You’ve no doubt heard of ChatGPT, the amazing chatbot that can produce remarkably high quality text on any number of topics. When it first hit the scene, social media was filled with fun but non-essential uses for it, like writing bedtime stories featuring your kids, hammering out last minute wedding speeches or helping cheat on college essays.
But it wasn’t long before ChatGPT had passed the SAT, GRE and LSAT — scoring in the 90th percentile on the bar exam. Lawyers started to take note, some cautiously experimented, while others took a more foolhardy approach preparing a court filing with it to catastrophic results. Regardless, it quickly became clear that this technology’s enormous store of knowledge, seeming ability to reason and its textual interface make it ideally suited to the legal domain.
In the coming months and years, generative AI is going to transform legal work at companies. In-house lawyers, legal operations, contract managers and paralegals will all be affected, but so will every team that interacts with legal, from sales and procurement to finance and IT. Legal is a big field so I’ll focus primarily on the day-to-day legal tasks that affect most companies.
How Generative AI Will Impact Legal Teams
AI is not new to in-house legal teams. Several companies, mine included, have been building AI tools for the legal domain for years, saving people thousands of hours of manual work, extracting key dates, parties and terms from tens of thousands of agreements automatically. Generative AI promises to open up a whole new set of amazing capabilities.
One of the most remarkable abilities of generative AI-powered tools is their ability to automatically review and redline a contract according to a company’s existing playbook, with a high degree of accuracy. For instance, if a company requires that all vendors must be paid 90 days after an invoice, they aren’t allowed to use the company’s logo in marketing and they must agree to the state of Delaware to settle disputes, the AI can immediately read the vendor’s contract and flag language that violates these rules and propose edits without human intervention. It can then provide a fully redlined Word document to send to the counterparty and draft an email summarizing the main points of contention.
If this seems too good to be true, there is a catch: No matter how well generative AI performs these surprisingly challenging tasks, it doesn’t always get it right. This is why the features should be used as an assistant to an attorney who can review and correct any mistakes. Even though the AI summaries provide a great first draft, only your lawyer understands the business and relationship context required to edit unnecessary details and focus on the points that will close the deal.
Still, AI assistants are already showing time-savings of 30-to-80 percent when reviewing contracts. In addition to automatic redlining, these assistants can help draft new clauses by providing suggested legal text, modifying existing contract language based on simple directions and learning proper clause language from your existing corpus of contracts.
When you consider how many contracts are reviewed and signed across all companies annually, it’s easy to see how much of a difference just this one feature can make.
How Generative AI-Powered Legal Tools Impact the Company
Generative AI won’t just benefit legal teams, but also all other teams that work closely with legal, such as finance, IT, and HR, and who rely on them to get critical business deals done (such as sales and procurement).
With generative AI, legal teams can create automations that can understand an email or a Microsoft Teams message requesting legal forms like a non-disclosure agreement, a customer order, offer letter, vendor agreement, generate the appropriate document, route it to the right person for review, seek approval, obtain signatures and file it away once signed. It has the ability to coordinate this whole flow efficiently, without waiting for someone to route it manually.
This has the potential to make it easier for other teams to get immediate help on simple questions with low legal risk.
For instance, before meeting a major customer, you need to understand what they’ve been buying from you, the pricing, payment schedules, penalties on missing delivery dates and any other aspects of the deal. Instead of emailing the legal team and waiting for context, generative AI can immediately show you the relevant contracts, summarize their key details and act as a live chatbot to help you understand any nuances. With the right integrations, these insights and automations can be available in the systems your teams already use, such as CRMs used by sales teams, procure-to-pay platforms used by procurement organizations, or HRIS systems used by HR teams.
The same assistants that can review contracts within Word, can also be trained to help automatically fill out request for proposals (RFPs), data protection agreements (DPAs), and security questionnaires based on your company’s prior answers. Given that these are often negotiated, reviewed and signed together with contracts, GenAI assistants can speed up the process for legal teams as well as the IT and finance teams that are often part of the deal-making process.
AI is imperfect, however, and can sometimes provide incorrect information. This is why tools that appropriately scope answers to minimize and flag legal risk are critical. But given how these tools allow business users to self-serve, tasks that previously required legal teams to interrupt their work may now be completed more efficiently and faster.
How to Take Advantage of Generative AI-Powered Legal Tools
While generative AI has the potential to automate many different legal tasks, it’s no time to panic. Instead, lawyers should celebrate. GenAI means no more gophering to find contracts for teammates, or answering basic questions about marketing logos. And no more reviewing the same basic aspects of a contract.
Instead, it will provide legal team members with more time to coach the business on legal issues and negotiate the finer points of the deal. Like all technological waves, you can either ride on top of it, shedding the rote parts of your job to focus on higher value, or get swept under by not adapting.
Find the time to get educated on available tools by speaking with peers at events and watching free vendor webinars. Tap into legal and legal operations communities to learn what’s coming, and what early adopters are saying. Recognize this as an incredible growth opportunity. It’s not the AI that will win vs. the human, but the human-AI partnership that will win overall.
For business leaders, this is the time to recognize that up-leveling your teams, and giving them access to these tools will build lasting competitive advantages and allow you to scale efficiently as you grow. Give your teams the time to learn, and the autonomy to invest in proof-of-concepts that focus on one or two critical pain points to test the waters, instead of boiling the ocean or decision-by-committee projects that take too long to come to fruition.
