AI in legal

The advancement of artificial intelligence (AI) impacts every industry. AI has revolutionized businesses across the landscape, shaping each industry in unique ways. Alongside many industries, the legal field is also heavily impacted by the evolution of AI. There is no doubt that AI has changed the legal landscape with the introduction of legal AI tools.

Many businesses have already started to integrate artificial intelligence into their processes to tackle diverse problems effectively. Whether it is customer experience, data analysis, content creation, or cybersecurity, artificial intelligence can be a good answer to many challenges. 

While machine learning and natural language processing are continuously improving as there is a high demand from the market, we also need to keep in mind the limitations of this new technology.

The ultimate question is how artificial intelligence impacts the legal landscape and how you can benefit from these changes. 

Who will be affected? 

I have bad news if you think generative AI will only affect the legal profession and law schools. Generative AI indeed will impact the legal profession and practice of law firms. However, many other players will experience higher influence in the course of AI adaption.

Startups, small businesses, and entrepreneurs

In my view, the early adopters of AI solutions in their processes are likely to be startups, entrepreneurs, and small businesses. You might be wondering why I believe these players will experience a more significant impact from AI technology on their day-to-day operations compared to in-house legal departments or law firms.

Startups, entrepreneurs, and small businesses are the ones who are forced to work within a tight budget in most cases. They will be the first to start considering how to lower cost, and these businesses will be the early adapters

Secondly, they will more likely take the risk and experiment with a specific AI tool, even if there is a chance it is not working out for them. Law firms are generally more cautious with new technology.

Finally, during the initial stages, startup founders and entrepreneurs often find themselves handling all tasks on their own. This situation arises primarily due to the limited financial resources that prevent them from outsourcing various functions, such as legal tasks.

As a result, they seek ways to optimize their time and productivity by using AI legal tools. By doing so, they can focus on their core business activities more effectively.

In-house legal departments

Big and medium size companies in-house legal departments can utilize AI solutions in their daily routine tasks. These companies can reach significant cost savings and not mention the time saving, by integrating AI solutions into their legal workflows due to the size of legal paperwork. 

While in-house legal departments have sufficient financial resources to apply AI solutions, they also have data and safety concerns. It is pretty common that these corporations work with a huge amount of data.

Their legal papers also include sensitive information about the company’s transactions, business models, and tax issues. People still remember Samsung’s case when ChatGPT leaked confidential data about the company.  

Law firms

Even though generative AI will affect lawyers strongly, only smaller law firms will adopt AI into their routine tasks in the early stages. In general, the legal industry is one of the most conservative sectors in terms of technology. Similarly to the big corporations, the big law firms will integrate AI into their daily work once it is totally risk-free and generally accepted in the legal industry.

Nevertheless, legal professionals working as sole proprietor or in a small law firm can be one of the early adopters. Generative AI can have a significant impact on cost and time savings. Providing legal services is time-consuming, and there are many critical tasks during the client journey. 

Lawyers must go through a hundred pages of documents and conduct numerous legal research to find relevant information. On the flip side, many lawyers do not have sufficient funds to hire employees in the early phases. Using generative AI can significantly lower the cost and time of legal research, contract review, and many routine tasks related to legal services.

How can AI tools help in legal tasks?

Contract and legal document review

Reviewing contracts and legal documents is a slow process. The time it takes for a comprehensive review can vary significantly, ranging from just a few hours to as long as a month. Typically, engaging with lawyers for a thorough review should take around a week for the majority of contracts. 

The situation is even worse if companies choose to do all the legal work in-house. According to the Enterprise Legal Reputation (ELR) Report by Onit, 40% of corporate legal professionals spend half of their workday reviewing and handling contracts.

Now, let’s do some math and put this into perspective. Think about the salaries of these legal experts and imagine the potential savings if they could automate at least some parts of that manual review process. 

AI solutions on the market already aim to almost entirely automate the contract and document review process. Such tools use AI technology to review documents based on predefined policies. These generative AI-based solutions use machine learning to review the process and understand the contractual context. Compared to manual approaches, it helps accelerate the document review process. This can be especially essential during due diligence work.

Considering small businesses and startups in the early stages, AI solutions can help to reduce attorneys’ costs and significantly decrease the time spent on legal work. 

Legal research 

Legal research is another time-consuming task where AI solutions can give you a helping hand. Most of the time, in-house lawyers face a dilemma when it comes to research. They may decide to do the legal research on their own if they have the necessary expertise regarding the subject in question to save money. Alternatively, they can opt to hire a lawyer, which means a high cost to the company. 

However, AI can provide an additional solution to this problem. You can ask legal questions in simple language and receive comprehensive answers. AI will dive into researching regulations, caselaw, secondary sources, and more to provide you with all the necessary information.

