Legal technology is changing how in-house legal teams manage contracts, matters, legal spend, data, regulatory monitoring and routine processes.
This article explores eight areas where technology can improve efficiency, visibility and service delivery, including automation, matter management, cybersecurity, smart contracts, generative AI and legal chatbots. It also considers the growing role of legal operations and the need for appropriate governance, human oversight and strategic planning when adopting new technology.
Key takeaways
- Legal technology can improve efficiency, visibility, consistency and access to information across the legal function.
- Contract, matter and spend management systems can help legal teams standardise processes and make better use of data.
- AI is increasingly embedded across legal technology, creating opportunities as well as risks around accuracy, confidentiality, security and governance.
- Legal operations specialists can help legal teams select, implement and manage technology effectively.
- Technology adoption should be driven by business and legal needs, with appropriate human oversight and change management.
Legal tech is nothing new, most of us have seen a number of changes over the years brought about by developments in technology, which have impacted the way we work and our working environments.
After all, if you go back far enough, most lawyers were working with a quill and ink!
But in recent years the sheer pace of change has, continued to surprise many of us as new technologies seem ever more powerful and capable.
No sooner do we get used to working in new ways than a game-changing development appears on the horizon, for example including automation and now artificial intelligence.
At the same time a whole industry specialising in legal tech has emerged and evolved with a number of established providers who work within or around its edges, a dedicated conference and even a community of professionals.
In this article we look at some of the ways in which technology has made it possible for in-house lawyers to work differently and more efficiently.
We also consider those newer technologies that are entering the mainstream and whether there may be any downsides to the continuing development.
Where technology helps
In-house legal teams often report that they’re under increased pressure to do more in a shorter timeframe. Of course, this is common across many professions and sectors and has remained a relatively constant factor over a number of years.
Organisations are rarely in steady state; they’re looking to survive and prosper in ever more competitive and regulated environments and changes in the nature and scope of what the organisation does can seem pretty much the norm. And change often results in increased demand for legal services.
We know that many organisations have increased the size and scope of their in-house legal teams as they look to control the cost and responsiveness of legal services. And there’s little doubt also that many in-house teams now play a more pivotal and influential role in organisations than they once did as legal and regulatory issues and risks have increased.
But being more pivotal brings its own challenges. Legal teams are increasingly expected to use standardised systems of delivery and reporting, while continually looking for ways to work more efficiently without sacrificing quality.
And this is where technology can play a big part. When new waves of technology do come along inevitably leadership also eyes its potential to reduce costs, increase effectiveness and boost productivity across every function, and in-house legal teams are certainly not immune to this.
Here are eight areas where technology can (and is) helping legal teams’ work smarter:
1. Contract and document management automation
With most in-house legal teams having a role in the drafting, reviewing and negotiation of contract terms, contract management systems have enabled organisations to automate the management of their contracts’ lifecycle thereby providing increased visibility, certainty and control. So, systems that aid contract creation, negotiation, clarity of obligations, compliance, enforcement, amendment, renewal and termination not only help reduce lawyer time but also strengthen the management of contract risk.
Similarly, even basic automated document management systems are able to facilitate search, storage, version control, generation, reporting and integration with other systems (such as email) as well as functions such as tagging and metadata.
Contract and document automation has continued to evolve, with AI increasingly being incorporated into tools that can assist with drafting, reviewing, extracting and analysing contractual information. These capabilities can improve efficiency, but legal teams still need appropriate oversight and controls.
2. Matter Management
Matter management systems have become increasingly mature and can provide a central way for legal teams to manage workflow, standardise tasks and understand demand for legal services across the organisation.
Depending on how comprehensive the system is, it will cover features such as document management, workflow and triage, scheduling and calendaring, collaboration, invoicing, dashboard reporting, project management, integrations and more.
3. E-billing and Spend Analysis
Given the need for GCs to control and justify legal spend, having automated tools to interrogate and report on spending, errors and trends is pretty much a necessity for any legal team using external providers and/or with internal cross charging arrangements.
Apart from timesaving, these systems can arm the GC and legal managers with more granular information around which they can plan more strategically for budgets, performance, targets, KPIs, and external relationships. Some of these features may be covered in more comprehensive Matter Management systems.
4. Data Security and Governance
This has moved to, or near to, the top of many GCs risk maps and not just in those organisations that process large volumes of personal and sensitive data. Concerns about cyberattacks as well as general data protection compliance, for example, with their potential for real financial and reputational damage, have emphasised the need for robust and resilient systems and processes to not only provide real time protection but also certainty and confidence in the organisation’s ability to protect its data and react quickly to problems when they occur. The introduction of AI is only increasing data and cybersecurity risks, although it is simultaneously enabling more sophisticated approaches to monitoring for threats.
