Is your firm set up for true collaboration in the age of AI?

Law firms must ramp up in-firm collaboration and rethink their core value-creating activities as AI advances present opportunities and risks, writes Joel Barolsky.

In short:

• Greater cross-firm collaboration will be required within law firms as they seek to respond to technology advances and rethink functional areas within the business.
• Traditional structural boundaries within firms may have to be broken down to ensure that they can respond to the challenges and opportunities of generative AI and other technologies.
• Strategic reviews of larger firms as they grapple with AI are likely to be complex and politically charged.

 “AI’s first casualty in law isn’t jobs — it’s learning. Firms that rethink professional development will own the future; the rest will pay an invisible attrition tax.” – Professor Josh Kubicki, June 2, 2025

Josh Kubicki’s statement begs the question: if AI delivers on its promise, what other areas in your firm will need a substantial rethink?

One way to address this question is to go down the list of functional areas and flesh out the implications of generative AI for each. So…

• For finance – introduce new non-time-based KPIs on firm and practice team dashboards
• For marketing and business development – assist with offering clients new AI-enabled services and products
• For HR – rejig competency frameworks and run an upgraded portfolio of programs around digital fluency and change readiness
• For pricing – support a range of new hybrid pricing models that combine traditional structures and new non-time-based fee arrangements
• For risk – rewrite manuals to incorporate AI governance and ethical practice
• For operations – manage a much bigger toolbox to redesign workflows and leverage legal and client knowledge
• For IT – license and roll out a suite of new AI applications.

The problem with this conventional approach is that it still defines each of the functional areas as distinct areas with defined ‘boundaries’ of responsibility. HR has its patch, finance has its, and so on. These structural boundaries may be a constraint to true collaboration in dealing with the profound challenges and opportunities presented by this new technology.

So, for example, rethinking professional development will involve HR’s learning and development specialists, but it also needs to include legal practice teams, IT, legal operations, pricing and even marketing and business development. This requires cross-firm collaboration at a much deeper level than what’s been needed to date.

Looking ahead, Gen AI may require firms to fundamentally rethink organisation design and usher in a new future with different configurations of skill-sets and leadership.

This redesign could start by identifying the firm’s core value-creating activities and systems; that is, the things that are needed for the firm to deliver and capture enduring value. Once these are agreed upon, one can then explore the ideal combination of human and technology-based resources to deliver that activity or operate in that system. Firms will then need to examine which people with specific skill-sets need to be involved in delivery and control.

Those resources are most likely to be a diverse combination of people with different legal and functional specialisations. And lastly, firms will need to design how best to organise and deploy those clusters of specialists. The end result will most likely look quite different to a traditional organisation structure with conventional corporate services teams.

Describing a comprehensive and accurate list of core value-creating activities and systems is beyond the scope of this short article, but it will most likely include things like:

1. How work is won
2. How work is produced
3. What clients experience
4. How value is captured
5. How people join us and stay
6. How we learn and improve
7. How costs and investments are optimised
8. How risks are managed
9. How we strategise and plan
10. How we execute.

In most medium- to large-sized law firms, a strategic review of this type is likely to be quite complex and politically charged.

Notwithstanding these challenges, rethinking and fostering deep collaboration in all core value-creating activities will allow your firm to own the future. The rest will pay an invisible attrition tax.

Joel Barolsky is a leading strategy advisor, keynote speaker and workshop facilitator to law and other business advisory firms. He is a Principal of Edge International and Senior Fellow of The University of Melbourne.

Visit www.barolskyadvisors.com for more details.