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Artificial Intelligence (AI) has made a loud entrance into the legal tech industry, unlocking possibilities that were once shielded within the walls of our imaginations—thanks to its unprecedented speed and accuracy.
Yet, adapting this technology to streamline legal processes has been a hassle for many in-house counsel entrenched in legacy systems and outdated approaches.
This is because integrating AI into legal processes isn't easy. It requires a combination of nuanced expertise, technical proficiency, and in-depth market awareness, which are often beyond the scope of internal resources.
This is where AI-powered consulting comes into play.
In this guide, we’ve covered the problem with traditional legal processes and how AI-powered, consulting services can help you overcome these challenges and unlock new business opportunities.
The problem with traditional legal processes
The enterprise world is advancing at an exceedingly fast pace, with disruptive technologies, shifting market conditions, and changing regulatory landscapes keeping businesses on their toes.
These dynamics emphasize the importance of agility and innovation in legal processes. Yet, the legal industry, infamous for its conservative and risk-averse nature, has been relatively slow in adopting modern approaches to its practices.
This exposes the in-house legal counsel to a variety of challenges, some of which we’ve discussed below.
#1 Slow and inefficient workflows
Manual tasks, repetitive actions, approval bottlenecks, and a lack of process automation plague traditional legal processes. Legal teams waste invaluable hours sifting through spreadsheets, chasing endless email threads, or hunting for the latest contract version.
This directly impacts business operations, slowing them and sometimes causing missed opportunities.
#2 Limited scalability
As organizations grow, so does the volume of their contracts, legal requests, compliance processes, and even potential disputes.
The in-house counsel should be able to scale along with the business, handling an ever-increasing pipeline of tasks without sacrificing quality and efficiency.
This is a daunting challenge with traditional legal processes.
Clinging to traditional processes means hiring more people simply to manage this influx. But when tasks remain manual, repetitive, and disconnected, adding headcount won't create true efficiency.
In-house legal teams risk drowning in work that could be automated or streamlined, hurting the potential for long-term, strategic growth.
Also read: How to Accelerate Business Growth as Product Counsel
#3 Heightened exposure to risks of non-compliance
“With rapidly evolving technologies, the legal framework tends to lag behind. Whenever there is any amendment in a related regulation, you should be able to suggest necessary changes to the product team to ensure compliance.”
~Juliette Thirsk, Head of Legal at Peach Payments
Streamlining Legal at a FinTech Startup
In an era characterized by evolving regulatory landscapes and heightened scrutiny, the inadequacies of traditional legal processes increase the risk of human error, misinterpretations, and inadvertent non-compliance.
Without robust systems for tracking and managing regulatory requirements, contract obligations, and deadlines, organizations face greater vulnerability to regulatory fines, lawsuits, and reputational damage.
Also read: Unlocking AI Contract Compliance—Tips + Best Practices
#4 Physical and mental burnout
The traditional legal process, characterized by drawn-out and inefficient processes, is notorious for pushing in-house legal teams to their limits.
The manual nature of tasks, coupled with the pressure to meet deadlines amidst high volumes of work, often results in long hours and heightened stress levels. Chronic overwork eventually leads to mental and physical burnout, diminishing productivity and increasing the likelihood of costly errors.
“Those in charge of the legal department need to be very attuned to what is going on in their department and find ways to retain people, reward people, and help them find ways to be more productive without working harder. Pay attention to your team, look for signals of burnout, balance workloads, make 1/1 meetings more productive, and make sure the leadership of the company (especially HR) understands the risk of regrettable attrition in the legal department.”
~Sterling Miller, CEO and Senior Counsel for Hilgers Graben PLLC
Ten Things: Essential Issues For In-House Counsel (2024 Edition)
#5 Inadequate collaboration
“Legal should be pushing businesses forward, not just receiving tasks. So, if a legal team doesn't equally view themselves as part of the business, actively making business decisions along with the marketing, product, and finance teams, then the symbiotic relationship between legal and business is lost. And I question the value of legal over the long term of a company unless I can propel it differently than it's operating today.”
