3 Ways AI Will Impact Legal Departments and How Your Firm Can Benefit

While many legal departments are adopting advanced technologies in their operations, including matter management and increasingly sophisticated document and email management, few today have taken advantage of AI technology directly. The significant benefits expected from AI in legal departments range from reduced costs for cognitive task automation to enhanced attorney productivity, better contract management and more effective sharing of expertise and knowledge. While many of these benefits are on the horizon, how AI technology will reach legal departments differs.

The largest and most sophisticated legal-department players will utilize AI by deploying it directly in their legal departments. However, this approach to AI technology is often costly and technically complex. Hence, most legal departments will tap into the benefits of AI indirectly, as they encounter it embedded in smart software or devices, or through AI-enhanced services sold by law firms and legal process outsourcers. In this context, no matter where you are as a legal department, understanding how to be a smart shopper for AI-enabled software and services now will be a key to fully benefiting from AI technologies in the long term.

Alexa Does Not Drive Your Car

Amazon’s virtual assistant Alexa can make your life easier, but it also has limitations (and cannot drive your car). In a similar way, AI is useful to legal departments, but cannot solve all problems upfront. To ensure your AI projects are successful now, here are two important points to consider:

  • AI is most successful when applied to specific tasks: AI, especially machine learning-based AI, learns from a specific data set. So, it tends to be used in very specific ways, like extracting data from a specific kind of document. This is because AI is most efficient when focused on specific tasks that occur within a relatively repeatable domain. This makes it great at task automation, but not an alternative to a human being.
  • AI is most effective when deeply embedded into devices and processes that we use every day. You don’t buy AI and then buy a speaker (or a car) and put them together. You buy an AI-enabled speaker. In short, AI works best when it is pre-embedded in your device or experience.

And herein lies the legal department dilemma when considering AI: many legal departments do not have a sufficient volume of work in repeatable, specific areas to merit the time and expense of a dedicated AI project.

There’s More Than One Way to Engage with AI

The largest legal departments – or those departments with high concentrations in a specific area such as litigation, claims processing, M&A or real estate management – may justify investing in dedicated AI solutions for specific problems because they have a high return on their investment. For example, British Telecom used iManage RAVN AI to focus on contract analysis and was able to identify approximate savings of 30 million pounds. But many will not. So how can all legal departments reap the benefits of AI?

Taking advantage of AI through your legal providers can be a smart, lower-risk way to benefit from AI today. Instead of investing in AI directly, a great number of legal departments will benefit from AI-enhanced legal services indirectly. This will happen when they are approached by law firms and outsourced legal providers that will offer them cost-effective and efficient services powered by AI.

As a smaller legal department you have the choice to select providers that have invested in AI. The benefit for you in this model is that law firms or legal providers take on the technology investment cost and offer you lower, value-based pricing through AI. The investment makes sense for law firms and outsourced legal providers because of client volume. With an AI investment, they can provide services in a specific practice area, at a more attractive rate or with greater efficiency and accuracy. Examples of such smart solutions already exist in specific areas such as capital markets, where a firm can pick off a single type of instrument and automate legal services around that class of instrument. Other uses abound across real estate, M&A, employment, immigration and intellectual property. Securing documents and files for real estate and other corporate professionals is crucial to building trust and working efficiently.

To these two scenarios, we can add a third, which will likely be most prevalent in the mid- to long term. The majority of legal departments – large and small alike – will experience AI by interacting with software applications and maybe even hardware products (e.g. scanners) that have built-in AI. These are products that have AI woven into a specific function and application to enhance the value they provide.

An example is adocument management system (e.g. iManage Work). Document management has helped legal departments work and collaborate more effectively for a long time. AI that is embedded in document management enables better classification, search and re-use of content. It offers better and more standardized clause drafting, more effective expertise identification and more.

AI is playing a role in making security software smarter as well. For example, iManage Threat Manager uses machine learning to build a digital fingerprint for each user based on his/her individual behavior. The digital fingerprint takes into account what matters the user works on, how many documents the user usually accesses, how many files he/she downloads and so on. Threat Manager triggers an alert when a user’s behavior deviates from his/her fingerprint, often because the user’s account has been compromised through phishing. This helps stop data breaches much more quickly than traditional security products.

Get a Smart Start
If you’re a legal department, you have encountered (or soon will) an AI-enabled offering. So, now is the time to start learning about what AI can do for you. Evaluate your needs and volume of work to see if a dedicated project or partnership with a provider is your best first bet. Test out pilot projects to better understand the technology and its potential impact. And start talking with your vendors on how they plan to incorporate AI in their applications. You may find that your fastest path to AI success is a blend of all the three approaches presented above.

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