Picture a day with zero backlog in your legal department.
It's not as far-fetched as it sounds. The future of legal tech is knocking at our doors, bringing tools and trends that promise unprecedented efficiency.
In this blog post, you'll learn about trends and innovations that are making this dream a reality, and how to leverage these advancements for your team.
Also read: How Generative AI is Transforming the Legal Tech Landscape
#1 By 2027, governance, risk, and compliance (GRC) technologies will be AI-powered
The post-pandemic shifted the needle towards deglobalization, which led to increased complexity in local regulatory environments. Due to the spread of a diverse range of such regulations, risk management and predictions became more common. Completed and time-consuming.
Legal professionals will rely on GenAI-powered Governance, Risk, and Compliance (GRC) to tackle such growing complexities. GRC systems can efficiently handle high volumes of GRC tasks, including:
- Multi-channel information management
- Risk benchmarking
- Predictive risk analysis
GRC technologies have already been adopted. IBM's OpenPages, for instance, uses GenAI to generate easily searchable issue summaries and tags to streamline audit processes. Similarly, MetricStream's AiSPIRE platform combines GenAI with other AI/ML models to sense and predict risks proactively.
This trend is set to continue, with 51% of GRC vendors either currently offering AI capabilities, planning continued investment in AI/ML, or aiming to adopt AI within the next three years.
As regulatory complexities increase in the legal industry, the adoption of GenAI-powered GRC software will become advantageous and essential for effective risk management and compliance.
#2. Organizations will 3X their funding for legal innovation by 2025
“The COVID-19 pandemic has heaped even greater workloads onto already thinly stretched in-house legal teams, with staffing levels holding flat. Legal leaders are seeing that other departments have found success with their tech investments and also significant advancements in the legal tech market. This is driving their appetite to expand their use of technology to support workflows and meet productivity demands.”
~ Zack Hutto, Director, Advisory, Gartner
5 Legal Technology Trends Changing In-House Legal Departments
Legal departments are beginning to make more long-term investments in their in-house talent and technology infrastructure to compensate for some of the lost access to external expertise.
This includes procuring various legal innovations and technology and investing in training resources to make law firms and in-house counsel more efficient and in tune with the requirements of the modern legal landscape.
Additionally, the positive contributions of technology in other sectors, with the current advancements in the legal department, have been a significant motivating factor for legal leaders, who are beginning to see the many positive possibilities associated with incorporating digital innovation and technology further into legal workflows.
The industry is expected to continue at this pace, and by 2025, funding for legal tech will have tripled.
#3. By 2026, AI will generate 25% of first-draft contracts and other legal documents
The unprecedented capabilities displayed by ChatGPT in 2022 took the world by storm. While it wasn’t the first time algorithms demonstrated human-like abilities, ChatGPT's ability to engage in natural, open-ended conversations, generate human-quality text, and adapt to a wide variety of contexts set a new benchmark for Large Language Models(LLM), ushering in a new era for generative AI.
Generative AI has since been making inroads into companies and law firms. However, advocates and critics have met it with mixed feelings due to ethical implications, data privacy, and performance reliability concerns.
Regardless, AI's positive contributions to legal tech are already evident, with several tech providers incorporating AI functionalities into their infrastructure.
“Artificial Intelligence just may well be the final frontier in terms of how legal services are utilized and provided. As in-house counsel, don’t run away from it and don’t ignore it. Rather, embrace it as, ultimately, it will allow you to do things lawyers love to do: thinking, analyzing, and counseling, while leaving the “grunt” work to the computer.”
~ Sterling Miller, CEO Hilgers Graben PLLC
Ten Things: Artificial Intelligence – What Every Legal Department Really Needs To Know
SpotDraft, for instance, has recently introduced two AI-powered tools, VerifAI and SpotDraft AI, as part of its contributions to the AI revolution. VerifAI is an emerging tech specifically designed to streamline contract review processes, while SpotDraft AI offers a broader range of functionalities, including contract drafting, due diligence, and contract analytics.
The outlook for AI in legal tech innovation appears promising. Studies predict that 25% of first-draft documents will be AI-generated by 2026.
#4. Legal analytics is set to hit new highs
It is no news that data is the new oil of modern business, and in legal practice, it's proving to be a transformative force.
While data analytics is a relatively new entrant in the legal profession, it is rapidly gaining traction in legal services. This is due to the increasing availability of legal data, the development of sophisticated analytics tools, and the growing recognition of data-driven decision-making as a catalyst for success and innovation in legal processes.
Legal data analysis involves using data analysis and machine learning to identify and assess legal risks, optimize workflows, improve negotiation strategies, and analyze legal team performance, among other things.
One key trend is incorporation of AI in legal data management and analysis to expedite the entire process. Deloitte found that 75% of legal and regulatory compliance teams expect AI to heavily impact their data management and analysis practices, while 43% believe they can use AI to proactively mitigate legal risks.
#5. CLM will be as ubiquitous as ERM and CRM
By 2025, law firms are more likely to rely on contract lifecycle management (CLM) to streamline their contract management operations.
