Picture a day with zero backlog in your legal department.
It's not as far-fetched as it sounds. The future of legal tech is knocking at our doors, bringing tools and trends that promise unprecedented efficiency.
In this blog post, you'll learn about trends and innovations that are making this dream a reality, and how to leverage these advancements for your team.
Also read: How Generative AI is Transforming the Legal Tech Landscape
#1 By 2024, legal teams will automate 50% of legal work in corporate transactions
Legal professionals are often buried under mundane, repetitive tasks. These are often exhausting and time-consuming, limiting the legal professional’s ability to make high-value contributions to their organization’s success.
Automation technology, however, has offered a way out for in-house counsel, allowing them to streamline a variety of tasks with minimal manual inputs.
According to a report by Gartner, 55% of legal tasks in corporate transactions are automatable. Tasks like contract management, legal review, compliance checks, and more can be automated using a variety of digital tools.
In 2021, CLOC reported that 57% of legal leaders made the automation of legal processes a top priority in their organizations. This stems from the realization of the positive contributions of automation technology to legal processes.
Automation offers a pathway to improved speed, productivity, and scalability of legal workflows, helping in-house counsel meet ever-increasing business demands in the face of resource constraints.
Judging by the pace at which organizations are adopting legal tech, Gartner predicts that at least 50% of legal work will be automated by 2024.
#2 Organizations will 3X their funding for legal tech by 2025
“The COVID-19 pandemic has heaped even greater workloads onto already thinly stretched in-house legal teams, with staffing levels holding flat. Legal leaders are seeing that other departments have found success with their tech investments and also significant advancements in the legal tech market. This is driving their appetite to expand their use of technology to support workflows and meet productivity demands.”
~ Zack Hutto, Director, Advisory, Gartner
5 Legal Technology Trends Changing In-House Legal Departments
There has been a steady decline in the amount spent on outside counsel by organizations, with legal departments shifting more work in-house.
To make up for some of the lost access to external expertise, legal departments are beginning to make more long-term investments in their in-house talent and technology infrastructure.
This includes the procurement of various legal tech tools and investments in training resources in a bid to make in-house counsel more efficient and in tune with the requirements of the modern legal landscape.
Additionally, the positive contributions of technology in other sectors, with the current advancements in legal tech, have been a significant motivating factor for legal leaders, who are beginning to see the many positive possibilities associated with incorporating digital technology into legal workflows.
The industry is expected to continue at this pace, and by 2025, funding for legal tech will have tripled.
#3 By 2026, AI will generate 25% of first-draft contracts and other legal documents
“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
The unprecedented capabilities displayed by ChatGPT in 2022 took the world by storm. While it wasn’t the first time algorithms demonstrated human-like abilities, ChatGPT's ability to engage in natural, open-ended conversations, generate human-quality text, and adapt to a wide variety of contexts set a new benchmark for Large Language Models(LLM), ushering in a new era for generative AI.
Generative AI has since been making inroads into the legal industry. However, it has been met with mixed feelings from advocates and critics due to concerns about ethical implications, data privacy, and performance reliability.
Regardless, the positive contributions of AI in legal tech are already evident, with several tech providers incorporating AI functionalities into their infrastructure.
“Artificial Intelligence just may well be the final frontier in terms of how legal services are utilized and provided. As in-house counsel, don’t run away from it and don’t ignore it. Rather, embrace it as, ultimately, it will allow you to do thing things lawyers love to do: thinking, analyzing, and counseling, while leaving the “grunt” work to the computer.”
~ Sterling Miller, CEO Hilgers Graben PLLC
Ten Things: Artificial Intelligence – What Every Legal Department Really Needs To Know
SpotDraft, for instance, has recently introduced two AI-powered tools, VerifAI and SpotDraft AI, as part of its contributions to the AI revolution. VerifAI is specifically designed to streamline contract review processes, while SpotDraft AI offers a broader range of functionalities, including contract drafting, due diligence, and contract analytics.
The outlook for AI in legal tech appears to be promising, with studies predicting that 25% of first-draft documents will be AI-generated by 2026.
Also read: Unlocking the Potential of AI in Contract Drafting
#4 Legal analytics is set to hit new highs
It is no news that data is the new oil of modern business, and in legal practice, it's proving to be a transformative force.
While legal analytics is a relatively new entrant, it is rapidly gaining traction in the legal industry. This is due to the increasing availability of legal data, the development of sophisticated analytics tools, and the growing recognition of data-driven decision-making as a catalyst for success in legal processes.
