AI in the legal department: Can artificial intelligence transform your legal operations?

Legal departments are under increased pressure to operate like any other business unit, controlling costs and providing value that affects the bottom line. To accomplish this, legal departments, and increasingly legal operations professionals, are keen to adopt new technologies to increase efficiency and operate more strategically, including those that use Artificial Intelligence (AI).

While AI promises to help legal professionals, aside from creating a lot of hype, its capabilities (and limitations) are not fully understood by the legal community, especially for in-house legal counsel.

This post aims to explore how legal departments hope to benefit from AI and how it fits into your legal operations technology roadmap.

AI in the legal department – fact or fiction?

In an industry that has been slow to adopt technology, AI has gathered momentum due in large part to the large focus on optimising legal operations. However, despite being a hot topic, only 6% of law departments have implemented an AI-enabled technology, according to an HBR Consulting survey.

However, the results point to the fact that more legal departments are looking to adopt AI-based applications to meet different legal challenges. When asked about the objectives that they hope to achieve with AI, responses seem to share a common theme around driving efficiency with 71% saying to increase productivity without increasing headcount, 66% to improve law department operations and 66% to enable self-service by clients.

While hopes are high for AI tools to help legal departments “do more with less” and operate efficiently and effectively across the business, the question begs to be asked: can AI alone solve these issues?

Where does AI fit into legal operations’ technology roadmap?

AI is not a silver bullet – it can certainly help large legal departments, but it is not a simple answer to the problems for all legal departments. In fact, AI itself does not address the core challenges of many small legal departments that are still in the early stages of adopting technology – the need for centralised data and document management.

To better illustrate this point, ACC has developed a helpful Legal Operation Maturity Model, where legal departments can benchmark their maturity across different competencies, like Compliance, Contract Management, IP Management, Records Management and even Technology Management, amongst others. What becomes clear is that only once having passed through the first stages of digitalisation can legal departments truly benefit from AI-based applications.

Taking Contract Management as an example, the key to managing your obligations is your ability to locate existing contracts (ie. “discover”), track clauses, and standardise terms. If you are currently doing this in spreadsheets with adhoc processes and inconsistent terms, the first thing you need to do is get all of your contracts in one place. Then, you can focus on how technology (AI-based or others) can help you with discovery, analytics or operational improvements, when you’re actually ready.

Using your legal operations’ maturity to guide your roadmap will help you identify what pain points your technology needs to help you fix. And most often, the solution isn’t AI – but simple, smart tools that make organizing and reporting on your legal information easier, empowering you to take strategic decisions and demonstrate value. This isn’t to say there is no place for AI, but you also don’t want to adopt AI strict for the sake of ticking a box. Surely, as your legal operations matures, AI tools fit the bill, but before legal departments can take advantage of AI, an initial investment on technology that takes your people, processes and priorities into consideration is essential.

To assist you in taking action, download our free Legal Operations white paper that provides an overview of the main types of technology so that you can benchmark your needs and identify the type of tools you need to operate more strategically.