How is AI changing legal tech?

In the latest Fidra Analytics insight, we explore the companies who are using AI to push legal tech towards a more efficient future.

The Financial Times recently released an article that discussed how moves toward increased digitisation and AI hope to revolutionise the process of procuring legal advice and services. We are excited to see AI and tech improvements happening across all sectors, but especially one so unfortunately bound by unstandardised data. The Fidra Analytics research team wrote this quick insight to collate all of the information, and bring you up to speed on both the developments and future plans for the industry.

AI-Powered Legal Chatbots

As with all sectors in 2024, the legal industry is preparing for a future of massive technological overhauls. Generative AI in particular offers the most promising capabilities, with many systems already underway. 2023 saw platforms like ContractPodAi’s ‘Leah’ come to market; a GenAI system for legal document reviewing and redrafting. Users can also pose Leah questions about uploaded contracts and agreements. Another AI-powered legal platform is ‘Harvey’, which is getting good at legal research, amongst other key features. Developers are currently working on increasing the citation accuracy, as boosting confidence in system output is crucial to the success of any AI, but especially one in the legal sector.   

Improved Lawyer Recruitment

During 2024, ‘Persuit’ have been working to improve the process of purchasing legal services through increased digitisation and data availability. Previously, if in-house legal teams required outside counsel, lawyers would largely rely on personal connections and people they knew already, as there was no real way to scope out someone best suited for a job based on credentials or experience. Now, lawyers can use Persuit to publish an outline of the task, then evaluate the competing proposals firms submit. AI incorporation automatically summarises and picks out the best features of the proposals, making it quick and easy to recruit the best counsel. Overall, the platform offers a standardised and innovative way to locate lawyers with specialist expertise in niche areas.

Cutting Costs

Developments are also happening in the world of contract management. This is a huge area of the legal sector that is seeing equally huge AI investment and a flurry of mergers between legal tech suppliers and smaller AI contract management start-ups. Intensive legal tasks can be automated, and demand is growing for these technologies as stretched teams look for ways to manage their workload. Redlining, for example, is the process of reviewing and editing contracts – and companies have started employing AI systems to do it. It is worth noting that Garner reckons redlining software is still rather immature, but with further finetuning it could become widely available to legal firms. UK engineering consultants at Hoare Lea reckon that within five years, contract review teams could cut costs by a third with this kind of AI-powered legal software.

Problems (and Solutions) with Legal Tech

Of course, it isn’t all plain sailing. The legal sector battles often with data constraints; as firms tend to each have different taxonomies, data management systems, and case categorisations. There is a sizeable lack of standardised, consistent data across the industry; and Generative AI requires standardised, consistent data.

Thus, expectedly, issues have arisen. As the saying goes: “garbage in, garbage out”. Without widely agreed upon legal definitions, the outputs of these systems will be unreliable and incongruous to each firm who employ them. Sali (Standards Advancement for the Legal Industry) is a company tackling this problem head on. They are trying to create common data languages and categorisations for the whole sector, and should hopefully accelerate the wide uptake of AI automation within legal tech.

Of course, there is a lot we could not cover; but those are the basics of the current technological excitements within the legal industry. If you enjoyed this insight, check out our others posted to www.fidra.ai – we cover AI and tech developments across all sectors and share our thoughts. As always, join the conversation and let us know what you think in the comments.

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