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The Role of AI in Legal Operations in 2021

Today corporate legal departments are getting more and more used to the presence of Artificial Intelligence (AI) in their operations. For lawyers this means that their work is not just about decision-making, drafting contracts and representing companies in court anymore. Today, a legal officer, like a member of Star Trek’s USS Enterprise, has to operate a stack of technologies to manage their routine tasks and cases in the most efficient way possible.

And while some of the legal processes are still taken care of manually, the value of AI for legal operations is becoming more and more evident, as it continues to transform the legal industry. Document automation, contract lifecycle management, compliance management, eDiscovery—these tools were not even in the sci-fi movies. Today, complex contracts can be taken care of in minutes, and that’s just the beginning of AI and legal’s close cooperation.

The goal of AI for legal operations is simple. Artificial intelligence is here to make us more efficient, productive, and our services to the company more cost-efficient. But should lawyers be afraid of being replaced by computers and robots? How is AI changing the practice of law?

Definitely not. 

To show you why, we decided to break down the role that AI law software plays in legal operations today, and where it will be taking your legal practice in the future to come.

A culture of innovation. Building a new mindset to deliver modern legal services

Building a culture of innovation leads to a dramatic increase in the creation of products, services, developing ideas for improvement, and leads to the digital transformation within an organization. This is what the companies with a strong innovation culture are looking for—increasing the potential and efficiency of their processes, strategies, products and services across departments.

Companies that lack innovative culture lose to innovative competitors. 

But it’s not just about the company’s goals and ambitions. Each employee within every department needs to develop a growth mindset and support the culture of innovation in order for the whole company to succeed. This is something that lawyers can pick up from astronauts. That can only be done by accepting the new tools, learning how to operate them in the most efficient way, and adding to the value of innovation by constantly showing results that boost the company’s growth and make room for more innovation

Unfortunately, the picture we see today is not quite satisfying. Employees across industries are stuck in an everlasting cycle of meeting quarterly goals by repetitively, mechanically doing the same thing the same way, today, tomorrow, and the day after it. But what’s working for McDonalds won’t work for Banks, Pharma or Software companies. And will definitely be destructive for legal practitioners.

Legal burnout, lack of interest in self-development, passive presence at a workplace are ever-present across the managerial bodies in big companies. Yes, it may look safer to just follow the instructions instead of generating new ideas and risking seeing them neglected. But today, companies prefer to take the risk of innovation to staying in the lane and watching competitors take them over.

Measuring innovation. Legal Innovation Index

Measuring innovation AI in legal

The Legal Services Innovation Index was created by Daniel W. Linna Jr. to measure and assess innovation and provide a new viewpoint on the legal innovation landscape.

Linna’s methodology analyzed the websites of 260 law firms worldwide, specifically those in the Am Law 200, Canadian Top 30 and Global 100, with Google Advanced Search. The search consisted of words and phrases that are related to the legal industry and can connote innovation: 

  • alternative fees
  • knowledge management
  • artificial intelligence
  • legal operations
  • blockchain
  • automation basics
  • project management

This index has become a good benchmark despite its weaknesses. For example, a company can mention a lot of technology and innovation on their website, but not provide service or use the technology. And vice versa—the company can be very innovative, but not mention anything on their website.

However, there is one thing that the index shows that brings hope for legal innovation: blockchain, artificial intelligence, and project management have the highest average rate of being mentioned on the legal service providers’ websites.

There was also one curious fact that the index showed. Document automation was among the lowest ranks in the index, despite the fact that it is the most considered topic when talking about the use of AI for law firms, which was the top ranked concept.

In any case, it is very encouraging to see that the legal industry is embracing the innovation and with AI law and legal go hand-in-hand to help lawyers across the world become more efficient in their legal practices. To help them with that, there are metrics that legal departments should always keep an eye on.

What is AI? Sci-fi fantasies vs. today’s reality

AI in legal reality or sci fi

AI seems like it has been brought to life from the wildest fantasies of the best science fiction writers. But what is Artificial Intelligence, and how AI will benefit the legal industry?

AI is quite an ancient concept, mentioned even by the greeks. But the breakthrough that led to the creation of thinking and decision-making computers dates back to less than a century ago, when Alan Turing revolutionized code-breaking during the WW2 and became one of the first people with an idea that machines can think in the 1950s.