Legal document management

Poor contract management can cost up to 9% of a company’s total revenue. Moreover, it can become a burdensome weekly task for many businesses.

Based on DocuSign findings, 68% of contract professionals search for completed contracts at least once a week for various reasons: 

  • Anticipating upcoming renewals by searching for contracts (61%)
  • Drafting new contracts based on completed ones (55%)
  • Spotting deviations from terms and conditions (49%)
  • Reviewing contractual obligations (45%)

A solid legal document management system can save time and money for legal, sales, and supply chain teams. AI legal tools can help you manage and automate workflows across the entire contract lifecycle. Using machine learning, AI can provide a report and list of when contracts will expire, organize documents, or extract key clauses. 

Benefits of legal document management
Source: contractsafe

Ultimately, a legal document management tool can help you in many ways: 

  • Streamline repetitive tasks: AI handles numerous repetitive tasks by automating data extraction, routine workflows, and document storage.
  • Negotiation assistance: AI has the ability to extract crucial insights and track previous contracts, utilizing data to identify potential areas for improvement.
  • Increased efficiency: One of AI’s biggest advantages is the power to streamline tasks to save time for you.
  • Easy search: You can save time by finding the relevant information faster compared to manual approaches.

Contract and legal document analysis

Legal teams spend up to 34% of their time reviewing contracts to identify and mitigate risk. As most of the contracts are concluded in a different formula, it can be a time-consuming task. 

However, AI can give you a helping hand in this matter. AI technology uses extensive databases to categorize legal contracts into various sections, including agreement, confidentiality, dispute resolution, IP rights, terms and conditions, and much more. Once your legal document is categorized properly, AI can identify potentially risky terms and help you mitigate legal risks. 

Contract and legal document analysis
For example, Lawgeex’s machine learning platform reviews your documents and can deliver a report on the result.

Efficiency boost in legal work

We should not overlook that AI technology has limitations and not necessarily can be implemented in every industry. But one thing is certain – AI technology can make processes more efficient, irrespectively the specific industry we are discussing

Adopting AI in day-to-day workflows can be a massive boost for your businesses. It is worth it to take one step back and think through the repetitive tasks you are doing daily.

Many generative AI solutions can help in your daily work. It can be a tool helping you to prepare a summary on a document review like Humata AI. Or you can save time on your email drafts using Quillbot, for instance. 

Limitations of AI implementation 


No tool can save you from thinking and adding human input. Numerous things can go wrong by over-relying on AI. As generative AI is still in the early phases, reliability is a massive challenge. The risk can come from the data used to train AI systems or the transparency behind the data structure.

There might be additional law-specific challenges. For example, imagine a business operating in multiple jurisdictions. In such a case, you have to consider the rules of the multiple jurisdictions and the tool’s coverage of countries.

Before deciding to invest in a specific AI tool, I recommend reading independent reviews or using a free trial option. If you are satisfied, I will go for a monthly plan instead of an annual one to have enough time to assess the AI tool’s accuracy and completeness.

Data privacy

Due to technological advancements, more data is being generated daily than ever. And data privacy is one of the biggest focus points of generative AI-based tools.

As generative AI emerged fast in the last year, countries realized that large language models using machine learning could pose significant data protection and privacy challenges. In parallel with this trend, people are becoming increasingly cautious regarding their data. 

Most AI companies that use large language models are aware of the fact that data privacy is key for their operation, and they put a great emphasis on this issue. Nonetheless, the words and actions are two different things. 

To ensure you make a wise decision, I highly recommend thoroughly researching and reading reviews before purchasing. By doing so, you can make informed choices, support companies prioritizing data privacy, and take concrete steps to protect sensitive information.

The cost of implementation

Several key factors can impact the cost of integrating AI:

  • The specific AI technology integrated,
  • The size of the company,
  • Features of the AI tool,
  • The extent and complexity of the project.

Legal AI solutions can generally range from a few hundred dollars to several hundred thousand dollars, depending on the functionalities. There are some more simple tools that do not require an implementation. However, more sophisticated AI software may also require significant time and personnel to implement. 

Human intelligence and expertise 

There is a huge emphasis on the fact that most AI implementations will help you to be more effective. Nevertheless, AI can not replace lawyers’ work and human elements in the case of critical tasks. 

AI relies on prompts, inputs, and pre-set data. Incorrect data or a missing document can lead to incorrect outputs. AI is only as good as the humans using it. Relying 100% on AI can easily result in additional costs and time. 

The key is to find the right balance between AI and human collaboration. You can have results more effectively by leveraging AI to automate repetitive tasks and analyze massive datasets. However, AI does not have the ability to make strategic decisions or build client relationships.  

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