~Doug Luftman, ex-DGC, DocuSign
The Key to Success as an In-House Legal Counsel & Leader
Traditional legal processes often lack robust collaboration tools and centralized platforms, impeding effective communication and collaboration among legal teams, business stakeholders, and external partners.
Without streamlined channels for sharing information, coordinating tasks, and tracking progress, collaboration becomes fragmented and inefficient. This hampers the ability to leverage collective expertise, align strategies, and make productive business decisions.
Also read: Enabling Business-Legal Collaboration—Advice from 7 GCs
How Artificial Intelligence (AI) is changing the narrative for legal teams
For progressive legal professionals, the proliferation of AI in the legal industry brings along a profound opportunity to address the chronic pain points of traditional processes and help legal teams reach their full potential.
Here’s how:
#1 Efficiency through automation
“To me, AI is the next internet. If you're not using it, you're falling behind. AI is going to move rapidly in a direction where it will help a lot of us make processes more efficient. I don't think the GC goes away. AI is a tool but it doesn't replace decision making."
~Celaena Powder, VP of Legal, Seismic
From Security to Sales: Building Cross-functional Bridges
Repetitive, high-volume tasks such as contract review, data entry, and due diligence analysis are ideal targets for AI. AI-powered software can efficiently process vast amounts of information, identify key insights, and flag discrepancies, minimizing the need for manual efforts, reducing errors, and accelerating legal workflows.
This empowers lawyers to shift focus to high-value activities, such as complex legal analysis and strategic counsel.
Also read: What is Contract Automation? Expert Tips & Insights
#2 Scalable insights
While legal data continues to expand exponentially, the capacity of the human mind remains limited. However, this is not the case with AI.
AI algorithms can process immense volumes of data faster than any human team. These algorithms sift through colossal piles of contracts and legal documents, providing legal professionals with invaluable insights at their fingertips.
Such comprehensive analysis offers businesses a significant strategic advantage—one that's hard to replicate solely through traditional methods.
Also read: Legal Analytics: Definition, Tools, and Applications
#3 Proactive risk management
With the ability to analyze contracts, regulatory documents, and past cases, AI can uncover patterns and trends indicative of potential compliance risks, contractual liabilities, or future legal disputes. This ability to assess risks proactively, powered by predictive analytics, arms legal teams with better clarity into their evolving risk profiles, empowering pre-emptive actions and informed decision-making.
#4 Improved collaboration and accessibility
By providing centralized platforms for document management, task coordination, and real-time collaboration, AI enhances accessibility to critical information, fosters cross-functional collaboration, and accelerates decision-making processes.
This promotes greater transparency, alignment, and efficiency across the organization, ultimately driving innovation and competitive advantage.
Struggling with AI implementation? Here are some possible reasons
The vast potential of AI in the legal industry is undeniable. Yet, replacing traditional processes with AI-driven systems isn't a simple plug-and-play process.
If your organization finds AI implementation more challenging than anticipated, these common pitfalls might be the culprits.
#1 Lack of clear objectives
Just adding AI to the mix won't guarantee success. Like with any strategic decision, it's vital to articulate specific goals and desired outcomes.
What business problems are you aiming to solve with AI adoption? Does the primary focus lie in streamlining contract review, improving risk assessment, or boosting document accessibility?
Without a well-defined strategy and understanding of what the organization aims to achieve with AI, efforts may lack direction and cohesion.
#2 Internal resistance to change
“While many fear AI will replace them, I firmly believe it holds more potential to augment humans, especially in the legal profession. With the right oversight, tools like these can enable legal professionals to become exponentially more efficient at high-value work.”
~Tanguy Chau CEO & Founder of Paxton.ai
Unlocking The 10x Lawyer: How Generative AI Can Transform The Legal Landscape
Change is often met with resistance, and the adoption of AI is no exception. Internal resistance from stakeholders can stem from fears of job displacement or an inadequate understanding of the capabilities and limits of AI in legal processes.
Without support from individuals and teams directly impacted by the technology, its implementation will be an uphill task, with a high chance of failure.
#3 High expectations with unrealistic benchmarks
While AI holds immense potential, it is not a panacea for all organizational challenges. Exaggerated expectations fueled by media hype can lead to disappointment when real-world implementations inevitably hit roadblocks.
