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Generative AI is fast becoming the coolest and most transformative innovation in the legal industry. Who would've thought there would be a day when we could push a button and have a complete M&A agreement drafted for us or get a dozen legal documents reviewed in two minutes? Yet, it appears we're just scratching the surface!
That said, the proliferation of generative AI in legal tech has been met with a parade of mixed feelings, with many fearing that their roles will soon be overtaken by algorithms. Additionally, many legal professionals remain confused and skeptical about how generative AI works, its potential, and how it navigates regulatory and ethical standards.
But the truth remains that generative AI is not our enemy. Instead, it should be viewed as a key that unlocks new productivity levels for legal professionals.
Here, we will delve into what generative AI holds in store for the legal industry and how you can take full advantage.
The problem…
The in-house counsel is constantly under pressure to keep their organization safe from a wide variety of risks and liabilities through a combination of time-tested legal expertise, creative capabilities, business acumen, and risk management proficiency.
However, the presence of repetitive, low-value tasks in their pipeline poses a significant challenge to their fundamental roles, hindering their capacity to focus on more strategic and high-impact contributions to the company's success.
Tasks like legal review, contract creation, and due diligence are often repetitive and swarming with manual processes. Juggling all these tasks while also filling in the gap as the legal mastermind and strategic partner of their organization is tedious, making the GC’s job overwhelmingly demanding.
No wonder up to 62% of legal professionals have experienced burnout in the last 12 months.
This begs the need for GCs to reinvent themselves. They must adopt innovative solutions designed to help them become better legal leaders and strategic partners who contribute significantly to their organizations' growth and protection.
The rise of generative AI in legal tech
The maiden release of ChatGPT in 2022 ushered in a new era in the world of technology. It allowed the public to get an up-close experience of the sheer capabilities of generative AI, offering a glimpse into how AI is set to transform the world as we see it.
The legal industry, like many other sectors, has not been spared in the sweeping tide of generative AI, whose sophisticated algorithms and natural language processing capabilities have dramatically transformed the way legal professionals operate.
From contract drafting and legal review to due diligence and predictive analysis, generative AI has found its use case in a wide variety of areas where efficiency, speed, and accuracy are paramount.
Also read: Top 5 Free AI Tools for In-House Legal Teams
As it continues to advance with the ever-evolving legal landscape, generative AI’s potential applications will only be limited by the walls of our imagination.
Putting generative AI to use in legal practice
Generative AI, while it is relatively new to the legal industry, is impressively versatile and can serve multiple use cases for legal professionals. With the right knowledge and enough practice, you can utilize this tool to streamline your activities and generate far better results than usual.
Here are some of the areas generative AI has proven valuable:
#1 Contract drafting
Generative AI is capable of generating a wide variety of contracts by tapping into a robust database of historical contracts to learn patterns, clauses, and legal language commonly used in specific industries and legal contexts.
This allows it to accept user input and automatically generate fresh contract documents enriched with the right legal guardrails and clauses relevant to the business.
This is one of the key strengths of SpotDraft, an industry-leading Contract Lifecycle Management (CLM) platform.
With SpotDraft, you can easily select from its list of templates, fill in a few details, and have a fully-fledged, customizable contract draft generated for you.
With its AI module, DraftMate AI, you can upload your business documents, and it will automatically generate a contract template using variables from the document.
This not only saves you time and energy but also reduces the chances of critical errors.
Also read: Generative AI for Contract Management: Best Practices to Ensure Safety
#2 Document review
Generative AI can be employed in the review of large volumes of documents, thanks to its ability to identify keywords, patterns, and “red flags.”
SpotDraft’s VerifAI is specifically designed for this purpose. The tool integrates into your Microsoft Word environment and instantly highlights areas of non-compliance and risks. It also provides guidelines for each highlighted risk, explaining why you should be concerned and providing a source reference for your verification.
This gives you a well-rounded approach to document review, helping you ensure that no stones are left unturned.
Interestingly, this is just a tiny portion of what VerifAI can do. So, if you’d like to take it for a spin, you can do so for free until November 30th.
#3 Legal research
Generative AI can be a powerful tool for legal research. It can parse through vast legal databases, statutes, case law, and other legal documents to retrieve relevant information and summaries.
By employing natural language processing, generative AI can generate concise legal briefs, summaries, or research reports. This not only saves time but also ensures that legal professionals have access to up-to-date and well-organized information to support their cases or advisory work.
#4 Compliance monitoring
Generative AI is also useful in compliance monitoring, where it can automatically track and analyze changes in regulations, policies, or laws. It can help legal professionals stay informed about evolving legal requirements and obligations.
By setting up alerts and automated reports, generative AI can assist in identifying potential compliance issues and proposing corrective actions. This helps organizations stay compliant with changing legal landscapes and reduces the risk of non-compliance.
Common concerns around generative AI in legal tech
A study by Litify showed that 62% of legal professionals have yet to start using AI. And considering that the introduction of generative AI in legal tech has been met with mixed reactions, this stat is not that surprising.
