Guest post: In-house legal teams and the promise of generative AI

Bernadette Bulacan, chief evangelist for contract lifecycle management vendor Icertis, tell us what she sees as the opportunities, challenges and priorities for in-house legal teams when they are considering how and where to use generative AI. She says that as generative AI takes over mundane tasks, in-house counsel will be able to direct their efforts to more complex work that might otherwise be outsourced. 


How do you think generative AI will impact the relationship between in-house legal teams and external counsel, in terms of the types of work they engage in?

The adoption of generative AI will have a transformative effect on the relationship between in-house legal and outside counsel when it comes to the distribution of work and cost management. According to the Law Department Operations Survey, total outside counsel spend ranked in the top three key performance indicators that legal departments are tracking. Over a quarter of legal teams in Europe plan to cut spending this year, and many are seeking to control those costs by reducing expensive outside counsel fees and managing more work in-house.


In-house legal teams increasingly recognize the significant productivity gains AI and generative AI technology can bring to their daily business operations. For example, as generative AI takes over mundane and routine legal tasks, and democratizes contracting across an enterprise, in-house counsel can redirect their efforts to more strategic and complex work that might have traditionally been outsourced to external legal counsel. Accordingly, the adoption of these technologies by in-house teams may increase competition among law firms as they compete for a more limited pool of work.

What are some promising opportunities for corporate legal teams in adopting generative AI?

The opportunities stemming from generative AI in a legal department are vast, but I look at contract management as the opportunity most ripe for transformation and value. Generative AI and contracting go hand-in-hand, where large language models have expressed human language-like fluency and can seemingly perform the skills that were once exclusive to the profession, like summarization and language generation.

Contracting remains one of the most manual and unreformed processes for an enterprise, from the pre-execution tasks undertaken by legal teams to post-execution management undertaken by the business. Additionally, it’s one of the few processes that can generate benefits across multiple axis and across the enterprise: from, reduced workloads, improved compliance, cost savings, revenue generation, scalability, and more. If legal teams can adopt generative AI in their contracting processes, it is poised to transform not only the legal department, but the entire enterprise.

What ‘quick wins’ can legal teams leverage when implementing generative AI?

Quick wins made possible by generative AI include enhanced efficiencies that help legal teams operate smarter, not harder. For example, with generative AI applications, the automation of routine workflows, summarization of complex agreements, and automated risk assessment of portfolios and volume contracts enable legal teams to maximize their value by allocating their resources to strategic initiatives that directly impact the bottom line. Additionally, contracting processes become democratized with the power of generative AI, enabling non-legal end-users across the enterprise to easily interact confidently with contracts while maintaining legal and compliance guardrails for a seamless experience.

What key considerations should legal teams be particularly cautious about when embracing generative AI?

Legal teams should recognize and understand the potential for biases in large language models (LLM) when implementing generative AI into business processes. While the vast scale of these models is impressive, biases built into LLMs can affect the output and lack context. For instance, data pools focused on contracts for aerospace companies may exhibit biases compared to those trained on retail contracts. Understanding the potential biases and limitation of a specific LLM will be important across industries as enterprises harness the power of generative AI.

Additionally, data privacy and security are paramount. For example, contracts store highly sensitive business information that needs to be safeguarded. Legal teams embracing generative AI should leverage secure platforms like Microsoft Azure OpenAI when utilizing large language models in contract management.

For resource-constrained teams, what strategies do you recommend for learning and implementing generative AI technology effectively?

Embarking on the journey to implement generative AI can seem daunting for resource-constrained teams; however, a few strategies can address this challenge and empower teams to successfully deploy generative AI technology effectively, despite limited resources. For example, legal teams can host Innovation Days across the enterprise to help address technical questions and encourage users to experiment with the new solution. Additionally, partnering with a trusted technology implementation partner can lead to a more efficient, cost-effective, and successful adoption of new technologies. More importantly, embrace a “start smart” approach with a series of incremental phases that can deliver fast wins, while building credibility and confidence among stakeholders.

What should legal teams prioritise in this new era of generative AI?

As AI permeates diverse sectors, generative AI’s implementation will be critical for unlocking savings and managing risk. A recent AI study commissioned by Icertis revealed that 56 percent of senior executives are prioritising AI use cases that have an immediate impact on revenue or costs based on responses from 500 c-suite leaders. These leaders also believe the greatest opportunity for savings exists among IT, Finance, and Marketing departments. Prioritising generative AI in areas like contract management can have a direct impact on the bottom line for legal teams – contracts are the foundation of commerce, governing every dollar in and out of the enterprise. By adopting generative AI in contract management, legal teams can also mitigate risk and automate compliance measures, which ultimately helps safeguard the company’s financial performance in today’s dynamic business landscape. Overall, this new era of generative AI – and traditional AI – will require legal teams to prioritise upskilling new talent and current employees on these technologies while also understanding that humans remain imperative in the delivery of legal services.

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