Legal analytics involves the use of data analysis and machine learning to identify and assess legal risks, optimize workflows, improve negotiation strategies, and analyze legal team performance, among others.
According to LexisNexis, 73% of legal professionals are currently utilizing legal analytics to some extent, with 92% confirming their plan to increase its usage in the future.
Thanks to its growing popularity, the global legal analytics market is set to hit $7.6bn in 2028, up from $1.5bn in 2022, at a CAGR of 31.06%.
Also read: Legal Analytics: Definition, Tools, and Applications
Five recommendations for taking full advantage of technology as an in-house counsel
While technology has shown to be incredibly beneficial to the legal industry, its adoption must be approached with caution and prudence.
The tips discussed below are mission-critical for in-house counsel who aspire to get the best results from legal tech implementation.
#1 Think long-term. Avoid ad-hoc solutions
In-house counsel should avoid implementing legal technology solutions as a reaction to immediate problems or short-term needs. Instead, they should adopt a strategic approach and consider how technology can align with the long-term goals and objectives of the legal department and the organization as a whole.
This involves assessing current processes, identifying areas for improvement, and evaluating how technology can streamline operations, enhance efficiency, and reduce costs in the long run.
#2 Identify and prioritize specific areas that require technology
Not all aspects of legal work require the same level of technological intervention. In-house counsel should identify and prioritize specific areas or tasks that can benefit the most from digital transformation.
This might include contract management, e-discovery, compliance monitoring, or legal research, among others. By focusing on these areas, you can effectively allocate resources and ensure that your organization’s technology investments have a meaningful impact on your team’s operations.
“The key to success is to first identify specific issues that can be solved with automation rather than deploying legal technology in search of a problem.”
~ Robert van der Meulen, Head of PR, Gartner
5 Legal Technology Trends Changing In-House Legal Departments
#3 Always stay in touch with the legal tech industry
The legal tech industry is constantly evolving, with new tools, platforms, and innovations emerging regularly. To make the most of technology, in-house counsel should remain engaged and informed about the latest developments.
This includes attending conferences, webinars, and workshops, as well as subscribing to relevant publications and maintaining a network of contacts within the legal tech community.
“If you think that you're doing everything perfectly, you're not going to grow. There's always an opportunity for self-improvement.”
~ Doug Luftman, ex-DGC, DocuSign
The Key to Success as an In-House Legal Counsel & Leader
This knowledge not only enables you to make informed decisions when adopting new technologies but also ensures your team remains compliant with changing regulations and industry standards.
#4 Create a team responsible for vendor investigation
Evaluating and selecting the right legal technology solutions can be a time-consuming and complex process. To streamline this, you should establish a dedicated team responsible for researching, evaluating, and recommending technology vendors.
This team should comprise individuals with a mix of legal, technical, and procurement expertise to ensure a comprehensive assessment of each vendor's offerings.
The team's primary responsibilities should include:
- Identifying potential vendors that align with the organization's specific needs
- Conducting in-depth research on each vendor's products, features, and pricing
- Requesting demos and evaluating the usability and effectiveness of each solution
- Negotiating contracts and ensuring alignment with the organization's legal and financial requirements
- Providing ongoing support to ensure seamless implementation and adoption
#5 Don’t get carried away by the benefits
While legal technology offers numerous benefits, it's important to approach its adoption with a balanced perspective. Carefully consider the potential drawbacks and limitations of specific technologies before implementing them.
This includes evaluating the potential impact on workflow, data security, costs, and its overall alignment with the team’s productivity goals.
By adopting a measured approach, you can maximize the benefits of legal technology while minimizing potential disruptions and ensuring a smooth transition.
Stay ahead of the curve
“In an environment where legal leaders are seeking to reduce spend and yet carry out more complex, unpredictable legal work, legal departments that can leverage technology solutions and legal operations to drive greater efficiency in-house will be the winners.”
~ Caroline Van Allen, Senior Research Specialist, Gartner Legal & Compliance.
5 Legal Technology Trends Changing In-House Legal Departments
The legal industry is known to be conservative and risk-averse about technology. However, the last few years have seen increasing adoption of legal tech by in-house counsel across organizations.
Disruptive innovations like AI and blockchain have opened our eyes to the endless possibilities of technology in the legal industry. And yes, we’re just scratching the surface!
At SpotDraft, we're always at the forefront of innovation, helping in-house counsel discover ways they can utilize technology as a pathway to greater productivity. Alongside our industry-leading CLM, we also have AI-powered solutions VerifAI and SpotDraft AI, all designed to help you generate far better results with minimal manual inputs.
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