Learn all about the current state of the legal tech market in our latest episode of Contract Heroes featuring Legaltech Hub CEO Nikki Shaver. Frustrated by Google’s inability to locate legal tech solutions that would actually address internal use cases, Nikki and her husband launched Legaltech Hub in October 2020. The platform provides analysis about legal tech systems on the market so law departments can find solutions that fit their needs.
Nikki drew from both her decade of experience as a lawyer and her knowledge as the CEO of a major player in the legal tech landscape to share tons of useful insights into the current market trends. Read on to find out more about our conversation.
Notable Shifts in Legal Technology
Legal technology is a rapidly evolving industry, from new features like AI to expanding use cases that quickly spread across various departments in an organization. To get a peek into the shifts constantly taking place in the industry, we decided to ask Nikki to describe the most notable changes she has noticed in the past few years and how those changes have impacted legal teams.
The first shift Nikki mentioned is a movement from very large systems to more modular solutions. Large systems are usually designed to handle every piece of the contract lifecycle and require implementation across all phases and departments. Modular solutions, on the other hand, are much more nimble. They can work well for teams who want to initially address only one aspect of the contract lifecycle or deploy the solution to a smaller group first before gradually expanding outward.
Both types of solutions have their place, but it’s nice to see that increase in variability to accommodate organizations with different needs. After all, a platform has to be nimble enough to fit the industry in which it will be operating. No CLM system can be one-size-fits-all.
In a similar vein, Nikki also identified more variability among AI-driven solutions. There are more and more systems entering the market that perform niche tasks or focus on specifics. Nikki gave the examples of harvesting data from historical contracts or diving deep into the analytics around an organization’s contracts. In these ways, AI tools can be used to enhance certain moments in the contract lifecycle.
Pinpointing AI Use Cases
As we drifted toward the topic of AI, we next asked Nikki to tell us about how the use cases for AI in legal technology are evolving and what sorts of advancements she has seen in AI’s capabilities. Nikki pointed out that, since the advent of ChatGPT, the contracting space has witnessed an enormous amount of activity. At Legaltech Hub, they track the market to discover which vendors have begun implementing AI technology as part of their background tech stack, and they found that the contract companies have been some of the first movers.
“AI used to be clunky in legal,” she said. Previously, the technology didn’t have the best track record when dealing with variability in language and meaning. But now, many of the use cases stem from the ability of AI tools to process and understand language.
In pre-execution and negotiation phases, AI can assist with redlining against a playbook by highlighting differences in an incoming contract and suggesting similar clauses from past contracts. It can also generate language upon request. When it comes to post-execution and ongoing contract management, teams can use AI tools to extract clauses from a database and quickly locate all the data pertaining to a particular issue.
Nikki pointed to one use case in particular that may be useful for in-house legal teams: AI legal assistants. A number of companies have included chat-based AI assistants as a part of their software while others like ContractPodAI have also released standalone AI chat interfaces that provide general assistance around contracts outside of the normal CLM solution.
Over the next 6 months, Nikki expects that AI will be built into most of the products on the market as it is fairly easy to implement, especially as a standalone. However, it’s important to remember that, while AI can be extremely useful, it is not necessarily helpful at all stages of the contract lifecycle. Developers must take the time to discover what their users actually need and implement AI when it benefits the users most. It’s no longer enough to simply include the technology, vendors will have to make it clear how the tool is actually useful. Nikki stated that this is where she believes we will start to see more variation between products.
Nikki’s Tips and Technology Trends
Nikki also spoke to another trend in legal technology: CLM companies that have previously targeted contracting exclusively have begun building out to other areas of legal ops and offering more enterprise legal management. This could be a game-changer for law departments who are struggling to manage intake requests and other kinds of work besides contracts that funnel into the legal team. It would be nice if, in the future, legal teams could rely on one provider to satisfy multiple different use cases with a variety of tools.
Nikki’s tip for those currently looking at solutions that have already imported AI-based chat assistants is to be somewhat wary of concerns like security, privacy, and confidentiality. Make sure to ask questions about your data. If you are uncertain about what types of questions to ask, you can check out Legaltech Hub for more information.
Speaking of Legaltech Hub, they frequently organize events that bring together different verticals in the legal ecosystem to chat about relevant issues and concerns for legal teams. They recently hosted an event in September and currently have plans for another in November 2023. Check out their LinkedIn to stay up to date on upcoming events.