What financial services can teach law firms about AI

Artificial intelligence is prompting many law firms to ask the same question: will AI simply make legal services more efficient, or will it fundamentally change how clients access legal advice?

History suggests that technology rarely stops at efficiency. Across multiple industries, it has removed intermediaries from the value chain, forcing established organisations to rethink the value they provide.

The Lesson from Other Industries

Financial services offers a powerful example.

For much of the twentieth century, banks sat comfortably between savers and borrowers. Their position depended on specialist expertise, information advantages and control of infrastructure.

Over time, technology weakened each of those advantages. Online brokerage platforms, peer-to-peer lending and open banking gave customers more direct access to services that previously required traditional intermediaries.

The same pattern can be seen in travel, publishing, recruitment and media. Technology reduced information barriers and changed how customers accessed services.

Importantly, the most successful organisations did not disappear. They adapted by moving higher up the value chain towards advice, relationships and judgement.

Why Law Firms Should Pay Attention

Law firms have traditionally occupied an intermediary role based on three foundations:

• Specialist legal knowledge

• Professional regulation and accountability

• Judgement, advocacy and trusted advice

AI is beginning to challenge the first of these foundations and, increasingly, parts of the second.

Research, document review, due diligence, contract drafting and other routine legal activities can now be completed faster and more cheaply than traditional delivery models allow. While concerns around accuracy and reliability remain, the direction of travel is becoming increasingly clear.

The greatest risk lies in areas of legal work that are high-volume, relatively standardised and process-driven.

Where Human Value Remains

The more interesting question is whether AI will eventually move beyond routine work into more complex advisory areas.

History suggests caution before assuming clear limits. However, clients facing major strategic decisions will continue to require experienced advisers capable of exercising judgement, creativity and commercial insight.

If anything, these capabilities may become more valuable as information itself becomes increasingly abundant.

For law firms, these points towards a future centred on:

• Strategic judgement

• Complex problem solving

• Advocacy and negotiation

• Cross-border coordination

• Trusted client relationships

• Reputation and institutional confidence

These are areas where human expertise remains difficult to replicate.

A Strategic Choice

Disintermediation is rarely a single event. It is usually a gradual process that accelerates over time.

The experience of financial services suggests that the firms which thrive are not those that resist change but those that redefine where they create value.

For law firm leaders, the challenge is therefore not simply adopting AI tools. It is understanding which parts of their value proposition remain distinctive in an AI-enabled market and investing accordingly.

The next decade may determine which firms successfully reposition around judgement, relationships and strategic advice, and which continue to rely on business models that technology steadily erodes.

Paul Browne, is an associate partner at Lexington Consultants, former senior financial services executive and a Fellow of the Møller Institute at Churchill College, University of Cambridge.