Can One Adapted Model Do It All? Fine-Tuning Strategy Selection for Customer Support LLMs

LLM agents execute heterogeneous sequences of model calls within a single task: some invocations require careful reasoning, while others are structured steps such as formatting or tool-argument construction. Prior routing methods exploit this asymmetry by assigning easy invocations to a cheaper small model and difficult ones to a large model. Such policies reduce inference cost, but they leave the small model's capability unchanged, so attainable savings remain bounded by the work the student can already solve. MERA instead improves the small model itself, using a single model invocation as the unit of adaptation. In each cycle, MERA replays failed student invocations to obtain execution-verified teacher demonstrations, distills recurring procedures into an iteratively updated SkillBook, and fine-tunes a student LoRA adapter via supervised learning and optional GRPO. Routing serves as supporting machinery for deployment: the improved student is served behind a cost-calibrated router with verifier-backed fallback, and a candidate SkillBook, adapter, or router is admitted only when joint replay preserves task quality. Empirically, four-cycle adaptation raises Qwen2.5-Coder-1.5B from 28.7% to 49.7% pass on held-out HumanEval+MBPP. Under verifier-backed fallback, the deployed policy retains 88.3% pass at 60.8% of always-Luna cost. On TAU-2, a fine-tuned Qwen3.5-2B improves from 14/35 to 18/35 and matches an unadapted 4B model. These results indicate that verifier-backed multi-cycle adaptation can increase small-model capability, rather than only routing around a fixed student.

Data-residency constraints force enterprises to self-host LLMs, but continuous adoption of newer models without decommissioning their predecessors expands the serving fleet, fragmenting a finite GPU pool. We consolidate traffic from over 200 internal applications onto a single model by closing quality gaps identified through production error analysis along three axes: instruction following, function-calling, and internal task distribution. Quality is tracked by offline benchmarks stratified to production traffic and scored by deterministic verifiers or calibrated LLM judges. Rather than optimising all objectives jointly, which introduces cross-domain reward interference, we train a separate GRPO expert per axis and merge them via two-stage SLERP. Each expert's reward exposes a distinct failure mode, namely semantic collapse, over-calling, and verbosity hacking, each requiring a domain-specific fix. In non-reasoning mode the recipe surpasses a ${\sim}7\times$ larger by total parameters baseline on the in-house Arena with 69.6 to 65.8, instruction following with 0.85 to 0.83, and function-calling with 0.79 to 0.77, while lifting general dialogue benchmarks. The model absorbs 50% of platform traffic, 116M requests per month, at a fraction of the serving cost.

Recent literature on fine-tuning Large Language Models highlights a fundamental debate. While Full Fine-Tuning (FFT) provides the representational plasticity required for high-entropy knowledge injection, Low-Rank Adaptation (LoRA) can match or surpass FFT performance because many tasks only require updates in a low-rank space and benefit from LoRA's additional regularization. Through empirical evaluation across diverse tasks (SQL, Medical QA, and Counterfactual Knowledge) and varying language models (Gemma-3-1B, Qwen2.5-1.5B, and Qwen2.5-3B), we verify both trends and demonstrate that relying solely on either static architecture is structurally limited. To address this challenge, we propose a Mixture of LoRA and Full (MoLF) Fine-Tuning, a unified framework that enables continuous navigation between both training regimes. MoLF dynamically routes updates between FFT and LoRA at the optimizer level to ensure that exact gradient signals are available to both experts throughout training, yielding stable training dynamics. For memory-constrained environments, we also introduce MoLF-Efficient, which freezes base weights and only routes updates among a pair of LoRA experts of potentially varying rank. Our evaluations show that MoLF either improves on or stays within $1.5\%$ of the better of FFT and LoRA across all settings, while MoLF-Efficient outperforms prior adaptive LoRA approaches by up to $20\%$ on Fact and $9\%$ on Med and SQL. Our code is open-sourced at https://github.com/11785T23/molf.git.