Many law firms today have already done the work to centralize their finance and resource-related activities within single systems, as well as their customer relations and sales. Centralizing how they manage contracts — from negotiation through execution and after termination — will similarly boost the organization’s ability to reduce cost, manage risk and improve performance.
“Although a CLM solution might seem costly in the early stages, companies should have it in place and build workflows within the tool to process contracts better. By doing so, they can keep legal costs low in the growth stages and close deals faster. Moreover, they will have clear visibility into the contract pipeline and use their legal resources to optimize workflows better for yielding maximum results."
~ Igor Poroger, the Director of Legal (EMEA) at Vectra AI
Streamlining Legal Processes: Advice from 7 GCs and Heads of Legal
Five recommendations for taking full advantage of technology as an in-house counsel
While technology has shown to be incredibly beneficial to the legal industry, its adoption must be approached with caution and prudence.
The tips discussed below are mission-critical for in-house counsel who aspire to get the best results from legal tech implementation.
#1 Think long-term. Avoid ad-hoc solutions
In-house counsel should avoid implementing legal technology solutions as a reaction to immediate problems or short-term needs. Instead, they should adopt a thoughtful approach and consider how technology can align with and serve the long-term goals and objectives of the client, legal department and the law firms as a whole.
This involves assessing current processes, identifying areas for improvement, and evaluating how technology can streamline operations, enhance efficiency, and reduce costs in the long run.
#2 Identify and prioritize specific areas that require technology
Not all aspects of legal work require the same level of technological intervention. In-house counsel should recognize and prioritize specific areas or tasks that can benefit the most from digital transformation.
This might include contract management, e-discovery, compliance monitoring, or legal research, among others. By focusing on these areas, for example, you can effectively allocate resources and ensure that your organization's technology investments have a meaningful impact on your team’s operations.
“The key to success is to first identify specific issues that can be solved with automation rather than deploying legal technology in search of a problem.”
~ Robert van der Meulen, Head of PR, Gartner
5 Legal Technology Trends Changing In-House Legal Departments
#3 Always stay in touch with the legal tech industry
The legal tech space is constantly evolving, with new tools, platforms, and innovations emerging regularly. To make the most of technology, in-house counsel should remain engaged and informed about the latest developments.
This includes attending conferences, webinars, and workshops, as well as subscribing to relevant publications and maintaining a network of contacts within the legal innovation community.
“If you think that you're doing everything perfectly, you're not going to grow. There's always an opportunity for self-improvement.”
~ Doug Luftman, ex-DGC, DocuSign
The Key to Success as an In-House Legal Counsel & Leader
This knowledge not only enables you to make informed decisions when adopting new and emerging technologies but also ensures your team remains compliant with changing regulations and industry standards.
#4 Create a team responsible for vendor investigation
Evaluating and selecting the right legal technology solutions can be a time-consuming and complex process. To streamline this, you should establish a dedicated team responsible for researching, evaluating, and recommending technology vendors.
This team should comprise individuals with the skills and a mix of legal, technical, and procurement expertise to ensure a comprehensive assessment of each vendor's offerings.
The team's primary responsibilities should include:
- Identifying potential vendors that align with the organization's specific needs
- Conducting in-depth research on each vendor's products, features, and pricing
- Requesting demos and evaluating the usability and effectiveness of each solution
- Negotiating contracts and ensuring alignment with the organization's legal and financial requirements
- Providing ongoing support to ensure seamless implementation and adoption
#5 Don’t get carried away by the benefits
While legal technology offers numerous benefits, it's important to approach its adoption with a balanced perspective on legal innovation and ethical considerations. Carefully consider the potential drawbacks and limitations of specific technologies before implementing them.
This includes evaluating the potential impact on workflow, data security, costs, and its overall alignment with the team’s productivity goals.
By adopting a measured approach, you can maximize the benefits of legal technology while minimizing potential disruptions and ensuring a smooth transition.
Scale legal services with legal innovation and technology
“In an environment where legal leaders are seeking to reduce spending and yet carry out more complex, unpredictable legal work, legal departments that can leverage technology solutions and legal operations to drive greater efficiency in-house will be the winners.”
~ Caroline Van Allen, Senior Research Specialist, Gartner Legal & Compliance.
5 Legal Technology Trends Changing In-House Legal Departments
The legal sector is known to be conservative and risk-averse about technology. However, the innovation in legal services has led to the latest increasing adoption of technologies by in-house counsel across law firms.
Disruptive innovations like artificial intelligence and blockchain have opened our eyes to explore the endless possibilities of technology in the law sector. And yes, we’re just scratching the surface!
At SpotDraft, we're always at the forefront of innovation, helping in-house counsel and their clients discover ways they can utilize technology as a pathway to greater productivity. Alongside our industry-leading CLM, we also have AI-powered solutions VerifAI and SpotDraft AI, all designed to help you generate far better results with minimal manual inputs across legal services.
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