According to recent studies, the use of AI for legal processes has jumped from 39% in 2023 to 82% in 2024, and by 2026, 25% of first-draft contracts will be generated entirely using AI.

AI has proven to be faster and more accurate than human lawyers, especially with repetitive processes and tasks involving large amounts of data. As reported by Thomson Reuters, its adoption can free up 200 hours of manual labor for law firms and in-house legal teams every year.

While many lawyers are still skeptical about the use of AI, its growing adoption means one thing: failure to master AI skills could mean a competitive disadvantage in the near future.

To help you get started, this guide explains the basics of AI, its use cases, ethical considerations, and best practices for implementing it.

What is AI?

AI, short for Artificial Intelligence, broadly refers to the imitation of human intelligence by machines and computer systems.

Although the first use of AI occurred in the 1950s, its popularity surged in late 2022 with the viral release of ChatGPT.

The world is currently in the middle of an AI revolution, with countless AI-powered applications coming onto the scene every day.

Even without knowing what AI is, you've probably interacted with one. If you’ve used virtual assistants like Siri and Alexa, you've already had a first-hand experience with AI.

But AI isn’t limited to software applications. The technology is increasingly finding its way into hardware and physical systems. Think about self-driving cars, industrial robots, and delivery drones.

Optimus, Elon Musk's humanoid robot, is another good example of AI in action. The robot can see, learn, communicate, and make decisions independently like humans.

Common AI terminologies

The world of AI is vast and fascinating. But it’s easy to get lost in all the buzzwords and jargon. Here, we’ve explained some of the most common AI concepts in the context of legal practice to help you make sense of it all.

Generative AI

Generative AI is a subset of AI encompassing the use of advanced, self-learning algorithms to create unique texts, images, and other forms of output, typically in response to instructions or prompts from end users.

ChatGPT is the most popular example of this. This software interacts with humans naturally, helping them generate a variety of output (images, blog posts, software codes, contract drafts, etc.) on demand.

Let’s say you have a 100-page legal document you need to summarize. This should take about 3 hours if done manually. However, if you upload this document to ChatGPT and ask it to generate a summary for you, it’ll do it in less than 10 minutes.

Also read: 7 ChatGPT Prompts for In-House Legal Teams

Machine Learning (ML)

ML is the process by which computer systems and algorithms continuously learn from data.

Legal AI tools are able to identify patterns, interpret instructions, and make decisions around legal scenarios because they've been trained using a vast collection of legal data. These systems continuously update their data based on new information and the outcomes of various interactions with real-world users.

In other words, ML allows computer systems to “teach” themselves and get better at generating useful outputs over time.

Natural Language Processing (NLP)

How is AI able to interact with humans in natural language? The simplest answer is Natural Language Processing (NLP).

NLP is a field of AI responsible for how AI-powered systems understand and respond to human language in a meaningful and useful way.

Thanks to NLP, you can "chat" about almost any legal concept with an AI-driven tool. You can ask about specific case law, request a thorough review of a document, inquire about complex concepts, and much more.

AI for Legal: How lawyers use AI

“I really believe that if AI is deployed in the right way, it’s going to allow us to elevate and to focus on the right aspects of the work, the work that offers the most value”

~ Mary O’Carroll, Chief Operating Officer at Goodwill
Why advances in AI present a golden opportunity for legal ops

Goldman Sachs reports that nearly half (44%) of legal tasks can be automated with AI. A different study by ACC revealed that one-third of in-house legal departments have already adopted AI in their day-to-day activities.

So, how exactly do lawyers use AI?

Many studies have investigated the various use cases for AI in the legal profession, and while there are several areas of application for this technology, most lawyers use AI for the following:

Also read: Exploring AI in Legal Operations

#1 Legal research

Bloomberg Law’s report shows that 53% of legal professionals use AI to conduct legal research. This process involves searching legal databases, identifying case law, and drawing answers to various queries related to legal practice.

Let’s say you want to determine the legal implications of a merger between two companies in a highly regulated industry. Instead of manually scouring search engines and libraries for information, you could feed an AI-powered legal research tool with your questions, and it’ll provide you with information tailored to your needs.

Now, all you need to do is apply discretion, verify the provided information, and move on to the next task on your to-do list.

#2 Reviewing legal documents

Document review is a critical part of every legal counsel's job. It involves assessing documents like contracts and correspondence to identify potential risks and ensure they serve the organization's best interest.

34% of legal departments use AI to streamline legal review processes. This saves time and allows them to analyze documents at scale.

