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Saturday, June 15, 2024

A Closer Look At How The Legal Industry Uses AI

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Artificial Intelligence is the next big thing in the legal industry. It’s already being used to determine how trustworthy an individual is, what level of risk they pose, and how likely it is that they will be involved in another crime – something that could end up creating a new class structure. And this is just the beginning. As AI continues to evolve, it will be used for more and more complex problems, including predicting the outcome of specific legal cases. Here are some highlights of how Artificial Intelligence is being used in the legal industry right now.

AI is being used to help law firms cut down on inefficiencies and unnecessary work. The study of past data allows AI to suggest more cost-effective methods going forward. For example, legal data analytics can determine how much time legal staff spends on email and other tasks, allowing them to optimize workflows and cut down on legal costs. Law firms are also starting to invest in legal ops software, which uses AI to streamline legal processes. This includes legal contract management, legal project management, legal document review, and legal analytics. Law firms are even beginning to use legal bots that can determine relevant legal history, contract terms, and legal documents for a given legal project.

Due Diligence Reviews

The Big Four accountancy firms are testing robotic process automation systems that can carry out legal due diligence reviews, which typically involve lawyers trawling through large volumes of documents. According to Deloitte, its robotic process automation system can “search, review and analyze documents at the same speed as 18-20 experienced lawyers”. The efficiency of this technology means that a law firm can expand its panel of suppliers without needing to buy extra resources. It is also likely to be cheaper for all involved.

It has been estimated that an experienced lawyer using desktop software can carry out due diligence review of around 1,000 documents per day. This equates to 8.3 hours, but no doubt would involve breaks and other distractions, etc. The same work can be performed by the robot in just over 12 minutes, so the law firm can get its work done in a quarter of the time, for a slightly more palatable price tag. The savings from this kind of due diligence could be passed on to clients or reinvested into other areas of legal technology.

Contracts Preparation

Many of the legal industry’s activity is involved with contract planning. Legal professionals must draft, review and negotiate contracts on behalf of their clients; this can be a time-consuming process. Given this situation, it might not come as a surprise to learn that one of the main areas in which AI has been applied by law firms is contract planning and review. Though admittedly this isn’t a new application of AI, it has still proved to be a fruitful one. One such application is the AI Contract Drafting Assistant. This AI tool was developed by Rita Atenas and her colleagues at the University of Miami School of Law, with the goal of speeding up contract review. The idea is that an attorney can set up a computerized assistant with information regarding the specifics of a client and their legal needs and request research on particular topics, such as those involving copyright law. Given the right information, the assistant can then draft a contract for that client which covers all pertinent legal issues.

Contract Management

It is really hard. Legal contracts are complicated, and generally there are a lot of them. You have to make sure everything is in order, makes sense, has the right execution dates, etc. Lawyers spend tons of time on this with very little to show for it. Well, now AI can help. They can analyze contracts by subject matter expertise (SME), machine learning, and natural language processing (NLP). This is a big win for companies and attorneys because it makes contract management easier and more efficient. It also leads to fewer mistakes, which could lead to fewer legal battles, less money spent on litigation, and so on.

The legal industry is not known for being the most cutting edge. This might be about to change as law firms and other players in the legal market begin to embrace AI technology to streamline processes, improve efficiency and reduce costs. At present, we can’t say that AI has changed the world of law; but we do know that it has a very positive outlook for lawyers and clients alike, at least when it comes to lots of aspects.

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