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The rapid progress of artificial intelligence has enabled relevant changes and innovations in LegalTech, the applied technology supporting the legal sector. Let’s take a look together at the main fields of application, the latest trends in the market, and new products launched during the Legal Geek conference 2023.
The evolution of technology is transforming many sectors, and the legal field is one of the most impacted. Generative artificial intelligence (GenAI) is emerging as a crucial tool, offering new possibilities but also presenting ethical and practical challenges. Let’s then explore the different applications of GenAI in the LegalTech sector in Italy.
An Overview of Generative AI
Generative Artificial Intelligence (GenAI) represents an advanced subclass of artificial intelligence, distinguished by its ability to generate new data from existing data sets. This goes beyond simple analysis or classification of information. GenAI can create content such as text, images, and even source code, opening new frontiers in automation and personalization.
In the legal sector, GenAI offers unprecedented potential. It can be programmed to perform tasks ranging from simple document categorization to generating legal text for contracts or deeds. However, its real strength lies in its ability to adapt and learn from the data with which it interacts, continuously improving the accuracy and effectiveness of its operations and the usability of its outputs. In a report published in March 2023, Goldman Sachs estimated that Generative Artificial Intelligence could automate 44 percent of the tasks performed by lawyers in the United States. A crucial factor in GenAI’s rapid progress is the presence of accessible interfaces that understand and respond with natural language. This “trigger feature” has made AI not only more effective, but also more accessible and viable for a multitude of users in a relatively short time.
Issues of transparency, accountability, and ethics are at the center of current debate and require specific attention.
Application fields of Generative AI in LegalTech
The versatility of GenAI is demonstrated by the constant emergence of new fields of application. According to research conducted by ILTA, the International LegalTech Association, which gathered information from 532 law firms representing more than 155,000 lawyers and about 311,000 total users, it is evident that certain GenAI use cases are now common and recurring for more than half of the respondents.
Legal Process Automation (LPO)
Automation is the main area in which GenAI is emerging as a driving force. In a legal environment often burdened by manual procedures and documentation, automation can be a revolutionary change. GenAI can be used to automate repetitive tasks such as filling out forms, organizing documents, or managing legal deadlines.
The effect is a significant reduction in the time and effort required to perform these tasks, allowing legal professionals to focus on more analytical and strategic tasks. GenAI can also integrate with other management systems to create smoother and more efficient workflows.
However, the push toward automation also presents challenges, including resistance to change by some professionals and the need to adapt existing skills. But with careful planning and implementation, the potential benefits in terms of efficiency and accuracy can be significant.
In this sense, ensuring the reliability of AI systems is crucial: it is essential to provide a necessary phase of human oversight to ensure that the algorithm’s interpretations are in line with laws, actual facts, and current regulations.
Advanced legal research
One of the areas where GenAI is showing remarkable potential is in legal research. In a field where accuracy and completeness of information are vital, Generative Artificial Intelligence can accelerate and improve the quality of research. GenAI-based tools can quickly analyze vast archives of laws, precedents, articles and other legal documents, identifying relevant material with an accuracy that surpasses traditional methods.
In addition to providing more accurate results, GenAI can also identify connections and patterns that might elude a manual search, thanks to its ability to analyze large-scale data. This can lead to discoveries and insights that not only better inform legal strategy, but can also contribute to the formulation of new theories and approaches in law.
Despite these advantages, it is critical to address ethical and compliance issues, such as privacy and data accuracy. Using GenAI in this context requires a balance between technological efficiency and ethical and legal responsibility. Automation without due diligence can lead to serious and potentially costly errors, such as in the famous Mata VS case Avianca in which a lawyer included references to case law precedents in his defense brief that turned out to be nonexistent upon verification by the judge, only to reveal that he had used ChatGPT to conduct case law research without knowing that such a GenAI service produces realistic texts but not necessarily from real data.
Decision support and prediction
GenAI is instrumental in providing advanced decision support through predictive models. These models analyze a large array of variables, including prior legal decisions and case-specific details, to provide predictions about the outcome of legal proceedings. This allows lawyers to refine their strategies and offer more informed advice to clients.
But the reliability of such models depends on the quality of the data and the skill with which they are trained. Human oversight is therefore necessary to ensure that predictions are both accurate and ethical (e.g., AI-generated suggestions for action plans may point out shortcomings such as information asymmetry or weaknesses that the lawyer should refrain from exploiting to his or her advantage).