“If you try to read a complex contract carefully, from front to back, and expect to understand it on just the first read-through, that’s wishful thinking (and potentially very messy).”

~ Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: How to Read a Contract

#3 Summarizing information

The legal profession involves a lot of reading. But sometimes, documents might contain information you don’t necessarily need at the moment. Running through each page to extract important information can be strenuous.

But thanks to AI, you can make the process fast and painless.

This is a common use case among legal professionals, with 42% saying they use AI to summarize legal documents.

#4 Contract drafting

Studies estimate that 60-80% of businesses are governed by contracts, with large organizations managing, on average, 350 contracts every week.

Lawyers are responsible for drafting most of these contracts. However, the process is significantly routine and time-consuming. 62% of legal professionals say contract drafting and editing constitute 50% of their work in contract management.

AI tools have shown impressive capabilities in creating comprehensive contract drafts significantly faster than humans. Legal teams have learned to use these tools to create contracts more efficiently.

Also read: The Future of Legal Documents: What’s an AI Contract Generator?

#5 E-Discovery

E-discovery is a type of digital investigation where legal professionals attempt to find evidence in emails, online documents, social media, and other digital channels that could be useful in court proceedings.

While e-discovery is crucial for legal investigations, manually reviewing data across devices and channels can be incredibly time-consuming. Experts use AI to provide quick analysis of evidential data, allowing them to pinpoint areas that contain important information.

Benefits of AI for lawyers

Source: Shashank Bijapur via LinkedIn

AI is fast, efficient, and scalable. This translates into several benefits for lawyers who have incorporated it into their workflows. Major benefits include:

#1 Minimized risk of errors

Humans are prone to errors, especially when fatigued or under pressure.

While AI isn’t completely infallible, well-trained systems are comparatively less prone to errors because they do not share our cognitive limitations.

An AI-powered tool, as long as it has been properly trained and constantly updated, can follow instructions to a T and perform legal tasks without burning out or feeling fatigued.

#2 More work in less time

Brainspace, an investigative analytics platform, was able to scan millions of emails associated with the Enron scandal in approximately one hour. At the time of the original trial, this same task took a team of lawyers and investigators months to complete.

In a survey by LexisNexis, 71% of legal professionals cited the ability to deliver work faster as the biggest benefit of using AI. Lawyers who can use AI to automate routine tasks are generally more productive, achieving more in their day-to-day.

#3 Extra bandwidth for more valuable contributions

Thomson Reuters reports that AI could free up an additional 4 hours per week for legal professionals. If you work an average of 48 weeks a year, you could save an extra 200 hours just by streamlining manual processes with AI.

AI takes up a large chunk of your routine workload, allowing you some free time to make more valuable contributions to your organization.

#4 Less stress and more job satisfaction

AI contributes to job satisfaction and stress reduction among lawyers by helping them break the cycle of mundane tasks. With fewer repetitive, low-level assignments, they can focus on completing more stimulating work in their day-to-day. 

This enhances their sense of accomplishment, ultimately improving job satisfaction and alleviating stress.

#5 Reduced running costs

In a study by the Association of Corporate Counsel and Everlaw, 25% of legal professionals reported that the use of AI has reduced operational costs for their teams. Another 49% stated that they’re optimistic about AI’s ability to help them operate on a lean budget.

This is possible mainly because AI can automate tasks at scale, allowing law firms and in-house legal departments to take on more work without necessarily increasing headcount.

Also read: The Value of Using an AI Legal Assistant

Top AI tools for legal practice

The legal industry has proven to be a fertile ground for AI, considering the rate of its adoption and the rising number of AI-powered tools hitting the scene every quarter.

Lawyers are increasingly turning to AI for routine tasks, helping them save time and hit new productivity levels. Here are some of the most popular AI tools built for specific use cases.

"AI can be the transformational force for legal operations, bringing to the table its capacity to streamline workflows, cut down costs, and propel business growth."

~ Tom Stephenson, V.P of Community and Legal Operations, Legal.io

#1 SpotDraft AI—Contract Lifecycle Management (CLM)

SpotDraft AI is an ecosystem of smart tools designed to help you accelerate contract management processes using AI.

If you want to create a contract draft for a new business partner, SpotDraft's DraftMate will collect documents related to the deal and generate a standard contract template you can fill with your partner, all in five minutes.

Its Smart Data Capture allows you to automatically extract important data from your contracts, eliminating hours of manual data entry for your team.

Furthermore, it also automates contract review processes using its AI review assistant, VerifAI.

