Half of London's biggest law firms believe artificial intelligence tech will lead to job cuts
Law firm real estate report finds finds concerns over AI impact as firms shrug off Brexit blues
April 24, 2018 at 04:31 AM
5 minute read
Almost half of the largest law firms in London are expecting to see job cuts as a result of the increasing use of artificial intelligence (AI) technology, according to new research.
Between 43% and 45% of law firms surveyed by commercial property company CBRE said they believed there will be a reduction in headcount at junior and support levels due to firms' adoption of AI, with 5% of respondents saying they expect cuts of more than 20%.
The finding is part of CBRE's annual report on law firm real estate in London, which surveys those with the largest footprint in the capital.
Of the firms surveyed, 89% either use AI already or plan to do so in future. Sixty-three percent said they use AI for legal document generation and review or e-discovery, with 47% using it for due diligence and 42% for research.
While job cuts spurred by the increased take-up of technology are likely, Kennedys innovation head Richard West suggested these roles could be replaced by new positions within law firms. "The question of how headcount will be affected is complex and, of course, technology is likely to result in attritional work and roles falling away from the traditional legal services model," he said.
"However, it is too early to say that there will not be other roles to replace them. New roles are developing as technology encroaches on the attritional space. They include data scientists, those working on AI and predictive analytics, as well as legal services software developers."
Frances Warner Lacey, senior director in the central London tenant advisory group at CBRE, commented: "Our study found considerable uncertainty around the impacts of AI on employment, reflected by over 30% who were unsure of the potential impact at each level. This will make formulating a dynamic real estate strategy, to cope with these structural changes to the sector, particularly problematic for law firms."
The report found that office take-up by the legal sector in 2017 was 21% below the 10-year average at 592,100 sq ft, despite high-profile deals such as Freshfields Bruckhaus Deringer's 255,000 sq ft pre-let for its new London headquarters at 100 Bishopsgate.
In contrast to the widespread concerns over the impact of AI, the majority of firms surveyed for the report said the UK's exit from the European Union would have no effect on headcount or profitability. Seventy-two percent said Brexit would have no impact on employment levels, while 59% were confident that it would have no impact on London profitability, and a further 36% said it would only have a minor impact.
Despite a number of major firms – such as DLA Piper and Pinsent Masons – looking towards Ireland as a Brexit hedge, 70% of firms said they had no contingency plan to relocate businesses from the UK to elsewhere in Europe due to Brexit. Only 16% said they were aware of their firm having such a plan in place,
The report also found that agile working policies have doubled in take-up since last year, with 61% of firms having adopted an agile working policy this year, compared to 30% in 2017. Ninety-seven percent of respondents said their agile working policies allowed staff to work from home, with 82% providing the technology to enable them to work away from their desks.
DAC Beachcroft managing partner David Pollitt, whose firm is currently seeking new office space, said he plans to introduce an "agile platform", a move he says is about establishing a modern way of working that "creates a space that belongs to everybody, not individuals".
He said: "Gone are the days that people want a space of their own in a firm's office. Agile working is about having a modern, flexible environment where people are not chained to a desk. It creates a far better working environment and there is also a wellbeing factor that should not be underestimated."
The report also ranked the top 100 firms in London based on their floorspace in the capital, with Clifford Chance and Allen & Overy leading the table. Magic circle firms Linklaters and Freshfields placed third and fourth, with Herbert Smith Freehills, Hogan Lovells, Slaughter and May and CMS Cameron McKenna also appearing in the top 10.
In total, these 100 firms occupy almost 10 million sq ft, and spend a total of £495m per year on rent, up 6.2% from 2013. The average cost of real estate per sq ft has risen almost 14% from £43.51 five years ago to £49.41 this year.
Click here to download the full report.
- Artificial intelligence will be under the spotlight at this year's Strategic Technology Forum, which will take place in Italy this June. Other subjects on the agenda include the law firm of the future, the war for tech-savvy millennial talent, and how to react to a public hacking. Click here for more information.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllThe EU Top 30, 2024: Ranking the Largest Law Firms in the European Union by Headcount
5 minute readDavis Polk Veterans Launch M&A, Private Equity Boutique in France & Italy
2 minute readFreshfields Advises Troubled Chemical Giant BASF on €6 Billion Loan Refinancing
2 minute readTrending Stories
- 1Infant Formula Judge Sanctions Kirkland's Jim Hurst: 'Overtly Crossed the Lines'
- 2Abbott, Mead Johnson Win Defense Verdict Over Preemie Infant Formula
- 3Guarantees Are Back, Whether Law Firms Want to Talk About Them or Not
- 4Trump Files $10B Suit Against CBS in Amarillo Federal Court
- 5Preparing Your Law Firm for 2025: Smart Ways to Embrace AI & Other Technologies
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250