Why in-house legal teams will lead AI adoption
In-house lawyers are no stranger to change. They’re embedded in business. And businesses constantly adapt to survive. So innovation and change is part of the day-to-day.
Here’s why I think in-house lawyers are most likely to capitalise on the opportunity AI offers lawyers:
Instant rewards: In-house legal teams get immediate benefit from efficiency gains. By implementing AI tools, they can reduce costs, respond faster, and handle more legal matters without expanding their team. Law firms would first need to change their business model (to fixed fees) to get the same benefit. Some have done this, most have not.
Easier for companies to try and buy tools: Businesses are used to investing in tech across all departments. It often takes law firms 2-5x longer to buy the same piece of software than an in-house legal teams. In-house legal teams are also able to trial solutions from a wider range of providers, their purchasing criteria are typically a bit more commercial.
Self-selection bias: Many lawyers move in-house to be closer to the business action. This self-selection bias means in-house legal teams are made up of a higher percentages of ‘innovators’ than the average lawyer.
In-house lawyers have a track record of leading the charge: In the 1990s, they were quick to adopt email. In the early 2000s, they pioneered e-billing and matter management systems. In the 2010s they experimented heavily with different ways of doing the same legal work through ALSPs.
Now, with the next waive of legal tooling coming out, I fully expect in-house lawyers will once again set the standard for the legal industry.
Where to start
There’s a huge range of AI tools coming out. So it’s best to take an 80/20 approach. Focus on areas that sit at this intersection:
High-frequency work that consumes a lot of time
Legal work where AI is (already) competent: i.e. AI solutions that are good enough to make a difference. (side note: I believe most AI research tools aren’t quite there yet. Recent research seems to confirm that).
Likely opportunity areas:
Internal ChatBots: Answering common legal questions from the business using AI-powered chatbots. See eg the work LegalOS/(now rebranded to Flank) has been doing. Here’s a case study on how they did this at TravelPerk.
Redlines of routine third party docs: Creating quick but accurate mark-ups of third party paper (e.g. vendor contracts, or sales contracts on your customer’s purchasing terms).
Full disclosure: this is the area where DraftPilot plays (my day job). Speaking of which: if you’re an in-house lawyer and would like to beta test DraftPilot, just hit reply! Check out our DraftPilot Community for a quick video of how the tool works.
Legal tasks where AI is likely less of an obvious fit (for now):
Providing custom legal advice on ‘bet-the-company’ issues
Brainstorming with business leaders on new products
Instructing external counsel
Negotiating high value deals - the business will want you on the call
Providing advice to the board
I’m sure there are AI tools which may claim to help with this work too.
Maybe they do, maybe they don’t. But at the end of the day, they’re likely not the best starting point to start experimenting with AI.
Do your own analysis
But every legal team is different. E.g. if you’re in a B2B company, your work mix will be different than if you’re working at a consumer focussed brand.
So it’s worth doing the exercise of squinting at the legal team to see where most of the time is spent. Then matching those tasks against various AI solutions.
Which is the opposite of what often happens, where you find a shiny tool and then go searching for the problem it may solve!
Regardless of the first thing you try, the important thing is to start. The future of legal services is being written today, and with AI as your ally, you have the power to shape it in ways that benefit your company and your career.
Thanks for being here,
Daniel
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Daniel van Binsbergen
CEO at DraftPilot
Would Luke to beta test