A&O Shearman: Lawyers Build AI Tools, Dedicate Billable Hours

• A&O Shearman is investing $1.1 billion over five years into AI development, allocating over 5% of its annual revenue to this initiative.
• Lawyers across all practice areas will dedicate at least 3% of their billable time to build specialized AI tools.
• The strategy aims to center AI development around lawyers' expertise to create bespoke tools and transform legal service delivery.
• A&O Shearman previously tested Harvey in 2022 and developed its own AI products, demonstrating prior engagement with legal AI.
• This move signals a shift in the legal AI race towards internal development and lawyer-led innovation, beyond mere tool adoption.

This proactive stance by A&O Shearman follows several years of internal experimentation with AI technologies.

A&O Shearman, a prominent Magic Circle firm, is embarking on a significant strategic initiative by dedicating a portion of its lawyers' billable hours to the creation of specialized artificial intelligence tools. This ambitious undertaking forms part of a substantial $1.1 billion (£800 million) investment planned over the next five years, signaling a profound commitment to technological advancement within the legal sector. The firm intends to allocate more than 5% of its annual revenue towards these AI ambitions, underscoring the scale of its commitment.

Under this new strategy, legal professionals across all practice areas will be mandated to set aside a minimum of 3% of their billable time to contribute directly to the development of this cutting-edge technology. The core philosophy behind this move is to position A&O Shearman lawyers at the very heart of AI development, leveraging their deep subject matter expertise. This approach aims to foster the creation of tools specifically tailored to address tasks within their respective practice areas, ultimately transforming the way legal services are delivered to clients and shaping the future of legal services AI.

This proactive stance by A&O Shearman follows several years of internal experimentation with AI technologies. The firm's strategy emphasizes building bespoke AI systems that are intrinsically linked to the specialized knowledge of its lawyers, rather than solely relying on commercially available, ready-made products. Hervé Ekué, the firm's global managing partner, articulated the vision, stating that this substantial A&O Shearman AI investment clearly indicates the firm's intended trajectory for the coming decade. Ekué highlighted that AI will enable the firm to offer an enhanced skillset to clients, addressing complex challenges on a global scale in ways previously unachievable.

He further emphasized that the leading firm in the future will be one that seamlessly integrates exceptional legal judgment with the speed and scalability to apply it consistently worldwide, asserting A&O Shearman's intent to be that firm through this accelerated investment. The firm is not new to legal tech investment; it began testing the AI platform Harvey in 2022 and subsequently became one of its earliest major law firm clients, before moving on to develop its own proprietary AI-powered products.

The announcement from A&O Shearman arrives amidst an intensifying competitive landscape within BigLaw, where firms are vying for leadership in AI integration. This move by the Magic Circle firm AI strategy suggests a significant evolution in the ongoing AI race. While many firms have focused on gaining access to the latest AI tools, A&O Shearman's approach signifies a shift towards internal billable hours AI development, indicating a willingness to invest lawyer time directly into building proprietary solutions.

This contrasts with actions by other major players, such as fellow Magic Circle firm Freshfields, which earlier this year partnered with Anthropic to provide nearly 6,000 staff across its global offices with access to the company's Claude AI models. A&O Shearman's latest initiative underscores that the competitive edge in legal AI is increasingly defined not just by tool adoption, but by the extent to which firms are prepared to commit their lawyers' expertise and billable hours to cultivate their own advanced technological capabilities.

This development signals a significant shift in how major law firms are integrating AI, moving beyond mere adoption to active lawyer-led development. For lawyers and compliance officers, this highlights the growing imperative to understand and potentially engage with AI tools, as it will likely impact service delivery models, client expectations, and the required skill sets within the legal profession. It also indicates increasing competitive pressure among firms based on their technological capabilities.

Source: Original reporting via Legal Cheek