Thoughts on Managing the AI Transformation

Over the last nine years, during which I served as Cleary Gottlieb’s Managing Partner, there have been significant, often unexpected, changes in global politics, global markets and the legal industry.

But the artificial intelligence (AI) transformation that is on the horizon is likely to have a more significant, and lasting, impact on lawyers and law firms, how they deliver services and how clients consume them than any of the changes that I experienced during my tenure.

This article offers some thoughts on the adoption of AI by law firms and other organizations, focusing on the institutional and cultural changes that will be a part of the successful navigation of the impending transformation.

• Build Windmills: “When the winds of change start to blow, some people build walls and others build windmills.” This ancient proverb has great resonance for all businesses facing the implications of AI for their operations, customers and people. The opportunities created by this technology will be enormous. But effectively capitalizing on those opportunities will require affirmatively embracing these winds of change and finding ways to harness the opportunity rather than ways to protect preexisting business models or functions. This mindset can be difficult to embrace at a personal and organizational level, especially for those that have been very successful in their current structures and roles. AI leadership requires framing technological change as an opportunity to build windmills, and building the internal capabilities to design and build them.
• Embrace a “Fail Fast” Approach: One of the challenges of adopting AI broadly within an organization is the rapid—hypersonic—pace at which new AI platforms and tools are being introduced, and at which those platforms and tools are improving. This proliferation of available technology can create confusion and a sense of personal and organizational “overwhelm.” It is difficult to keep up on the latest tools, or the way in which a tool introduced to the market six months ago may have been overtaken—or may have surpassed—by other options. Onboarding new tools can be time consuming, particularly given the information security and related concerns that must be addressed. Training people to use the tool, and developing mechanisms to monitor usage and provide ongoing support across an organization, requires time and resources. All of this can lead to a (very understandable) desire by leaders to make a product selection and commit to it; to do otherwise risks internal confusion and a perception that leadership lacks an “AI strategy.”
  
  My suggestion is to avoid fully locking into a particular tool or platform as long as you can. We are too early in the AI transformation to make long-term decisions, and unless organizations remain open to shifting focus and resources they risk reliance on technology that quickly becomes “outdated.” The present moment in the AI transformation calls for a “fail fast” approach. Encourage your teams to try tools and products, declare “failure” quickly and move on (including returning to a previously failed experiment if or when there has been an advance that justifies it). “Failing fast” is easier said than done, and the mentality is generally associated with start-ups rather than large, established businesses. It can be a difficult mindset to adopt in profit and success driven cultures. But recognizing and embracing the fact that we are in the very early days of the AI transformation will help organizations of every size navigate the pace of change we are experiencing.
• Rethink Your Success: History is littered with examples of highly successful organizations that experienced rapid declines when faced with significant changes in the landscape. (Think Kodak vs. Canon, Blockbuster vs. Netflix or BlackBerry vs. iPhone.) The most abrupt of these declines occur when highly successful organizations do not anticipate or embrace the need to change until it’s too late. They become victims of their own success, losing their position to “upstart” competitors for whom a fundamental shift in approach is appealing precisely because it’s the best way for them to challenge larger, more established rivals. The AI transformation calls for law firms and other businesses to peel back their currently successful models and ask themselves “what business are we in?”—not how they do things today, but fundamentally what is their purpose from the point of view of their customers/clients. Having an understanding of these “first principles” helps focus on what changes are likely to be desirable or required as AI permeates organizations across the economy.
  
  When we launched ClearyX four years ago,[1] we started with an intentionally provocative mission statement: “let’s imagine the business that puts Cleary out of business, and try to build that business.” Now, Cleary is not at meaningful risk of going out of business. But we, and every organization, should be thinking about how Gen AI could put them out of business and what they can do about that and how that can lead to change and growth.
• Recruit and Train for the Future, Not the Past: Law firms, and many other businesses, depend on their ability to train their people to do things that they haven’t likely done before. This training focuses on substantive knowledge, as well as written and verbal communication, time management, team management, client management and many other skills that underpin professional excellence. Much of this training has long relied on an “apprenticeship” model in which junior professionals spend time with more senior people, performing supporting (and sometimes mundane) tasks. The combination of exposure to basic tasks and to senior professionals creates opportunities for learning through feedback and observational “osmosis.” The AI transformation requires a reexamination of training models. Senior professionals will need to set aside their “nostalgia” for their own developmental experiences, and focus on training the next generation for what will best equip them to be successful over the long term. This is true not only for training but will mean a broader reexamination of how work is done.
  
  What will be the attributes of highly successful senior professionals 10-15 years from now? I think the answer lies largely in the contrast between what AI will be good at, and what it will not. There is little doubt that AI will excel at “working memory” (for example, updating a checklist), or analysis and summarization of documents and information (without regard to volume), and it will have endless stamina, never tiring even after multiple “all-nighters.” But senior professionals will excel at understanding situational dynamics, empathetic counseling and creating positive interactions that are at the heart of building team and client loyalty. Recruiting, training and rewarding people for these skills and attributes should shift to the center of all “talent” businesses.
• Root Change in Your Organization’s Culture: The changes that will be required of individuals and organizations to successfully adopt AI can seem daunting, and may lead to a degree of “paralysis,” particularly in areas where the technology shows (for the moment) limitations in capabilities or its implications for business models remain difficult to fully predict. For leaders, it will be important to remind key stakeholders that changes—whether triggered by technological advances or by changes in market environment—are not new. All successful organizations that have been around for more than a decade have experienced such changes, and the fact that they continue to thrive is testament to their ability to adapt. Rooting the discussion about AI in an organization’s positive cultural attributes—the ability to adapt, openness to learning and development, self-confidence and courage—will be key to managing expectations and mindset for the AI transformation. At Cleary, we are also rooting our AI adoption in our commitment to excellence. We articulate our purpose as an organization as collaborating to deliver excellence to our clients and each other. Embedding AI across everything that we do will increasingly be at the core if we achieve that purpose. Much of the public discussion of the power of AI focuses on its ability to accomplish tasks “faster, cheaper and better.” For us, faster and cheaper are important, but “better” is paramount.
• People, Not Machines, Drive Success: There’s a lot of speculation about AI replacing people in organizations, and there’s no doubt that some of this will happen. But I expect that for many organizations, the larger shift will be in what people are asked to do (and accordingly what types of experience and expertise are valued). This will pose some particular challenges for lawyers, who have ethical responsibilities and client expectations relating to the quality, suitability and judgment in providing legal advice. The work performed by lawyers will be substantially augmented by technology, and many of the “building block” tasks underlying legal advice will be replaced by AI. Technologists, data scientists and other professionals will become increasingly important in client relationships and within law firms and legal departments. Successful law firms and legal departments will deploy a broad range of skills and tools, and will need to think holistically about what their clients need and how best to deliver it. But the fundamental core of advising clients on legal issues will remain a human endeavor, and success will be driven through the quality of human interactions. Other organizations will see the same pattern in their businesses: the nature of the work may change but the need to deliver quality services (internally and externally) will remain the paramount driver of success and determine the best use of the technology.

[1] See our June 2022 ClearyX announcement here.