Measurable ROI from GenAI in Legal Practice: Balancing Ambition with Reality

GenAI in legal services generates plenty of excitement but surprisingly little measurement. I find that quantifying impact takes more than tracking time saved or documents processed, it requires a framework that fits the economic realities of legal practice while being practical enough to use.

The Economics of GenAI Don't Follow the Hype Cycle

Most GenAI implementations run into three economic realities rarely talked about on demo calls:

1. The Billable Hour Problem: Tools that make lawyers more efficient can cut revenue under traditional billing models. We've all had the thought "We just taught the AI to do in 20 minutes what we bill 5 hours for. Now what?"
2. Front-Loaded Investment: GenAI needs significant upfront spending on infrastructure, training, and governance before delivering returns. The payback period is often 18+ months, not the "immediate ROI" vendors promise.
3. Client Perception Risk: Clients expect AI to cut costs but remain sceptical about AI generated work. This creates a rather asymmetric risk: minimal recognition when it works, major issues when it fails.

Tracking impact means using metrics that reflect these realities and are practical to measure.

A Three-Tier Measurement Framework for the Real World

Tier 1: Operational Efficiency Metrics

Tier 2: Revenue Impact Metrics

Tier 3: Strategic Value Metrics

Balancing Aspiration and Reality: What Actually Works

Most firms won’t track all of this, as usual real world constraints get in the way:

• Pressure to implement fast
• Limited measurement infrastructure
• Messy data environments
• Competing priorities

Start With What You Already Measure

Most firms already track:

• Matter profitability
• Time recording
• Fee realisation
• Client retention

Building on existing metrics dramatically increases your chances of success. The most sophisticated framework that sits unused creates no value. The simplest one that actually guides decisions has real impact.

Focus Where Impact is Most Immediate

Identify a practice group with:

• Consistent matter types to create comparable data
• Fee pressure creating clear incentives
• Matters where efficiency benefits clients
• Workflows suited to GenAI enhancement

Success in one area builds momentum and provides real results for leadership, and hopefully you'll end up a victim of your own success.

Simplify Your Initial Metrics

Rather than tracking everything, start with:

1. Time Compression: Before/after time tracking
2. Fee Realisation: Impact on collected revenue
3. Error Reduction: Quality improvement measures
4. Client Retention: Client relationship impact

Expand as you gather data and refine insights.

A Realistic Implementation Roadmap

Early on: Foundation with Existing Data

• Inventory metrics you already track that apply to GenAI
• Identify practice areas well-suited for rollout
• Define 3-5 core metrics using existing data
• Create simple dashboards that fit current reporting

Next Steps: Focused Implementation

• Deploy targeted GenAI in selected practice areas
• Capture baseline measurements before rollout
• Set up streamlined measurement processes
• Engage early adopters at all levels, they will champion this work

Keep Going: Learning and Adaptation

• Gather qualitative feedback alongside metrics
• Make visible improvements based on user insights
• Refine measurement and expand where needed
• Develop preliminary case studies from early results

Eventually: Measured Expansion

• Extend to additional practice areas
• Incorporate more of the sophisticated metrics
• Connect GenAI data to firm-wide profitability analysis
• Develop those client-facing value narratives using real data and real analysis.

Technical Requirements: Practical Fundamentals

To achieve this all though you'll need effective measurement:

1. Matter Management Integration: Connect to existing systems, please don’t create parallel data streams
2. Ethical Usage Tracking: Monitor tool usage while protecting confidentiality
3. Output Quality Assessment: Consistent work product evaluation
4. Granular Time Recording: Capture task-level time data where possible
5. Client Value Metrics: Build feedback loops for client perceived value - sometimes those are easy to lose in the day to day work.

Change Management: Collaboration for Success

Ultimately success relies on the usual things with just one additional item specific to AI implementation...

1. Collaborative Engagement: Frame metrics around practice area growth and client value
2. Privacy Protection: Ensure measurement respects confidentiality
3. Meaningful Benchmarks: Use comparisons that reflect real practice needs
4. Aligned Incentives: Reward contributions to successful implementation
5. Transparent Communication: Share results to build engagement across the firm

Firms leading in GenAI aren’t just using better models, because more and more they are becoming commodities, rather they’re tracking impact and using that data to drive smarter decisions.

GenAI success will never be about just using the most advanced tech, it’s about measuring real impact and using those insights to improve. If you’re serious about measuring ROI, start with three numbers you already track and make them your GenAI baseline. The firms that win in this space find the balance: comprehensive enough to drive insight, practical enough to actually use.