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The Next Wave of AI: What’s Really Coming in 2025

By Pete Hanlon |
January 29, 2025

The Next Wave of AI: What’s Really Coming in 2025

The following post was contributed by Pete Hanlon, Chief Technology Officer of Moneypenny.

As CTO of Moneypenny, the leading outsourced communications company, Pete Hanlon brings a unique perspective to the transformative technology trends set to shape 2025 for lawyers. From advancements in AI to the realities of integration and regulation, he foresees pivotal changes that could redefine the legal profession and beyond.

Here’s a deep dive into what lies ahead—not just the obvious shifts, but the deeper changes that could impact how lawyers work,.

Open Source Is Coming for the Crown

The most exciting battle in AI isn’t unfolding in corporate labs, it’s happening in the open source community. They’re catching up fast, and were starting to see open source models going head to head with industry leaders such as OpenAI o1 and Claud-Sonnet-3.5. This isn’t just about matching performance metrics. It’s about making AI accessible to both large and small law firms that have been held back by data privacy concerns, opening doors for firms that have struggled to leverage this technology. The result? A new era where AI is democratized, accessible to all, and no longer controlled by closed source businesses.

Forget AI Replacing Lawyers – Think AI as Your Digital Colleague

Remember when everyone thought AI would replace many law firm jobs overnight? That’s not how it’s playing out. Instead, we’re witnessing the emergence of hybrid teams where AI takes on the repetitive tasks, leaving people free to handle more complex challenges. It’s less about replacing jobs and more about using AI to super power people and using data to enable smarter decision making. Moneypenny, for example, delivers outsourced communication solutions that blend the efficiency of AI with the personal touch of real people. This balanced approach boosts productivity and enhances customer satisfaction. 

Integration: The Real Challenge Nobody’s Talking About

Here’s where things get interesting and complicated. The next phase isn’t about building brand new AI systems, for lawyers it’s about weaving them seamlessly into existing business processes, work flows and infrastructure. Picture CRM systems that can predict what customers need, knowledge bases that update themselves, conversations that flow naturally between voice and text, and customer support that breaks language barriers. We understand the importance of seamless integration, and at Moneypenny, we’re fully embracing it helping legal teams embed AI powered systems into their infrastructure seamlessly . 

Industry Specific Models: Tailored AI for Specialized Needs

We’re entering an era of industry specific LLMs tailored for the legal field. These models will come pre loaded with domain-specific knowledge, enabling firms to deploy AI that understands their unique requirements, language, and regulatory needs. In finance, LLMs could support compliance and offer investment insights. In law, they could streamline contract review and case law analysis. These specialized models will allow companies to quickly implement AI that’s relevant, compliant, and impactful in their field.

The Reality Check Is Coming

Some firms may soon realize they’ve taken on more than they can handle with AI adoption, facing a range of unexpected challenges. Many will struggle with complex integration issues as they attempt to launch AI initiatives within existing systems. Additionally, there may be difficulties in managing the high expectations around AI’s capabilities, as reality often falls short of the hype surrounding its potential. 

Regulation: The Elephant in the Room

Law firms should prepare for the growing impact of AI regulations, particularly in customer facing applications. Forward thinking organizations are already taking steps to build transparency into their AI systems, overhauling data governance practices to ensure accountability. They are creating detailed audit trails to track AI decision making and making sure that their systems are both fair and accessible. These proactive measures not only help them stay compliant but also foster trust with their customers.

What This Means for lawyers

The next year won’t just be about AI getting better – it’ll be about AI getting smarter about how it fits into our existing world. Success won’t come from blindly adopting every new AI tool. It’ll come from carefully choosing where AI can genuinely improve how lawyers work.

The winners won’t be the companies with the most advanced AI. They’ll be the ones who figure out how to blend AI and human capabilities in ways that make sense for their business and their customers. Yes, we’ll see AI continuing to be more accessible and capable. But the real story will be about how lawyers learn to use it wisely. After all, technology is just a tool – it’s how the legal profession use it that matters.

About the author

Pete Hanlon

Pete Hanlon

Commercial

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Commercial Regulatory Issues

Senate Bill Targets Litigation Funding Transparency With Non-Profit Exemption

By John Freund |

U.S. lawmakers are seeking to impose new transparency requirements on third-party litigation financing in major lawsuits, while carving out protections for nonprofit legal organizations that receive funding to provide free legal services.

