Generative AI (“GenAI”) is no longer just a buzzword – it might be the future of the legal profession. From drafting contracts to streamlining research, AI tools are changing the daily reality of fee earners. But with opportunity comes risk. This article examines how GenAI may transform the legal profession, the commercial and ethical concerns that accompany it, and what firms can do to adopt the technology responsibly.

What is Generative AI and why does it matter to law firms?

Generative AI (“GenAI”) is an umbrella term that describes tools that produce responses to prompts, information, or datasets provided. A Clio study estimates that 81% of administrative billable work, and 57% of billable work conducted by lawyers, could be automated. With a large percentage of tasks being automated, this would inevitably help increase the firm’s efficiency and reduce the client’s overall cost.

Several companies have developed GenAI tools, specifically to help automate tasks in the legal profession. Products like Harvey AI, CoCounsel, and LexisAI aim to make the legal profession more efficient by saving lawyers’ time, whether that be reducing time spent on legal research, drafting contracts, or reviewing documents.

Reducing the time spent on traditionally lengthy, billable tasks could result in potential reductions in overall revenue. The question is, how can law firms use GenAI to generate more revenue, rather than reduce it?

Turning efficiency into revenue – how GenAI can drive growth

For law firms, the real question is not whether generative AI can save time, but how those efficiency gains can be translated into sustainable revenue. Research suggests automation could free up four to five hours per week per fee earner – the equivalent of more than 30 working days a year. Thomson Reuters estimates this could generate up to $100,000 in additional billable value per lawyer. The opportunity is clear, but success depends on how firms choose to deploy the time saved.

GenAI offers three principal routes to increasing revenue:

1. Charging a premium for efficiencyTraditionally, hourly rates have reflected the work of the human lawyer alone. With AI augmenting human expertise, firms may justify higher fees per unit of time, particularly where matters are resolved faster and with no reduction in quality. Clients gain from lower overall costs and quicker outcomes, while firms can strengthen their profitability.

2. Focusing on higher-value workRoutine tasks once occupying significant billable hours can now be delegated to AI. This enables fee earners to dedicate more time to complex strategy, nuanced problem-solving, and creative legal solutions.

3. Releasing time for business developmentPerhaps the most transformative impact lies in how freed-up time can be reinvested. Business development – building relationships, identifying client needs, and securing future work – is often squeezed by the demands of day-to-day case management. GenAI allows fee earners to redirect time into client engagement, fostering long-term value for both clients and the firm.

By combining these approaches, law firms can do more than simply recover lost billable hours – they can redesign their business models to reflect time multiplied by quality. The challenge is ensuring that fee earners adapt their roles: not only reviewing and verifying AI outputs, but also embracing tasks like effective prompt design, strategic client engagement, and the delivery of consistently higher-value services.

The Risks – hallucinations, ethics, and regulation: the AI Mirage

One of the most pressing concerns with GenAI in the legal profession is the risk of “hallucinations” – instances where the system generates information that is plausible but false, misleading, or entirely fabricated. This is not a minor issue: reliance on such errors can expose lawyers to professional and reputational risk.

Most GenAI providers include disclaimers emphasising that their tools are not substitutes for qualified legal expertise. The onus remains on the lawyer to verify any outputs before relying on them. If a fee earner presents false citations or inaccurate content produced by AI, they – not the tool – are accountable, and could face professional sanctions.

The UK High Court has already highlighted this danger. In two recent cases involving AI-generated false citations, the Court warned that where such material is submitted, it will “inquire whether those leadership responsibilities have been fulfilled.” The clear message is that blind reliance on AI is incompatible with professional obligations.

Beyond hallucinations – broader risks

While hallucinations are perhaps the most visible concern, firms must also grapple with wider issues:

• Ethics and confidentiality – feeding sensitive client data into third-party systems could breach duties of confidentiality and privilege.

• Regulation – the SRA Code of Conduct and Bar Standards Board both emphasise the need for competence and careful supervision of tools.

• Client trust – reputational damage may follow if firms adopt AI without robust oversight.

GenAI: The real deal

Despite these risks, the potential benefits remain significant. Evidence suggests that human–AI collaboration outperforms working alone. In July, legal-tech start-up Eudia tested its system with 300 human legal experts and concluded that “the combined efforts of the fee earner and the technology will always outperform an expert human without that solution, or that solution without the expert human.”

The lesson is clear: the key to maximising efficiency lies in the partnership between lawyer and machine. For firms, this means recognising that certain tasks – reviewing AI outputs, designing effective prompts, and verifying accuracy – are themselves high-value activities. Done well, they not only safeguard against risk but also allow fee earners to reclaim time for more complex, billable work.

A new skillset for fee-earners

To use GenAI responsibly and profitably, lawyers will need to:

• Review and verify all outputs.

• Develop effective prompts to ensure quality results.

• Implement safeguards to detect and correct errors early.

• Allocate saved time to higher-value, client-facing work.

Handled this way, GenAI does not replace expertise – it amplifies it.

Conclusion; Gen AI – transformation, not extinction

GenAI is set to transform the fee earner, not eliminate them. By combining human expertise with AI’s speed and processing power, firms can raise the value of each billable unit, complete more work, and strengthen client relationships.

The competitive advantage will lie with firms that:

• Pilot AI tools responsibly.

• Train staff in prompt engineering and oversight.

• Establish governance frameworks to mitigate risks.

• Communicate transparently with clients about AI use.

The question is not whether AI will change the legal profession, but how quickly firms can adapt. Those who embrace GenAI responsibly will be well-placed to attract business, deliver value at pace, and build stronger client trust in a digital era.