In this section, we will explore the various concerns around generative AI that may be slowing down its absorption into the legal tech industry.
Also read: Overcoming Roadblocks to the Adoption of Generative AI by In-House Legal Teams
#1 Fear of job displacement
AI has proven to be faster, more accurate, and more consistent than humans in carrying out most routine tasks. Thanks to this, there’s a widespread unspoken fear among legal professionals that AI may be set to take over their jobs or devalue their expertise in the long run.
Also Read: Will AI Replace Paralegals?
#2 Ethical considerations
The adoption of generative AI in legal tech faces a slew of ethical concerns from legal professionals, many of which are valid. For instance, GCs are concerned about the consequences of relying solely on AI for situations that require human judgment and discernment. It is feared that, if overly relied on, generative AI may lead legal teams to make decisions that don't align with human values and principles.
#3 Learning curve
Understanding how to properly implement and utilize generative AI tools in legal work can be challenging for some GCs. The learning curve can sometimes be quite steep, discouraging them from successfully adopting its use in their daily activities.
#4 Accuracy and reliability
While AI can be highly accurate, it is not infallible. Legal professionals may worry about the consequences of relying on AI when there’s always a chance that it can make mistakes or fail to account for critical nuances in legal matters.
What does the future hold for generative AI in legal tech?
Generative AI, with its ability to process data and generate information like humans, has already demonstrated its value in diverse areas of the legal profession, from legal research and contract generation to legal review and due diligence.
Studies have shown that 95% of professionals already using AI save about 5 to 10 hours every week on their legal work.
Yet, the road ahead looks bright for generative AI despite the hurdles and mixed reactions it currently faces.
According to Litify’s research, 75% of legal professionals believe that AI will positively impact the legal industry in the near future, with workload optimization and access to legal services predicted to be the largest benefits.
As the importance of AI continues to become well-known and more individuals begin to see AI as an ally rather than a competitor, we are set to witness an increasing integration of AI technologies into the legal profession, resulting in a more efficient and cost-effective legal landscape.
With the continuous advancements in natural language processing and machine learning, generative AI will become even more proficient at tasks it's already doing while spreading into new areas of legal practice and helping legal teams become more productive than ever.
“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
How to get the most out of generative AI as an in-house counsel
Generative AI can be a powerful tool for in-house counsel and organizations, automating routine tasks and increasing efficiency. However, it's essential to use it thoughtfully in a manner that complements your legal expertise and contributes positively to your work.
Here are a few points to keep in mind:
#1 Reinvent your mindset
Many people feel they're in competition with AI and that AI can take over their jobs. This is a mindset that needs to be fixed. In-house counsel should view AI not as a replacement for their expertise but as a valuable augmentation of their capabilities.
By embracing this as your reality, you will be better poised to take full advantage of AI and consequently free up time for more strategic and value-added work.
“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
#2 Develop an AI-use policy
"Most organizations are realizing that they should have a policy in place for AI adoption because, otherwise, there's a risk of customer data or confidential data being put into the public tooling."
~ Ken Priore, ex-Director of Privacy, Atlassian
Mastering the Intersection of Law, Technology, and Privacy
As AI becomes more integrated into day-to-day activities, the risks associated with its usage also continue to grow. An AI use policy ensures that every member of your organization uses the AI tools at their disposal with the right amount of caution, in compliance with required data privacy and security standards.
Also read: Crafting Effective Generative AI Policies—A Step-by-Step Guide
#3 Invest in AI training resources relevant to you
To effectively leverage the potential of generative AI, in-house counsel should invest in training resources that are tailored to their specific legal needs. This involves not only understanding how to use AI tools but also gaining insights into the legal and ethical considerations surrounding AI in legal practice.
Furthermore, fostering a culture of continuous learning within your legal team is essential to ensure everyone across the board stays abreast with the ever-evolving AI landscape.
#4 Maintain a balance with human insights
“Attorneys must ensure that they maintain their duty of competence and do not blindly rely on AI-generated content.”
~ Tanguy Chau CEO & Founder of Paxton.ai
Unlocking The 10x Lawyer: How Generative AI Can Transform The Legal Landscape
While generative AI offers incredible automation capabilities, it's essential to recognize that it is not a panacea. You must continue to rely on your legal expertise and judgment.
Human insights are irreplaceable, especially in areas requiring nuanced judgment, complex negotiations, and ethical considerations. AI can provide valuable support, but it should not replace the essential human elements of empathy, intuition, and strategic thinking that are crucial in legal practice.
Final takeaway
While it is yet to be fully accepted as a part of the modern legal ecosystem, generative AI has proven valuable in diverse areas of legal practice. And as it continues to advance and become more integrated into legal tech, it will soon become an indispensable tool for GCs, helping them establish themselves as leaders and strategic partners to their company's ultimate growth and success.
SpotDraft is poised to lead the charge in this revolutionary quest through its various AI solutions. Whether it is SpotDraft AI or VerifAI, our platform is packed with everything you need to stay ahead of the curve.
Curious to know more? Click here to request a demo.
