One of the most trending technologies currently, Artificial Intelligence (AI) has led to a paradigm shift in diverse industries necessitating the reinvention of their modus operandi. Not a single industry, but every other industry in the market is likely to incorporate this innovative technology into their company system. AI has now become a growing and significant part of the legal industry as well. Millions are being spent each year on new client databases, efficient automated processes and technology to help lawyers better analyze, communicate and prepare cases. Incorporating innovative AI solutions and applications help automate the arduous task of data discovery like – managing and reviewing documents or identifying critical clauses. Availing legal document scanning services from a professional provider can provide valuable support in this regard. Using advanced AI technology in legal matters offers several benefits like – reduce costs, save time, ensure complete confidentiality of client data thereby increasing the accuracy and effectiveness of the legal operations.
Significant Benefits of AI in the Legal Industry
Becoming a force multiplier in the area of legal document management, AI has the unique ability to make every step of the workflow better, smarter and faster – right from the step of processing documents to their storage to the extraction of the information they contain. Assisted by Natural Language Processing (NLP), AI technology helps legal practitioners simplify the legalese, get through contracts quickly and detect specific loopholes in legal agreements. Reports from Gartner predict that the spending on legal tech will increase 200 percent by 2025 (from 3.9% of in-house budgets to about 12% of in-house budgets). This means more than 1 out of every 10 dollars in a law firm’s budget will be going to technology in just a few years. In addition, artificial intelligence (AI) software use in the legal industry is expected to grow by over 28 percent by 2026, with many of the mundane and manual tasks that have typically been done by assistants and paralegal staff getting automated with AI technology.
AI helps legal firms to make better decisions and deliver higher quality output, from determining an approach for a major case to deciding the best way to structure an important clause in a contract, and much more.
Here discussed are some of the other major benefits of AI in legal industry –
- Quality Improvement – AI is capable of scanning documents for errors and inaccuracies. The technology can help analyze legal documents and find areas where they are different, helping lawyers fix mistakes thereby enabling them to structure their contracts and arguments as accurately as possible. This in turn helps in error reduction and higher quality work.
- Risk Assessment – Technology-assisted review tools (also known as TAR) help lawyers analyze large amounts of data and better analyze what they can do to minimize risk for their firm and clients. TAR utilizes predictive coding and continuous active learning tools to learn which documents are most important and to mark the right time to act in the face of a potential lawsuit or other critical case.
- Time Savings – AI assists lawyers with more mundane tasks as much as it helps with important decisions regarding clients and cases. It can help lawyers better organize insights so that they are easy to access and utilize. The technology can also quickly scrutinize long recordings to find specific points of interest, which can be a huge timesaver for lawyers and paralegals.
- Make Crucial Legal Decisions – AI helps law firms boost attorney performance, assisting with data and processes that are very strategic, but also time-consuming. The technology can be effectively applied to a law firm’s processes and databases at a custom level, so that the firm can continue to be specialists at what they do. It enables legal teams to use their time more creatively and more productively towards different aspects of the case. When AI uncovers elements from piles of documents that otherwise could have been easily missed or identified, a lawyer has a new level of value they bring to a contract, case or trial.
How Can Lawyers Use AI in Law Firms?
Currently, the legal industry tends to use artificial intelligence in different aspects of legal work. Even though the technology may not be explicitly noticeable, AI in law firms helps lawyers and paralegals to perform their jobs in a better manner. Specifically, AI in law firms helps legal professionals transform their practice by putting clients first in an unprecedented way. Here discussed are some of the different ways in which lawyers can take advantage of AI in their firms –
- E-Discovery – One of the most common forms of in the legal field AIis E-discovery. It is the process of scanning electronic information to obtain non-privileged information relevant to a case or claim. E-discovery software allows lawyers to scan documents using search terms or specific parameters like – date, geographic locations etc. This in turn offers lawyers instant responses – which are significantly faster than scanning hard copies. This extra time allows lawyers to discover more relevant and clear information.
- Document Management and Automation – Digital document storage has its own set of similar challenges like hard copy document storage. Even though electronic records take up less physical space, sorting and finding documents is still challenging. With tagging and profiling functionality, AI-driven document management software stores and organizes legal files, including contracts, case files, notes, emails, etc. This method of storing and organizing digital files, along with full-text search, makes it easy to find documents. Document management solutions also enable document ID and check-in/check-out privileges to maintain version control and security. In addition, document management software can connect to other systems like Microsoft Office to easily share files with others. Automation helps law firms create documents using intelligent templates. Legal professionals can automatically fill form fields directly from case records into the templates, saving time and effort. Legal document automation provides a centralized and efficient process for producing letters, agreements, motions, pleadings, bills, invoices, and other legal documents.
- Legal Research – Similar to e-discovery software, AI-powered legal research software allows legal professionals to quickly scan and search large databases of regulations, statutes, practice areas, jurisdictions, case laws, and more. Typically, legal professionals spend considerable time analyzing a legal case and similar cases that have happened, calculating the exact amount of damages and the judgments that have been pronounced in the past. However, with AI tools, they can quickly find a precedent, have comprehensive analysis and comparison done with an option of a likely judgment that makes their job a lot easier. In short, the primary objective is to reduce the research time of the user and make it more comprehensive.
- Due Diligence – Conducting due diligence often requires legal professionals to review a large number of documents, such as contracts. With AI and ML technology applications, law firms can bring out due-diligence reports near-automatically, resulting in considerable savings in time and money. An AI-based due diligence solution can identify specific documents required for due diligence, like documents containing a specific clause. AI due diligence software can also spot variations or changes in documents and go through documents in seconds.
- Litigation Analysis – Determining the viability of litigation requires extensive analysis of precedent-setting cases. AI can quickly review those precedents and help lawyers draft more accurate and appropriate documents based on that data. Usage of AI in law firms augments the abilities of legal professionals to do their jobs. Overall, AI helps reduce the time spent on manual tasks, freeing up more time to devote to relationship-building and client-focused activities.
- Improve Access to Justice – Artificial intelligence and machine learning tools have the unique ability to reduce barriers to justice, most notably, the high cost of accessing legal help. Lawyers can reduce estimates and costs for clients by saving time on manual and routine legal work. For instance, lawyers can pass those savings on to clients if research that previously took 20 hours to complete may now take just two hours to complete. In addition, lawyers can utilize the valuable time spent on legal research for assisting more clients.
- Legal Contract Management – Legal contract review is a time-consuming task, which takes in-house counsel away from more strategic work. In addition, poor contract management processes make it more difficult for attorneys to identify and proactively respond to risks. The 2021 EY Law Survey gathered these concerning statistics from GCs –
- 69 percent don’t have a standard contract creation process
- 78 percent don’t have a system to stay on top of contract obligations
- 71 percent don’t monitor contracts for ” deviations from standard terms”
AI contract software learns from the previous contracts and pre-entered data sets. This data is used to flag contracts missing key clauses, insert pre-approved clauses, and highlight potential risk factors. This saves legal professionals’ further time by reducing back-and-forth with sales. There is no specific need for sales to ask simple contract questions as AI software automatically applies the relevant contract guidelines entered. This speeds up the contract approval process by around 70 percent.
Despite the legal industry’s long-standing hesitancy to adopt new technology, Artificial Intelligence and Machine learning have become a huge part of businesses, beginning to make its mark on law firms as well. AI in law firms can deliver significant efficiency and cost-saving benefits for a practice, helping automate routine tasks such as legal research and analysis, document management, and billing. Legal businesses can consider associating with a reliable legal process outsourcing company to carry out various business processes more quickly and efficiently.