It's crucial to set realistic benchmarks and expectations around AI implementation, recognizing that it is a journey rather than a quick fix. Incremental progress should be celebrated, and adjustments made along the way based on feedback and outcomes.
#4 Skill gap and insufficient training
AI presents unique demands with specific technical and conceptual understanding. In-house legal teams may possess extensive legal knowledge but may lack the familiarity with AI concepts, platforms, and data interpretation required to make the most of these tools.
Without comprehensive training on best practices in AI-assisted workflows, teams cannot confidently use AI software or translate data-driven insights into actionable recommendations.
In this case, there are risks of underutilizing AI, generating inaccurate results, or inadvertently creating new inefficiencies when AI outputs are applied incorrectly.
Bridging the gap: How AI-powered consulting services can help
Organizations eager to revolutionize their legal processes with AI-driven solutions are often challenged by limitations in resources and internal expertise. If you feel overwhelmed by the complexities of integrating AI into your processes, then turning to AI consulting services like Lex by SpotDraft might be your best bet.
Think of AI consultants as your expert navigators. They help you chart a clear course through your unique challenges, providing not only the know-how but also the tools and resources to unlock the true potential of AI within your legal department.
#1 Tailored strategies and best practices
Successful AI adoption hinges on a strategy aligned with your legal team's needs, broader business goals, and the specific nuances of your organization.
Consultants provide an objective perspective, identifying priority pain points, mapping processes for AI integration, and developing roadmaps with clear milestones. They understand industry-specific best practices, drawing on experience across various legal functions.
#2 Change management support
Successful AI adoption isn't just about the technology. It's about the people. AI consultants act as change agents within your organization. They provide clear communication on the benefits of AI, addressing fears of job losses and highlighting opportunities for professional growth.
By fostering buy-in, creating transparency about the process, and helping teams appreciate little wins, they ease the transition into a new way of working.
#3 Expert guidance on platform selection
AI consultants offer invaluable expertise in evaluating different AI-based platforms based on specific legal use cases, technical requirements, and budgetary constraints.
They understand the subtle differences between vendors, evaluating factors like cost, ease of integration, functionality, scalability, and security when making recommendations.
This removes the need for guesswork and minimizes the risk of investing in incompatible technology.
#4 Training and upskilling programs
“The key with any training is keeping it simple. Complex concepts are generally lost on the employee base.”
~Sterling Miller, CEO and General Counsel, Hilgers Graben PLLC
Ten Things: Building a Strong Compliance Department
AI consulting firms understand that successful AI adoption requires more than just deploying the technology—it also requires equipping teams with the knowledge and skills to leverage it effectively. That's why they offer comprehensive training and upskilling programs tailored to the needs of legal professionals.
These programs cover everything from basic AI concepts to advanced methods for communicating with the system, empowering teams to confidently use AI tools to their maximum potential.
#5 Benchmarking and performance evaluation
The real value of AI is demonstrated through tangible results. AI consultants offer ongoing support with measurement and performance evaluation. They work with your teams to establish a robust baseline and identify appropriate metrics to track improvement.
Based on regular assessments of how AI tools are performing, consultants proactively provide advice to optimize the technology, making the necessary adjustments to strategies or workflows as needed.
These measures help organizations gain clarity on their return on investment and refine their AI strategy for better results.
Go from chaos to clarity with Lex by SpotDraft
Powered by a team of over 100 seasoned legal experts, Lex by SpotDraft is a range of legal services designed to help businesses optimize their legal processes.
With AI making inroads into the legal industry, legal teams in their respective organizations are increasingly seeking ways to turn this technology into their competitive advantage.
Trusted by cutting-edge mid-market brands and enterprises, Lex experts are well-versed in AI's technicalities and how in-house counsel can harness it to drive legal strategies that deliver superior outcomes.
From vendor selection and strategic implementation to team training and performance evaluation, Lex by SpotDraft offers the full nine yards of legal support—on demand and at scale.
Ready to innovate? You’re welcome to hop on a free consultation call with us! Click here to begin.
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