Private equity law firms are pivotal in driving the adoption of AI within the PE industry. However, they face a unique dual challenge of incorporating AI into their own operations while also guiding PE clients through the implementation process.
While AI adoption in the legal industry is still in its early stages, BigLaw firms are already making significant strides by focusing on efficiency, cost reduction, and generating greater value for clients. By using AI to automate and streamline the most manual and routine parts of the law firm’s workload, lawyers are reclaiming valuable time for more strategic work.
Law firms for private equity are also a driving force in helping private fund advisers implement AI tools safely and confidently by understanding the technology’s benefits, risks, and regulatory landscapes for their clients.
The AI adoption curve is ramping up at law firms
In Thomson Reuters’ 2025 Future of Professionals Report, 80% of the legal professionals surveyed said AI would have a transformative or high impact on the profession — more than the explosion of data, regulatory changes, or the economy. Fifty-three percent already believed their organization was experiencing at least one benefit from AI.
While many surveys and statistics show how law firms and in-house legal teams use AI, it’s impossible to settle on a realistic figure for their adoption rate. In all likelihood, adoption is currently similar to the customary tech adoption curve.
That’s not to say AI adoption will always follow a traditional bell curve. In 2023 and early 2024, many law firms were cognizant of the risks but willing to explore new AI vendors and tools. Experts believe that adoption will move swiftly as generative AI (GenAI) capabilities advance dramatically in weeks and months instead of years.
In another Thomson Reuters report, ChatGPT and Generative AI within Law Firms, Jason Adaska, Director of the Innovation Lab at U.S. law firm Holland & Hart, said: “The biggest delta I’ve seen is just people understanding that the realm of the possible has sort of shifted in a monumental way.” He added that this means GenAI education has become critical. “Strategically, the most important thing for the firm and our department is to put resources out there.”
In another indication of AI’s growing importance, some BigLaw firms are now training summer associates on GenAI. Bloomberg Law reported that K&L Gates, Dechert, and Orrick Herrington & Sutcliffe have all incorporated AI training into the 2024 summer associates class, which includes teaching them how to use AI research and chatbot tools.
“That’s the whole idea about the training program: You need to teach people how this is going to impact the way they come to work,” Brendan McDonnell, a K&L Gates partner and member of the firm’s AI solutions group, told Bloomberg.
Why PE firms expect law firms to be trusted AI advisers
AI’s transformative potential means a law firm’s AI strategy should align its services with its clients’ needs and strategies. For several reasons, private equity firms are looking for law firms to be strategic partners in adopting generative AI.
1. Undeniable efficiency gains
GenAI solutions can automate repetitive tasks like due diligence document review, speeding up deal processes and saving time for both lawyers and PE professionals. Many private fund advisers are feeling the pressure of heightened scrutiny from both the SEC and LPs. Meanwhile, operating costs are also rising, driving advisers to look for ways to maintain or cut spending.
AI cannot replace experienced attorneys in providing complex legal services to PE clients, but it can serve as a valuable tool for augmenting legal professionals’ capabilities and improving overall efficiency.
When law firms drill down, efficiency is a matter of speed and convenience for their clients. PE firms want their law firms to perform tasks faster and with less lift on their part. AI tools could enable law firms to reduce the turnaround times on routine, repetitive tasks while limiting the input they require from their clients.
2. Greater value
Given how much private fund advisers invest in their relationships with outside counsel, advisers expect the firm to continuously provide value. The priority here is for the law firm to deliver value above what the AI tool offers. While AI will benefit clients by streamlining low-level tasks and reducing the law firm’s fees associated with those tasks, what new strategic work or expertise can the law firm provide to add value? For many lawyers, this is an exciting opportunity rather than a concern.
3. Enhanced deal analysis and deeper insights
AI tools can analyze vast amounts of data to identify potential risks and opportunities in deals that lawyers might miss. With a more comprehensive view of a deal, PE firms can make more informed investment decisions.
4. Deliver differentiated value and a competitive advantage
Law firms that demonstrate expertise in AI are likely to be seen as more innovative and attractive partners by PE firms. By leveraging AI, law firms can offer PE firms a unique value proposition that goes beyond traditional legal services.
According to Thomson Reuters’ 2023 Future of Professionals Report, 40% of legal respondents said their top goal for AI is to free them to focus on higher-level tasks — like structuring complex transactions, tax planning and structuring, and dispute resolution — and ultimately delivering superior value to their clients by removing mundane tasks from the law firm’s workloads.
BigLaw’s approach to AI implementation
While AI has tremendous potential for all law firms, BigLaw is where we’re already seeing significant moves in AI experimentation and implementation. Many global firms have developed specific practice groups dedicated to AI, technical innovation, and data analytics. Some firms have spent the last few years hiring data scientists and tech-savvy lawyers. A few have developed AI tools in-house with varying degrees of success
According to a recent Thomson Reuters Report, Stepping into the future: How generative AI will help lawyers improve legal service delivery: “Some tasks will be automated, but the fundamental transformation will be how legal work is reimagined and improved. AI presents an enormous opportunity for legal because so much of what lawyers do today can be further enhanced with AI, and client outcomes can be improved.”
While many large, global law firms see AI’s potential benefits, some concerns remain about accuracy, data privacy, and ethics. Overall, law firms are interested but still figuring out how GenAI can fit into their practices.
GenAI tools can’t perform legal analysis for clients, but they can analyze language to provide draft documents or answer questions. Don’t expect GenAI to fully interpret and apply the law to a client’s unique circumstances just yet.
“What lawyers are finding is it can automate commodity low-rate work because there wasn’t a budget to do that kind of work,” said David Cunningham, Reed Smith’s Chief Innovation Officer for The American Lawyer, We Asked Every Am Law 100 Law Firm How They’re Using Gen AI. Here’s What We Learned. “We’re spending the same amount of time on the matter, but we can automate some work. We can dig deeper into issues. And then the lawyer is able to spend more time on the higher-value work for the client. We’re seeing it more as a quality play for us. Lawyers can provide more value for the same amount of time.”
Leverage industry-specific technology partners
BigLaw firms can find excellent partners in technology providers, particularly those focused on creating purpose-built solutions for private markets. The right technology partner can guide law firms and their clients toward the best tools for particular use cases and business needs.
Ontra maintains close relationships with the private markets’ go-to law firms. If your firm is ready to learn more about private markets technology and GenAI, contact us today.