Compliance and regulatory monitoring
In an era when laws and regulations are constantly changing, GenAI can play a crucial role in compliance monitoring. GenAI-based tools can continuously analyze a wide range of information sources, from passed laws to press releases from regulatory authorities, to provide real-time updates on changes that could affect an organization or legal case.
Not only that, AI can also help assess an entity’s existing level of compliance by flagging areas that require immediate attention. This enables a proactive approach to compliance, reducing the risk of penalties or other types of legal consequences.
However, the use of AI in this area must be carefully managed. The complexity of the laws and the importance of accurate interpretations require thoughtful implementation and, often, human oversight to avoid errors or omissions.
Client-lawyer interaction
Generative Artificial Intelligence is also transforming client-lawyer interaction. Advanced GenAI-based chatbots can handle preliminary interactions, resolving common concerns and pointing clients in the right direction before direct intervention by an attorney. This not only makes the service more efficient but also improves the client experience.
Despite the benefits, there is a risk that automation can lead to inaccurate or misleading advice. That is why a balance between automation and human intervention is critical to ensure that the client receives accurate and personalized service.
New market trends: what to expect in 2024
GenAI was definitely the main focus of the LegalGeek 2023 conference held in London the first week of October. As every year, there were presentations of several new LegalTech products and services and speeches on strategies adopted by Law Firm and in-house legal departments. The common factor that emerged from the conference was the focus of both firms and corporations on tools that incorporate AI to gain competitive advantage, to the point that most of the products presented included at least one feature focused on using AI.
During the two-day event, one of the highlights was a panel titled “Cutting through the Gen AI noise.” Here, Hugo Cassidy of Pinsent Masons emphasized how customers want to know in detail about the company’s approach to GenAI, including risks and strategies, so much so that it becomes a possible distraction from other projects. In summary, the conference highlighted the need for law firms to have a well-defined and communicated strategy for GenAI, which is becoming increasingly central to the industry.
Given the rapid evolution taking place in the LegalTech sector, it is critical to watch the outlook for the coming year. Giulia Paparella, Head of Customer Success at BRYTER, noted, “Large organizations that now find themselves with a large tech stack have realized that the adoption and implementation of these solutions requires a coherent strategy and adequate resources. It appears that 2024 is the year of reevaluation of available solutions, with the goal of identifying those that can meet a broader spectrum of needs and justify the investments made.” In this context, the importance of GenAI is not surprising, given its promises of efficiency and ability to make up for resource shortfalls in the short term.
However, technology is not the only answer to all the issues facing the legal industry, a point emphasized by Marco Mendola, Community & Customer Success Lead at Majoto: “The real legal tech revolution starts with people. Before we follow new trends and react impulsively to buying new solutions, it’s good to take a step back and start with some simple questions: what problem are we trying to solve? What is not working? Do we necessarily need tech to begin with? Personal and professional relationships come before tech.”
These observations place emphasis on a balanced approach between technology and human needs, outlining a pragmatic path for the adoption of GenAI and other legal tech. It remains clear that while GenAI has a crucial role to play, a well-thought-out strategy and focus on human relationships remain equally critical.
I personally believe that the benefits that AI will bring to our day-to-day work are manifold, and just as we are required to keep abreast of regulatory and case law news on a daily basis, so it is essential to keep abreast of technological innovations that may impact our industry (and are already doing so). By mastering the use of such technologies and understanding their risks and limitations, it is possible to do more in less time, while still ensuring compliance with the ethical and deontological canons of our profession.
Need for an ethical and regulatory framework
Given the rapid evolution of GenAI in the legal sector, it becomes imperative to discuss the need for an appropriate ethical and regulatory framework. This framework can serve as a starting point to guide the creation of standards and to ensure ethical and responsible use of technology. In this direction, several technology companies have already adopted specific codes of conduct for the use of AI. Moreover, the draft European AI Regulation encourages and stimulates the voluntary adoption of such codes, providing an additional incentive for the standardization of practices.
In this context, it is appropriate that law firms and professional organizations should also seriously consider having AI-specific codes of conduct. This will not only enhance client confidence but also provide a framework for mitigating the risks associated with the use of advanced technologies such as GenAI.
On the same topic, you can read HERE about DLA Piper’s legal tech tool, PRISCA AI Compliance to support businesses in assessing the compliance of artificial intelligence systems in a convenient and easy to use turn-key solution. Also, in the picture of this post, you can see the DLA Piper’s team that attended the conference, we are growing and we are doing it quickly!
