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29 February 2024 ·

Integrating generative AI in legal practice: 2024 - the year the legal field joins the tech revolution

 

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The legal profession has often been perceived as archaic and slow to embrace technological advancements. In stark contrast to fields like medicine, where technology and practice evolve in close concert, the legal sector's predominant reliance on tools such as Microsoft Word underscores a certain technological inertia. However, the World Commerce & Contracting (WorldCC) 2023 Benchmark report (CCM: The journey to operational excellence)1illuminates a growing recognition within the sector, with 81% of respondents acknowledging the selection and adoption of technological tools as a high or medium priority, a sentiment that has remained steady since 2021.

This indicates a burgeoning desire and necessity for technological integration, setting the stage for a pivotal transformation propelled by the advent of Generative Artificial Intelligence (GenAI) software, underpinned by sophisticated Large Language Models (LLMs). 

The legal community is abuzz with the potential of GenAI, as legal practitioners globally commence exploratory applications of this revolutionary technology. According to the WorldCC 2023 AI in Contracting report, the initial forays into GenAI utility have predominantly centered on metadata extraction (44%), clause extraction (39%), contract analytics and automation (38%), and on-demand clause generation (33%).2

The inherent appeal of GenAI applications, designed around LLMs, lies in their singular focus on addressing discrete use cases. This specificity enables organizations to target their most critical pain points for technological intervention, avoiding the broader complexities associated with full-scale process automation.

GenAI-driven applications, I call them “GenAI native,” constructed upon the foundation of LLM technology, epitomize purpose-oriented innovation, crafted to resolve distinct challenges encountered by users. These GenAI native tools introduce a novel approach in task execution, where natural language prompts initiate operations, leading to the generation of new, contextually relevant content.

This diverges fundamentally from previous iterations of AI, which were predominantly programmed to replicate human actions. The predictive capabilities of GenAI represent a transformative leap for the legal domain, offering an assistant-like functionality that enhances efficiency and productivity. In this light, 2024 promises to be the year the legal discipline is poised to fully embrace and integrate the technological advancements epitomized by the GenAI revolution.

How are GenAI native contract applications different?

The advent of GenAI applications in the realm of contract management represents a significant departure from traditional Contract Lifecycle Management (CLM) systems, heralding a new era of flexibility, efficiency, and adaptability. Unlike conventional CLM platforms, which rely on pre-defined rules and a repository of standard clauses to automate contract drafting through a rigid, step-by-step process, GenAI-powered contract applications leverage Large Language Models (LLMs) to respond dynamically to user-generated natural language prompts. This allows for a more intuitive and bespoke approach to integrating technology into current processes.

The flexibility offered by GenAI native applications, exemplified by solutions like Robin AI3 and Limelight Intelligence,4 lies in their ability to address distinct challenges within the contract lifecycle with minimal initial investment. Organizations can deploy these technologies to target areas where they face the most significant bottlenecks, whether in drafting, negotiation, contract metadata extraction, or obligation management. This bespoke approach stands in stark contrast to the one-size-fits-all methodology inherent in traditional CLM systems, which, despite their proliferation over the past two decades, have encountered substantial implementation challenges, evidenced by a reported 61% failed to deliver the expected benefits.5 For organizations yet to adopt any technological solutions for contract management, GenAI native application presents an agile and scalable option. It affords the opportunity to select specific functionalities that directly address the company's unique requirements.

However, it is crucial to acknowledge the inherent limitations of GenAI technologies. The predictive nature of LLMs, trained on vast datasets, may not always align perfectly with the specific context or requirements of a given task, occasionally leading to inaccuracies or "hallucinations."

To mitigate these risks, organizations must carefully evaluate their specific needs, scalability considerations, and the imperative of maintaining the confidentiality and security of documents and data uploaded.

Overall, the transition towards GenAI-native applications is a paradigm shift towards more adaptive, user-centric technological solutions in the legal domain. This shift promises to enhance the efficiency and effectiveness of legal work, albeit with a cautious approach to their implementation and integration within existing legal frameworks and practices.

Navigating the balance: The risks and rewards of LLM technology in legal practice

The integration of LLMs such as ChatGPT and BART into legal workflows has sparked considerable debate within the industry, particularly concerning the technology's inherent risks and potential rewards. A prevalent hesitation among legal professionals has been to adopt a "wait-and-see" approach, observing the experiences of peers and competitors before committing to this new technological frontier. However, this stance overlooks the critical momentum GenAI technology has gained since its broader accessibility in December 2021, signaling a new era that could leave the cautious behind.

To demystify LLMs and encourage proactive engagement, legal practitioners are urged to experiment with these tools using non-sensitive materials to explore their capabilities. LLMs have demonstrated proficiency in various tasks that can augment legal operations, including data extraction, organization, analysis, comparison, summarization, and document drafting. These functions highlight the potential of LLMs to act as valuable assistants in the legal domain, streamlining processes and enhancing productivity.

A study examining the efficacy of ChatGPT 3.5 in legal contexts revealed notable improvements in task execution, particularly in contract drafting, where speed increased by 24%.6This study, which spanned multiple tasks, consistently showed enhancements in both speed and accuracy, underscoring the technology's potential to elevate the quality of legal work, especially for those with varying skill levels.

The dialogue surrounding LLM technology in the legal field should not be framed purely in terms of risks versus rewards but rather as an opportunity for innovation balanced with prudent oversight. By embracing GenAI with an informed and strategic approach, legal professionals can harness its potential to revolutionize practices while safeguarding against its pitfalls, ensuring that the march towards technological integration is both progressive and secure.