The basis of AI Technology is its ability to learn on the go, processing the data it collects. More data means better decision-making based on carefully crafted algorithms. This is called Machine Learning.

The basis of AI Technology is its ability to learn on the go, based on the data it collects.

Below are some of the examples of what the sci-fi movies and novels got right about ‘our future’ and how long it took for the world to manifest their wildest dreams:

  • In 1977 Doctor Who introduced the K-9 dog that beats a human in chess. In 20 years, IBM created ‘Deep Blue’ that managed to do just that.
  • In 1962 the Jetsons talked and saw each other on a TV display. Today, Facebook Portal, Skype, and Facetime allow just that.
  • In 1966 Star Trek used a universal translator to communicate with almost any race in the galaxy. In 2015 Google managed to create an Assistant that managed to make translations in 27 languages in real time.

And the list goes on and on. It is only a matter of time before an algorithm is created that allows the computer to learn and manage new tasks. The key here is the routine. Routine, repetitive tasks provide a constant volume of data regarding repetitive actions that the AI lawyer will be able to undertake. For us, that can only mean one thing—we are getting free from the routine to focus on tasks that a machine cannot do for us.

Are we there yet?

Yes, the legal industry is one of the most tradition-backed industries in the world. Yes, it is taking longer for lawyers to admit the effectiveness of AI for legal teams and embrace technology. But that does not mean that the industry is not moving anywhere.

The 2020 lockdown has shown to legal practitioners that technology can be a friend, not always an enemy. Law firms, corporate legal departments, even courts embraced the technology to perform day-to-day tasks in the pandemic conditions.

Migration to cloud storage, workflow automation, artificial intelligence, videocommunications, and cybersecurity have become the force that has to be reckoned with—a trend.

Today, everyone recognizes the benefits of technology, and of AI for legal in particular. Especially when we’re talking about contract management software. Along with other tech, AI has helped cut the legal costs and make corporate legal departments more effective. Today, the use of AI software for law firms is experiencing a significant increase in investments in order to reduce the workload on employees by putting processes like workflow, approval, and contract drafting on a streamline.

Benefits of AI in legal. Is it worth the investment?

Benefits of AI in legal

Legal technology has become a hype and one of the key areas for corporate investments in recent years. However, many law firms and corporate lawyers are not fancying a switch to digital processes, citing a variety of reasons:

  • Absence of technical skills or understanding (36%)
  • Organizational change management issues (34%)
  • Unclear return on investment (30%)

Despite that, the legal technology investments broke the $1B mark in 2018, and managed to overcome that number by Q3 in 2019, already hitting $1.23B.

We might be biased in saying that investing into technology, and into AI for legal teams in particular is worthwhile. This is why we’d like to let the stats speak for us, and provide you with enough data to make an informed decision yourself:

  • With AI lawyers review contracts in less than an hour, saving 20-90% of time without sacrificing accuracy
  • JP Morgan created COIN, a program that extracts 150 attributes from 12,000 commercial credit contracts in a matter of seconds. This amount of work is equivalent to 360,000 hours by legal and loan officers annually
  • 58% of law firms are now using cloud storage
  • 58% of ABA 2019 survey participants admitted to using software in their practice 
  • ‘Technology leading’ firms are faring better, with 50% of them being ready to meet digital demands in the industry
  • 53% of US and European lawyers admit that their companies are planning to increase tech investments in years to come
  • Today, about 23% of lawyer’s work can be automated using legal technology
  • 27% of senior executives believe using the technology is a matter of survival
  • Contracts management (44%), matter management (42%), and governance, risk and compliance technologies (37%) are the top three investment areas in the legal sector today
  • 77% of corporate legal departments expect the increase in their automated workflows, while only 2% expect a slight decrease

The numbers are plenty, and can provide sufficient food for thought. But one thing is evident—legal technology and AI law software in particular are becoming a significant part of day-to-day operations.

Impact of AI in law in 2021

Incorporating AI-powered tools has increased operational efficiencies for firms and legal departments. Companies have been able to reduce human error and workload, streamline contract workflows and recruitment processes, and save time by taking care of complex time-consuming tasks in a matter of minutes.