With VerifAI, you can ask conversational questions about your contracts and get detailed answers, including references and suggestions based on the collective knowledge of hundreds of lawyers. It also allows you to upload a custom playbook so it can review your contracts according to your own guidelines.

SpotDraft integrates AI at various stages of your contract lifecycle, ultimately helping you close deals ten times faster.

#2 Lexis+—Legal research

Lexis+ is an AI legal research assistant developed by Lexis Nexis. Powered by a robust database of legal information and insights from over 2000 practitioners, Lexis+ is designed to help legal professionals handle legal research seamlessly.

It comes with features like Pinpoint, which helps you to narrow down your search results more accurately. Lexis+ also supports conversational search, which allows you to ask complex questions related to your search queries.

The platform is also capable of summarizing various legal materials into concise forms, allowing you to get access to valuable information quickly.

Also read: Choosing the Right Legal Research AI Tool for Your Team

#3 Brainspace—E-discovery software

Brainspace utilizes ML and visual analytics to help lawyers make sense of data when handling complex cases and large volumes of electronic evidence.

One of its most popular features is the Cluster Wheel, which automatically scans through massive amounts of data, identifying and grouping related information. This makes it easier for lawyers and investigators to spot important details at a glance.

Brainspace also automates communications analysis, exposing how subjects are connected through their interactions.

Also read:  Top 5 Free AI Tools for In-House Legal Teams

Common concerns and considerations for AI in legal 

The use of AI for legal work has been met with mixed reactions. While it's incredibly beneficial for legal teams, it also raises important questions and considerations that must be carefully addressed.

#1 Inherent bias

“AI can be a tool in your toolbox that can help support decision making, but it shouldn't make the decisions. “

~ Cory Lamz, VP Legal, Buoy Health
Building relationships with a problem-solving mindset

The behavior of an AI system is heavily influenced by its underlying training data. If an AI tool is trained using data sets that contain negative views about specific groups or ideologies, such views might be reflected in its responses.

Pro tip: Before onboarding a legal AI tool, do your due diligence on the quality of its training data. Regularly audit your AI tools by testing them against real-world scenarios. This will help you spot potential biases before they cause problems for your team.

#2 Data privacy

According to Bloomberg Law’s report, 70% of legal leaders are worried about the security of AI tools and the potential exposure of private data to unauthorized entities.

This is because AI tools are driven by ML and are constantly updating their training set using data from user inputs. If you input prompts containing sensitive information, the AI might absorb this and retain it as part of its training set, potentially using it in materials for other end users.

Pro tip: Always anonymize sensitive information when feeding your prompts to your AI. You can do this by using identifiable placeholders for each sensitive detail you wish to protect. This can be company information, pricing, or any Personally Identifiable Information (PII).

#3 Occasional hallucination by AI

In 2023, two New York lawyers came under fire for submitting AI-generated briefs that contained six made-up cases and erroneous quotes.

This, alongside several similar events, has raised concerns over the integrity of AI-generated outputs.

AI tools can be prone to hallucinations—presenting false information with high confidence. When used for legal purposes, errors like this can come with serious repercussions.

Pro tip: Human oversight is invaluable when using AI tools. It is important to verify the information in AI-generated content and prioritize tools built explicitly for legal purposes. Also, create an AI use policy detailing how your legal team can safely incorporate AI into their workflows.

#4 Intellectual Property (IP) concerns

With AI-generated content in the legal ecosystem, determining ownership is a complex issue for legal leaders. Traditional IP laws, originally developed with human authorship in mind, have yet to fully address AI.

So, the questions persist:

Who owns the rights to AI-generated materials? Is it the AI provider, the user who prompted the AI, or the AI itself?

Additionally, AI models are trained on vast datasets that might include copyrighted materials. Lawyers are concerned about users unintentionally benefiting from derivatives of copyrighted work and potentially getting sued for infringement.

Pro tip: Laws around the IP rights of AI-generated materials are still evolving. Keep your fingers on the pulse and evolve with the regulations as they change.

#5 Job security

Source: Sharyn Ch’ang via LinkedIn

The growing use of AI in legal has raised concerns about the job security of legal professionals, especially those in lower positions.

AI has so far shown impressive capabilities in performing many operations traditionally handled by lawyers. Complex tasks that typically take hours to complete (manually) can now be cleared in minutes using AI. This has sparked fear among some lawyers who worry about being replaced by machines.

Pro tip: AI is not here to "steal" your job. At the end of the day, human expertise and oversight are paramount to the successful use of these tools. Invest time and resources into mastering the use of AI in legal practice, and you will be indispensable.