An article in Reuters reports that a group of Senate Republicans led by Judiciary Committee Chair Chuck Grassley has introduced the Litigation Funding Transparency Act. The bill would require disclosure of third-party financing in class actions and mass tort litigation, a narrower scope than past proposals aimed at all civil cases. Importantly for the legal funding market, the legislation includes an exemption for nonprofit legal groups funded by U.S. donors that provide pro bono representation, protecting those organizations from having to disclose their backers.

Supporters of the measure frame it as a move toward greater openness about who is financing high-stakes litigation, arguing that visibility into funding sources is essential to ensure fairness and guard against undue influence. The bill would also bar third-party funders from influencing litigation strategy, settlement negotiations, or accessing confidential documents. However, critics—including the International Legal Finance Association, an industry body—contend that imposing disclosure rules could chill litigation finance and potentially limit access to justice for plaintiffs who rely on third-party capital to pursue claims. Conservative advocacy groups have also weighed in against the bill, fearing that disclosure mandates could expose donors to political scrutiny despite the nonprofit carveout.

The bill’s introduction builds on a history of legislative efforts by Grassley to regulate litigation funding transparency, though previous versions have stalled in the House amid bipartisan opposition.

For the legal funding industry, this legislation raises crucial questions about regulatory risk and disclosure expectations in the U.S. If enacted, the bill could reshape how funders participate in large-scale litigation and how transparency requirements are balanced against concerns over client privacy, fundraising, and the broader access-to-justice mission.

Commercial Deals

UK Funder Makes Fresh Pitch After Liquidating Core Fund

By John Freund |

A UK-based litigation funder is seeking to reset its strategy and reassure investors after liquidating one of its key funds, underscoring the mounting pressures facing capital providers in an increasingly competitive and scrutinized funding market.

An article in Bloomberg reports that Katch Investment Group wound down a flagship vehicle and returned capital to investors, following a period of underperformance and portfolio challenges. The move marks a significant inflection point for the firm, which is now presenting a revised investment strategy aimed at regaining investor confidence and stabilizing its platform.

According to the report, the funder’s leadership has framed the liquidation as a proactive step designed to preserve value and recalibrate its approach in light of shifting market dynamics. The litigation finance sector has faced headwinds in recent years, including longer case durations, delayed resolutions, and increased regulatory and judicial scrutiny—particularly in collective proceedings. These factors have complicated return profiles and made capital raising more challenging, especially for publicly listed or institutionally backed funders under pressure to demonstrate consistent performance.

The firm is now pitching a refined model that emphasizes disciplined case selection, portfolio diversification, and closer alignment with investor expectations. The reset comes at a time when several UK-based funders are reassessing their exposure to large, high-risk group actions and exploring alternative structures, including co-investment arrangements and bespoke mandates.

Case Developments Commercial

Law Firm in J&J Baby Powder Cases Sues Litigation Funders

By John Freund |

A dispute emerging from the long-running talc litigation against Johnson & Johnson has spilled into a new front, as a plaintiffs’ law firm has filed suit against its own litigation funders in a high-stakes funding battle tied to the baby powder cases.

An article in Reuters reports that the firm, which represents claimants alleging that Johnson & Johnson’s baby powder products caused cancer, has sued multiple litigation funders over the terms and enforcement of its funding agreements. The complaint centers on allegations that the funders are seeking repayment amounts the firm contends are excessive or otherwise improper under the governing contracts. The lawsuit underscores the financial strain and complex capital structures underpinning mass tort litigation, particularly in sprawling, multi-year proceedings like the talc cases.

According to the report, the firm argues that the funders’ demands threaten its financial stability and ability to continue representing clients in the ongoing litigation. The case reflects the high-risk, high-reward nature of funding large portfolios of mass tort claims, where returns can hinge on bankruptcy proceedings, global settlements, or appellate outcomes. Johnson & Johnson’s use of bankruptcy maneuvers to resolve talc liabilities has already added further uncertainty and delay, complicating recovery timelines for plaintiffs’ firms and their capital providers.

The dispute highlights the intricate dynamics between law firms and funders in contingency-heavy practices. Funding arrangements in mass torts often involve layered investments, staged drawdowns, and complex priority waterfalls. When case timelines stretch or resolution values shift, tensions over repayment multiples and control rights can quickly surface.