to slow onboarding before adopting Xapien. 

We’re also seeing it reflected on the client’s side—one in four companies have missed out on business deals because of their law firm’s onboarding process. The issue is clear: client onboarding is slow and fragmented. The process often involves too many people, using various tools and buying different subscriptions. This just drives up costs even more.

AI-powered onboarding tools transform the process in two major ways. First, they eliminate the waiting period for clients. Typically, clients have to wait around a week for an analyst to review them—sometimes even 10 days, as with one of our law firm clients. Since introducing an Initial Due Diligence workstream with Xapien, it takes less than a day. Low-risk clients that need minimal oversight can often be cleared in the same week. 

Second, automation tools drastically reduce the time spent gathering and analysing data for the firm’s AML analysts. What used to take anywhere from a few hours to half a day—sometimes even longer for complex cases—is now handled upfront with AI. This means that law firms can quickly triage clients based on their risk level, rather than everyone getting the same intense scrutiny and depth of due diligence. 

How clients purchase legal services is changing

Clients are becoming more selective and strategic about how they purchase legal services. They’re not just hiring a law firm on a general or ongoing basis but are instead buying specific legal services as needed. Not having a client on a long-term basis means missing out on a deep, ongoing understanding of their business.

Traditionally, getting to know a client requires extensive manual research during the onboarding process. But what if you had the tools to gather these insights right from the start? Whether you’re onboarding a client for a one-off project or a long-term relationship, the technology available to your intake team can provide crucial insights within minutes. 

These insights not only help to better understand the client’s unique needs but also reveal new opportunities for additional work. A McKinsey study found that a well-executed onboarding process can improve customer satisfaction by up to 30% and increase cross-selling opportunities by up to 20%. When clients feel truly understood, relationships strengthen, and they’re more likely to recommend your firm to others in their network.

Start billing clients faster with AI

Lawyers only bill around 2.6 hours of their work, with the rest consumed by non-billable tasks like onboarding checks. AI significantly reduces the time and resources spent on due diligence, so fee-earners can shift their focus to more valuable work. This improves efficiency and influences law firm revenue growth.

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