Three key insights into the future of AI in corporate legal departments
Winmark‘s annual survey of General Counsel (GCs) in large UK companies confirms that AI will have a significant impact in corporate legal departments over the next two to three years, through a host of applications including data analytics, predictive tools, document review and chat bots. Three key insights from the study are outlined below:
1, The legal function is about to embark on a journey of radical transformation driven by AI technologies....
63% of GCs say some form of AI will have a high impact in their organisation. It will not be a replacement for senior legal roles, but an enabler to allow better and faster decisions, leaving more time for senior experts to focus on creative and strategic legal tasks.
Increasing AI-powered support services and automation in processes such as contract management are expected to significantly reduce costs, streamline work processes, reduce repetitive tasks and allow GCs to focus on increasing productivity and creating value for their business.
Given this context it is unsurprising that the legal AI software market is expected to expand at over 30% a year, to be worth in excess of £1.5 billion by 2026 .
2. ... but there is a worrying AI skills and understanding gap.
It is imperative that all legal professionals consider where and how they can effectively implement AI, but only 31% say they have a good understanding of the technology’s potential legal applications. A quarter of GCs admit that past technology initiatives have not lived up to expectations and 40% say they find deciding what technology would make the best investment to be a challenge.
Less than a fifth of organisations have training in place for technology developments in legislation, which will inevitably result in a lack of critical technology expertise in the future.
Worries about cybersecurity and data privacy are also a significant barrier to innovation: over three quarters of GCs say they pose a high or very high risk, but only 58% are well prepared to deal with data privacy breaches and only 42% feel well prepared for cyberattacks.
There are similar shortfalls in preparedness to address all areas of potential technology risk: complexity of systems is an area of concern with a high perceived level of risk (66%) and a low level of preparedness (36%).
3. As AI becomes more powerful and pervasive, the role of the GC in developing ethical rules and codes of conduct will be increasingly important.
GCs will be increasingly called upon to identify and make ethical judgments in relation to the implementation and deployment of AI. Today’s ethical dilemma is tomorrow’s legal risk and legal professionals will be central to the establishment of a shared ethical AI framework that provides clarity about how the technology is best used to benefit individuals and society.
Ultimately, legal leaders need to develop the skillset and resources to be confident they have secure and ethical data and knowledge management processes; and are maximising the effective exploitation of the information held by their organisations to drive AI initiatives.
Addressing these needs should be a top priority for organisations and will require significant investment in internal and external training provision; and extensive support from professional and academic partners.
To learn more, download our Legal AI agenda here