There are a plethora of data security and cybersecurity systems and solutions that your colleagues in IT will already likely have invested in. These are not necessarily designed for in-house legal teams, but certainly support their mission. They range from systems like Microsoft Purview which can support data governance and find potential threats and anomalies, to software which trains employees how to spot phishing emails, calls and similar threats.
5. Smart contracts
For a long time, Blockchain was referred to in the context of crypto currencies such as Bitcoin, but it has an application in smart contracts. The potential for smart contracts lies in the automation of the monitoring, execution, compliance and enforcement of agreements without the need for legal input. The technology recognises when conditions are fulfilled and, for example, automatically transfer assets as agreed and register the transfers.
Smart contracts have opportunities to repeat transactions where standardised terms work well – for example, in residential property transfers, some financial services transactions or across supply chains. The Law Commission concluded in 2021 that the legal framework in England and Wales is capable of facilitating and supporting the use of smart legal contracts. The extent to which these technologies achieve widespread adoption will depend on their practical, commercial and regulatory application.
6. Generative AI
Artificial intelligence can be a bit of a catch-all term that covers a different range of smart technologies and overall, AI is increasingly embedded across many areas of legal tech, including all of the areas already mentioned.
However, it is “Generative AI” that has taken the world by storm with the release of ChatGPT in late 2022 and is now being added to a range of different workplace products such as Microsoft Copilot. Generative AI has the potential to boost productivity and disrupt the work of in-house legal teams in multiple ways – from basics such as taking meeting notes, generating copy, automating core processes around contract management, analysing and comparing huge volumes of data, enabling chatbots (see below), automatically translating and tagging documents, analysing the regulatory environment, and many more.
However, considerable work is required to manage the risks and ensure all the required governance is place. Legal teams also need to consider accuracy, confidentiality, data protection, security, professional obligations and appropriate human oversight. Generative AI is also still evolving at breakneck speed, and the possibilities are exciting and it’s uncertain quite where it will take us.
7. Lawbots
Chatbots can allow clients or employees to ask questions and find relevant information or documents using natural language. They have been used for some time in areas such as customer service and internal IT and HR support, while advances in generative AI are enabling more sophisticated conversational tools and legal applications.
The use of chatbots for legal questions and processes (sometimes called “lawbots”) was mooted for a long time and is now a reality with several products, and large law and consulting firms getting involved. You can read more about lawbots in our knowledge article.
8. Monitoring the regulatory landscape
Technology can support monitoring of changes in legislation, regulation, guidance and other developments relevant to an organisation. AI can increasingly help legal teams identify, summarise and prioritise relevant changes, but outputs still need to be assessed for accuracy, relevance and impact before action is taken.
The rise of legal operations
While GCs and their lawyers clearly require an understanding of how and what technology can help them in their roles and in providing legal services to their organisations. Many GCs and their lawyers will not have the time or specialist expertise to plan and execute significant technology change alongside their day-to-day responsibilities, contributing to the rise of the legal operations specialist
We’ve already seen major organisations appoint Heads of Legal Technology and Legal Operations, as well as roles which cover legal innovation too. Of course, not all legal teams have the scale or budget to appoint legal operations or technology specialists but as technology has evolved and become more accessible, the use of technology, automation and AI is on the agenda for most in-house legal teams.
Where are we headed?
While not every new technology or upgrade will have mainstream use, the introduction of different technologies has already brought about significant changes in the way that in-house lawyers work and in the way they interact with their in-house clients. Of course, not all change or innovation is technology led but the pace of technological change is likely to continue accelerating, particularly as AI becomes more deeply integrated into legal and business processes.
With legal tech increasingly having the potential to automate more processes, analyse and interrogate larger volumes of data and support increasingly sophisticated decision-making, legal tech has become a key part of the architecture of many in-house legal teams.
For smaller teams, access to appropriate technology and expertise, whether provided internally, by law firms or by specialist external providers, is increasingly becoming an important capability rather than simply a ‘nice-to-have’.
The pros and cons
So, what are the advantages and pitfalls of technological change? Used well, technology can, and does, drive better performance and enhance the quality, reliability and accessibility of legal services, while controlling its cost. Its smart use provides GCs and in-house legal teams with a great opportunity to evaluate and evolve the way they work and underpin their value to their clients and organisations.
But integrating technology into the in-house function requires knowledge and strategic planning by GCs and senior in-house lawyers who may also need to make the case for its adoption. And technology can bring change and disruption requiring good people and change management skills. But there’s little doubt that lawyers have become increasingly confident in identifying the benefits and downsides of technology solutions and will continue to need to evolve their knowledge and accompanying mindset.