Also read: Will AI Replace In-House Lawyers?

Source: Andrew Cooke via LinkedIn

Implementing AI in your legal department

How you implement AI in your legal department can be the difference between hitting new productivity milestones and getting stuck in damage control.

Here are some tips to help you get off on the right foot:

#1 Assess your current needs

This step involves examining your current workflows for areas that need streamlining. What routine tasks are consuming the most time? How many of these tasks can you streamline with AI?

As already covered in previous sections, legal departments typically require AI for processes like contract reviews, legal research, and document drafting.

#2 Get your senior leadership on board

Numerous studies have shown AI's potential to ramp up the productivity of law firms and in-house legal teams. However, it is important to make sure your CLOs and other leaders share the same enthusiasm.

When presenting the idea:

• Focus on tangible benefits like cost reduction, improved efficiency, and competitive advantage.
• Back your claims with data from credible sources.
• Acknowledge ethical concerns and outline your plan to navigate them.

#3 Scour the market for the best providers

You can use platforms like G2, Gartner, and TrustRadius to find various AI providers. Prioritize tools specifically designed for legal work.

Key things to look out for:

• What are users saying about customer service?
• What features does the legal AI tool include? Are these features relevant to your needs?
• Does the provider have any industry awards or recognitions?
• Does the solution support integration with third-party systems?
• What is the provider’s pricing model?
• Does the provider support a free trial?

Knowing these will help you narrow down to the most suitable AI solutions. After this phase, you can reach out to the providers on your shortlist, communicating your needs and weighing your options against the responses you receive from them.

#4 Develop an implementation plan

A good rule of thumb is to roll out the tool in phases. Start with a pilot program where you implement the tool at a small scale over a defined period. Monitor its performance and weigh it against considerations like speed, accuracy, and user satisfaction.

If it meets your criteria, you can begin introducing it on a full scale.

#5 Invest in team training

“When you implement new technology or processes and tell your team that you’re going to take 40% of what they do and do it in a way that's way faster and more effective, the automatic reaction is, ‘You're taking my job.’ In that case, I help my team understand that we’re just doing this to become the creative and innovative in-house lawyers we can be while co-leading business. The simplest piece of advice I could give to anybody, in business or otherwise, is to create that headspace; Take a step back, open your mind to the possibility of doing things in a more modern and effective way.” 

~ David Lancelot, ex-VP Global Head of Legal, eBay Classifieds
Embracing Legal’s Role as Business Co-Leaders

An AI tool is only as good as the person punching in the commands. You must ensure that your team members are equipped with the right skills to maximize the tool’s capabilities. Invest in workshops, online courses, consultants, and other resources to help them upskill.

Alongside mastering AI skills, your team members must understand the various ethical considerations of AI use and the need to comply with established policies when using these tools.

#6 Regularly evaluate the AI’s performance 

Create a schedule for performance reviews where you evaluate the AI against established criteria. Also, discuss any challenges your team members have encountered with the tool.

In some cases, you might require your service provider to adjust specific areas to make the AI tool more beneficial for your department.

Download our AI Playbook for free

What is the future of AI for lawyers?

Source: Shashank Bijapur via LinkedIn

It is true that the proliferation of AI has been met with mixed feelings. However, there’s no denying that its adoption has grown significantly in the last few years.

Global and regional policies are currently evolving to address emerging concerns associated with AI use. But in the face of all these developments, the future of AI in legal practice remains brighter than ever.

According to predictions by Precedence Research, the global market value of AI in the legal industry will grow from $89.79 million in 2024 to $1.34 billion by 2034.

This is fueled by the increasing belief in AI’s ability to help lawyers become more productive. In a study by Thomson Reuters, 79% of surveyed law firms express optimism about AI, a 10% increase from 2023. Additionally, 30% of Thomson Reuters’ respondents expressed concerns about slow adoption in their companies, citing a loss of competitive advantage as a potential outcome for disregarding AI.

So, if you’re still sitting on the fence, there’s no better time to re-evaluate your stance!

Ready for law 2.0?

With the rise of tech-savvy lawyers, the legal profession, known to be resistant to change, is experiencing a historical face-lift.

AI is here to stay, and if you want to remain competitive in the modern legal industry, embracing this technology (in accordance with established principles) will be a step in the right direction.

Ready to join the revolution? Get started with SpotDraft, our AI-powered CLM designed to help you close deals ten times faster.

Click here to get a demo tailored for you.

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