In the rush to adopt artificial intelligence, many UK law firms are putting the cart before the horse. Whilst the promise of AI is undeniably exciting – with capabilities like contract analysis, due diligence automation, and predictive analytics – there’s a crucial step that’s often overlooked: data readiness.
The Current State of Play
Recent research from the Law Society paints a sobering picture. Despite 76% of UK law firms planning to increase their AI investment over the next two years, only 27% currently have the data infrastructure to support it. This disconnect isn’t just concerning – it’s potentially costly.
“We see firms investing hundreds of thousands in AI solutions, only to realise their data isn’t fit for purpose,” notes Sarah Thompson, Legal Technology Director at Thomson Reuters. “It’s like buying a Ferrari when you haven’t yet built the road.”
The Hidden Costs of Poor Data Management
The numbers tell a compelling story:
- Mid-market firms lose an average of £200,000 annually through inefficient data management
- Fee earners spend 5-8 hours per week searching for information
- 15-20% of documents are duplicated across systems
- Only 31% of firms have a formal data management strategy
Why Data Readiness Matters
Consider a typical AI implementation for contract analysis. The system needs clean, structured data to learn from. But in most firms, contract data is:
- Scattered across multiple systems
- Inconsistently formatted
- Missing key metadata
- Mixed with non-relevant documents
- Often still in paper form
Without addressing these fundamentals, AI systems will struggle to deliver meaningful results. As the old computing adage goes: garbage in, garbage out.
The Compliance Imperative
Beyond AI readiness, there’s a regulatory imperative. The SRA’s technology and innovation guidelines increasingly emphasise data governance. Poor data management isn’t just inefficient – it’s becoming a compliance risk.
Building the Foundation
So what does good data readiness look like? It requires:
1. Data Audit & Mapping
- Understanding what data you have
- Where it’s stored
- How it’s structured
- Who has access
2. Standardisation
- Consistent naming conventions
- Structured metadata
- Standardised processes
- Quality controls
3. Governance Framework
- Clear policies and procedures
- Defined responsibilities
- Regular audits
- Training programmes
The ROI of Getting It Right
Firms that invest in data readiness before AI implementation see significant returns:
- 40% reduction in document search time
- 25% improvement in cross-selling
- 30% reduction in regulatory compliance costs
- 50% faster AI implementation
Starting the Journey
The path to data readiness needn’t be overwhelming. Start with:
- Assessment of current state
- Identification of priority areas
- Development of governance framework
- Phased implementation plan
Looking Ahead
“As highlighted in the Law Society’s 2023 Technology Report, ‘Success in AI adoption correlates strongly with preliminary data readiness and governance frameworks. “The firms that will thrive in the AI era aren’t necessarily those who adopt AI first, but those who prepare for it best.”
About the Author
David Ricketts is a legal technology marketing specialist with over 20 years of experience helping UK law firms navigate technology and marketing. Andy Hawley is a legal technology specialist in legal software with a background in engineering.
References:
Law Society, “Technology and Innovation in Legal Services 2023”
Legal Services Board, “Technology and the Legal Market 2023”
SRA, “Innovation and Legal Technology Guidelines 2023”
Thomson Reuters’ “State of the UK Legal Market 2023”
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