• 89% of law firms are already utilising Artificial Intelligence or have imminent plans to do so
  • 61% of firms have adopted an agile working policy - a doubling over 12 months
  • 98% of firms do not expect Brexit to have a significant impact on their London business

Nearly half (48%) of London law firms are already utilising Artificial Intelligence (AI) and a further 41% have imminent plans to do so, according to a survey of over 100 law firms from CBRE, the world's leading real estate advisor.

Of the firms already employing AI, 63% of firms are using it for legal document generation and review, and the same proportion for e-discovery. Due diligence (47%) and research (42%) were also common applications, along with compliance and administrative legal support (each 32%).

The use of AI will affect employment levels, with the greatest impact predicted at the junior and support levels, where nearly half (45%) of firms believing that there will be a reduction in headcount. In contrast, only 7% of firms believe that senior headcount levels will be reduced.

As far as agile working is concerned, there are clear signs that the traditional partner’s office culture is declining among law firms, with 33% now in more open or activity based working environments. This figure is likely to increase, particularly amongst UK law firms.

Frances Warner Lacey, Senior Director, Central London Tenant Advisory Group, CBRE
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.

We expect the proportion of firms engaging in activity-based agile working environments to increase in the coming years. Compared with some other professional services businesses, such as consulting firms, the legal sector has been slow to adapt to agile working, but this is changing. Of the firms surveyed, 61% have now implemented agile working policies – a doubling since last year’s report. 
Frances Warner Lacey, Senior Director, Central London Tenant Advisory Group, CBRE

In spite of speculation about businesses moving away from London following the EU Referendum, the study indicated that the vast majority of law firms (98%) expect no impact on profitability as a result of the referendum.

In total, the CBRE Legal 100 occupy almost 10 million sq ft, spending a total of £495m per annum on rent, up 6.2% from 2013 and representing an average of £49.41 per sq ft, compared to £43.51 per sq ft five years earlier.

Frances Warner Lacey concludes: “Along with other professional services, it is interesting to see that law firms who have traditionally been more conservative by nature, are embracing new technology and agile working as key strategies to boost efficiency and collaboration. Whilst employees do not seem in the main to object to agile working, the greatest single challenge to implementation, stated by over a quarter of respondents (27%) is resistance from senior management.

“With a number of law firms actively seeking requirements, we expect take-up of office space by law firms to be strong this year, boosted by a number of international law firms who have expanded or plan to expand their presence in London including Sidley Austin, Quinn Emanuel and Akin Gump.”