Seizing the moment: the imperative for action in 2024

The urgency for the legal sector to embrace LLM technology in 2024 is underscored by the declining productivity within the field, a concern highlighted by the 2023 Report on the State of the Legal Market from the Thomson Reuters Institute. The report calls out “in the latter part of 2022 and continuing into the new year, multiple challenges have emerged to threaten law firm profitability, including falling demand and productivity, rising expenses, changing client preferences, and economic turmoil.” 7 LLMs emerge as a beacon of innovation in this context, offering a transformative approach to legal work and a redefinition of professional roles within the discipline.

The capabilities of LLMs to efficiently draft, analyze, compare, and summarize not only herald a shift in task execution but also in workforce dynamics. Far from rendering human intervention obsolete, this technology augments the legal profession by reallocating human intellect to more complex and strategic tasks. Consider the paradigm where an AI-assistant undertakes the preliminary analysis of a vast array of contracts, pinpointing discrepancies against the company's standards or playbook. This preliminary review allows legal professionals to concentrate on nuanced strategy and negotiations for the identified outliers, thereby enhancing efficiency and strategic focus. This shift is not a diminishment of human roles but an elevation, enabling professionals to engage more deeply with the aspects of their work that require irreplaceable human judgment and creativity.

Embarking on the GenAI journey

As the legal community transitions from understanding the potential of GenAI to practical implementation, the focus shifts to the strategic deployment of this technology within organizations. The key considerations for this transition are scalability and security, ensuring that the adoption of GenAI aligns with the organization's broader objectives and compliance standards. The exploratory phase with tools like ChatGPT lays the groundwork for understanding LLM technology; however, applying GenAI to handle sensitive and confidential legal documents necessitates an enterprise level approach where security is of up most importance.

To illustrate the practical application of GenAI technologies, let's consider contract management as a focal point for many organizations facing efficiency challenges. The journey towards integrating a GenAI solution begins with a meticulous evaluation of your team's current processes and pain points:

  • Assessing the contract lifecycle: Start by examining the contract lifecycle to identify stages that consume disproportionate amounts of time or resources. This analysis will help pinpoint where a GenAI solution can have the most significant impact, whether in initial drafting, review, negotiation, or post-award contract management.
  • Addressing specific challenges: Look closely at tasks that are currently inefficient or lack adequate support. This might involve areas like complex contract analysis, compliance monitoring, or extracting meta data from documents. Highlighting these areas ensures that the GenAI solution you choose is tailored to address your most pressing needs effectively.
  • Evaluating document management needs: Consider your existing document management practices to determine if they are sufficient or if a more integrated solution is required. A GenAI application that includes a repository can streamline workflows, making it easier to store, access, and manage contracts throughout their lifecycle.

Choosing an LLM-based application that is GenAI-native promises flexibility, ease of integration, and cost-effectiveness. This approach ensures that the selected technology not only addresses immediate needs but also integrates seamlessly into existing workflows, providing a scalable solution that evolves with the organization.

In conclusion, the GenAI revolution in the legal sector is not a distant future but a present reality. The analogy that "Google provided access to the world's library, while ChatGPT offers access to the world's librarian" encapsulates the paradigm shift underway. The question is no longer if legal practices will be transformed by GenAI, but rather when and how professionals will navigate this change. The call to action is clear: Begin the journey of education and exploration with GenAI software today, equipping yourself and your organization with the knowledge necessary to discern and adopt the most suitable GenAI solution for your legal tech transformation.

END NOTES

  1. WorldCC 2023. CCM: The journey to operational excellence
  2. WorldCC. July 2023. AI in contracting: an untapped revolution
  3. https://www.robinai.com/
  4. https://www.limelightintelligence.com/
  5. WorldCC. October 2023. Keep it simple: The secret of successful Contract Lifecycle Management Implementation
  6. Jonathan H. Choi,  Amy B. Monahan, & Daniel Schwarcz. 2023. Lawyering in the age of Artificial Intelligence. Minnesota Legal Studies Research Paper No. 23-31.
  7. Thompson Reuters Institute. 2023. 2023 Report on the State of the Legal Market: Mixed results and growing uncertainty - Thomson Reuters Institute.

ABOUT THE AUTHOR

Dr. Milva Finnegan brings over two decades of expertise to the field of contract management. Holding a Doctorate in Economics with a specialization in Business Law from the University of Vaasa in Finland, her scholarly work has pioneered the intersection of contract law and design, advocating for the creation of simplified, user-friendly contracts. Dr. Finnegan's current research endeavors are centered on the integration of Generative AI (GenAI) technologies within contract lifecycle management, contributing to the forefront of legal tech innovation. She is presently collaborating with Limelight Intelligence on the development of an advanced GenAI native application dedicated to post-award contract management, further cementing her role as a thought leader in the domain.

Follow her on LinkedIn: https://www.linkedin.com/in/milva-finnegan-89065376/  To read her dissertation go online to University of Vaasa publications at: https://osuva.uwasa.fi/handle/10024/1248

The legal profession has often been perceived as archaic and slow to embrace technological advancements. In stark contrast to fields like medicine, where technology and practice evolve in close concert, the legal sector's predominant reliance on tools such as Microsoft Word underscores a certain technological inertia. However, the World Commerce & Contracting (WorldCC) 2023 Benchmark report (CCM: The journey to operational excellence)1illuminates a growing recognition within the sector, with 81% of respondents acknowledging the selection and adoption of technological tools as a high or medium priority, a sentiment that has remained steady since 2021.

This indicates a burgeoning desire and necessity for technological integration, setting the stage for a pivotal transformation propelled by the advent of Generative Artificial Intelligence (GenAI) software, underpinned by sophisticated Large Language Models (LLMs). 

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Dr. Milva Finnegan Karhu
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