Over the course of the past year, Generative AI (GenAI) has quickly evolved from a legal tech buzzword to a transformative force in the legal profession. These trends of rapid development will continue to surge forth throughout 2024, with use cases expanding beyond the automation of simple tasks to encompass fully developed business and contracting strategies.
Join us as we explore the current use cases for AI among legal professionals as well as the potential developments we could see in 2024, including the possibility of federal AI regulations.
Current AI Use Cases for Legal Teams
A recent survey conducted by Agiloft revealed that 1 in 5 legal and procurement professionals engage with AI on a regular basis. The most common use cases listed by survey respondents were:
- Searching contracts.
- Summarizing changes made from one contract version to the next.
- Summarizing key provisions to speed up approvals.
- Importing data from legacy contracts.
Though these may seem like simple functions, they can be massive time-savers for overworked legal professionals who already don’t have enough time in the day to accomplish all their tasks. Automating these functions speeds up the contract lifecycle, allowing organizations to complete deals at a faster pace without running into unnecessary risks or decreasing the quality of the contracts they produce.
At the moment, many of the most useful contexts for GenAI center around data. GenAI’s ability to collect, summarize, and analyze large amounts of data is essential to organizations that base their growth goals and business strategies on data. By harnessing the power of AI, businesses can become truly adaptive, dynamically shifting to focus attention on gaps highlighted in the conclusions and insights pulled from AI tools.
Legal teams can take advantage of data-driven CLM tools to make a number of improvements to the way they do contracts. Structured contract data helps teams identify pieces of the contract lifecycle that need to be changed. And, after necessary changes have been implemented, contract professionals can continue to use data to improve upon contract processes even more and measure success in a very tangible way with KPIs.
Data drawn from CLM tools also provides legal professionals with a way to demonstrate their value to the business as a whole using concrete evidence. More and more executives have started to demand proof of value from legal teams. By structuring contract data, lawyers can essentially build their very own business cases backed up by actual numbers. They can showcase how they save the organization money, increase revenue cycles, contribute to better business relationships, and more.
Potential AI Developments for Legal Teams
Many industries spent the majority of 2023 getting familiar with GenAI. There’s no doubt that the technology has been surrounded by a massive amount of hype and discussion, but organizations have remained largely unsure of how to take full advantage of its abilities. In fact, many people still either underestimate or overestimate what AI can achieve, and some tech companies have a tendency to oversell the abilities of AI-powered tools.
In 2024, discussions about GenAI will continue to evolve. As AI slowly becomes a more integral part of our personal and professional lives, more people will gain an understanding of its actual abilities and be able to expand its use cases. Attempts to develop dedicated strategies that harness the power of AI will naturally come to replace the hype-based initiatives of 2023.
Of course, last year’s hype was also counteracted by its fair share of skepticism. The legal industry in particular met GenAI with caution. Legal professionals expressed some degree of fear that the technology could eventually replace them and their expertise, but another large portion of their wariness derived from doubts about the accuracy of the information supplied by AI. Mitigating risk is a major concern for legal teams, after all, so it makes sense that they would want proof of GenAI’s ability to produce accurate data.
Luckily, the mood seems to have shifted in the latter half of 2023. As more and more legal professionals work hands-on with AI, their perspectives have changed from wariness to excitement. Rather than viewing AI as a potential job-stealer, they have come to see it as a human-enabler. AI is not yet capable of replacing human decision-making, especially in an industry as heavily dominated by risk concerns as the legal industry. Instead, it has emerged as a way to augment the skills of legal practitioners, taking over and automating tedious tasks so they can focus their energy on the high-value work that really gives back to the organization.
Agiloft’s survey found that legal professionals hope to use AI for the following tasks in the near future:
- Auto-drafting contracts.
- Importing data from legacy contracts.
- Summarizing changes from one contract version to the next.
The Possibility of AI Regulations in 2024
The lack of clear federal regulations for AI in the United States stands as a potential hurdle for GenAI adoption in 2024. Paying close attention to government regulations is part of the job for legal professionals, and, as it stands now, there is little to no guidance from the federal government when it comes to the use of AI in the private sector.
President Biden issued an Executive Order in October 2023 that laid out basic guidelines for the use of AI in government spaces and the protection of privacy. The Executive Order did not, however, set up any regulations for AI usage among private businesses. This order may be an indication of more regulations to come in 2024, but it remains to be seen whether or not Congress will move to pass federal AI laws this year.
The European Union (EU) has taken a more proactive approach to regulating AI. Lawmakers in the EU reached an agreement on the AI Act in December 2023. Though the act has not yet been put into action, it contains regulations for any organizations using or providing AI systems within the EU. These regulations will also apply to multinational organizations with employees who reside in the EU. Under the EU AI Act, AI systems that pose a “high risk to the rights and safety of individuals” must comply with certain requirements, such as data governance, human oversight, and transparency of information.
Legal teams operating in the United States will most likely be required to navigate a complex entanglement of EU regulations as well as local and state laws in 2024 unless federal regulations are put in place by Congress.
AI has rapidly evolved to become an indispensable companion for legal professionals. From contract searches to data transfer, AI tools have already made their way into daily use when it comes to automating low-value tasks in the contracting process. Throughout 2024, those use cases will continue to expand, with a particular emphasis on the importance of data and how it can be used to augment decision-making and develop better business strategies.