A recent study conducted by Onit has shown that new users became 34% more efficient and 51.5% more productive immediately. This, in turn, allowed team leaders to repurpose 15% of their time to more valuable, impactful tasks than contract and team management.

For legal operations the use of AI means several things:

  • They can significantly reduce the legal costs
  • Their lawyers will become more efficient
  • The contract workflow can be sped up by up to 80%
  • Focusing on impactful tasks instead of routine reduces the level of legal burnout
  • The amount of human-caused error can be reduced to a minimum
  • Part of routine legal tasks can be delegated to administrative personnel without legal background

And it’s not just that. Legal departments must be able to access and process data from the rest of the company, which AI helps combine and process from all corporate resources. AI can notice and flag questionable activities and quickly assess the level of risk they can lead to.

It is important to have the ability to analyze and gather information quickly. It is vital to give your legal operations access to that information.

Artificial intelligence in the legal software

Artificial intelligence in legal software

AXDRAFT document automation software uses powerful AI to generate contracts of any complexity in a matter of minutes. We feed our system with the templates to create contracts and clause playbooks that help you draft contracts 80% faster and deliver 100% compliant, pitch-perfect drafts without legal background.

Yet a lawyer’s work is not just about drafting contracts. There are many different legal processes, and AI-driven software can help you manage most of them more efficiently. This is especially relevant for commercial law firms and corporate legal departments. For them having an effective solution means big savings and the ability to relocate resources to where they are needed most.

Onit, our mother company, create AI-backed solutions for an even broader range of legal operations:

  • Enterprise Legal Management
  • Matter Management
  • Legal Spend Management
  • Contract Lifecycle Management
  • Legal Service Requests
  • Legal Holds

As you can see, artificial intelligence is already a big part of our legal lives. And it’s not just a piece of software that your company uses because it’s handy. These are complex machine learning solutions that transform your legal practice by making you more efficient and creating space for your legal department to focus on legal work instead of taking care of routine administrative tasks.

How AXDRAFT uses AI and ML to facilitate the work of lawyers.

At AXDRAFT, we take the most out of artificial intelligence and machine learning to create the best automation experience possible. Our powerful AI engine is constantly learning and allows us to automate contracts in any language, and of any complexity. It can generate 100-page contracts in several seconds, allowing lawyers to spend 80% less time drafting and proofreading documents and free over 40% of work week for meaningful tasks.

But it’s not just that. We also use GPT-3, a machine learning technology that transforms legal language into a simple one. With GPT-3, you can rest assured that even non-legal personnel and clients with no legal background will have a clear understanding of every clause in your contract.

Future of AI in legal. How will AI transform legal work?

No, there won’t be an invasion of robot-lawyers. And we are far away from technology cyberpunk. You probably won’t meet a single robot-lawyer representing a company in court in years to come. Yes, some jobs, especially those related to data processing will most likely be redundant. But AI is in turn creating new positions, such as legal engineers and operators that have to set up and set the algorithms for the software to operate and learn properly.

With broader implementation, AI will give most lawyers the freedom from mundane tasks and create opportunities for them to concentrate more on analysis, thinking, and advising to their clients. These are the processes that won’t happen without human input.

AI is creating new positions, such as legal engineers and operators that have to set up and set the algorithms for the software to operate and learn properly.

All of this is just making AI an effective tool that lets lawyers work faster, better, and be more cost-efficient. In addition, corporate legal departments can expect more AI involvement into contract lifecycle management and third-party review, greater billing management and even more seamless document automation.

Conclusion

No matter how much we love learning from movies, there is one thing that the real world has shown us—legal AI is here to help lawyers, not replace them. And despite rapid technological breakthroughs, in 2021 artificial intelligence is nowhere near to taking care of creative problem solving. Let’s not find out yet how AI interprets law.

AI-driven tools are taking care of routine tasks and help lawyers take care of work faster and mistake-free. It is a big helper when it comes to building risk management strategies, being able to process massive amounts of data in seconds. And artificial intelligence is definitely more suited to working on routine, repetitive tasks than a lawyer that constantly wants to deal with important matters only. Well, this is exactly what AI for legal teams is here to help them do!

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