Unlocking legal tech for fast-growing challengers: key insights for legal teams
This six-step guide summarizes the event's key insights and aims to equip you with the knowledge to make the right decisions when it comes to deciding on legal tech.
By Annemarie Bloemen
Expertise: Data & Digital Services
08.05.2024
Unlocking legal tech for fast-growing challengers: key insights for legal teams
Today’s legal teams, particularly those within fast-growing challengers, face complex tasks that demand in-depth legal expertise, risk management knowledge and operational efficiency. Legal technology has evolved to offer legal teams support with these difficult tasks, yet navigating the vast array of solutions is daunting.
To address this challenge, we recently hosted a legal tech event together with ITGC tailored to general counsels of challengers. This event brought together experts to discuss the impact of legal technology. This guide summarizes the event's key insights and aims to equip you with the knowledge to make the right decisions when it comes to deciding on legal tech.
1. Assess your readiness and understand the real needs
When integrating legal technology, it's crucial to take a people-first, process-oriented approach. Evaluate your team's structure, roles, and responsibilities, and identify any inefficiencies in workflows and communication. Consider what efforts have already been attempted and analyze your department’s processes to pinpoint areas for improvement, especially in repetitive or compliance-critical tasks.
After such review of the operations of our own corporate team, we found opportunities to enhance the standardization of our drafting processes. Initially, we were inclined to deploy a template tool capable of producing complex agreements via questionnaires. Thankfully, we opted to first examine our people and their workflows. It became clear that our Word templates were outdated, requiring not a form overhaul but an update in content. To address this need, we formed a project group tasked with refining these templates. During this process, we noticed a reluctance within the team to use complex templates for drafting agreements; there was a distinct preference for starting with a basic template that could be expanded through customizable clauses. This insight led us to discover Clausebuddy, a platform suited for such tailored adjustments.
2. Define your goals
Before selecting a tool, you should define specific criteria for success. This involves identifying tool KPIs, such as enhancements in efficiency, throughput and timelines, reductions in ‘re-inventing the wheel’, or improvements of the relationship with and input from the business.
Implementing a pilot program can serve as an excellent method to evaluate these criteria in a controlled environment. For example, in our pilot with Clausebuddy, we initiated the test with a focused group led by our corporate partner, Marieke Pols. This setup allowed us to monitor and measure the tool's performance against our success criteria. Regular bi-weekly meetings during this phase assisted with addressing challenges, sharing successes, and ensuring that the tool met the needs and expectations of the team. The results from the pilot were positive. This included clear improvements in efficiency and team satisfaction and provided a clear indication that the tool was ready for a broader rollout.
3. Short-term: AI is a summer intern
Recently, Artificial Intelligence (AI) has become a major focal point in the legal tech conversation. One of the most immediate uses of AI in legal practice is drafting text using Large Language Models (LLM) like GPT-4 (you can guess which tool assisted us with this text :) ). You can create a ChatGPT business account today and input simple prompts, like “draft a comprehensive confidentiality clause for a franchise agreement”, to generate draft texts. LLMs can also significantly enhance the document review process. ChatGPTcan support you to review contracts, flag potential issues, and pose questions. This analysis is powered by the AI’s ability to contextually understand and evaluate text elements, such as applicable laws or payment terms.
Nonetheless, LLMs are not without their challenges and risks, notably their tendency to generate inaccurate or irrelevant content, often referred to as "hallucinations". As inaccurate content is a no-go in the legal field, LLMs should be used cautiously. Similar to deployment to integrating a summer intern:
4. Long-term: start training with AI today
In the legal field, adopting AI is not merely about embracing new technology but preparing for the future. Do not forbid the use of LLMs, but acknowledge their strengths and weaknesses and create an environment where people can learn from eachothers mistakes. Initiating AI training for your team sets the foundation for them to become familiar with these tools and prepares them for more advanced applications as they evolve.
With the appropriate usage policy in hand, you can encourage your team members to use AI for practical tasks such as drafting documents or analyzing contracts. This direct engagement helps them understand the nuances of AI technology and its potential impact on their work. As they become more adept, they can delve into more complex uses, enhancing their problem-solving skills. This is also something your business may expect from the legal team.
As AI is not perfect, having regular sessions on lessons learned and mistakes made will enhance security and quality.
5. Automation sets you free
Despite AI's prominence in tasks like data analysis and document drafting, the true cornerstone of legal tech, in our view, is automation. This will help with handling repetitive tasks such as scheduling and document management, reducing human error and freeing up staff for more complex work. This should boost operational efficiency and facilitate integration of other AI technologies.
Automation areas are Legal Entity Management (LEM) and corporate housekeeping. Tools like Corporify use automation to ensure reporting and compliance, and keep corporate records organized. In these systems, AI plays a supportive role, enhancing specific functions like document translation. It can also contribute to strategic planning by enabling detailed queries about operational aspects, such as lead times for corporate restructuring.
Automation of Contract Lifecycle Management (CLM) systems can also be useful:
For a comprehensive understanding of the CLM landscape, the extensive CLM Market Study by Innolaw offers more insights.
6. What doesn’t get measured, doesn’t get managed
For legal teams, proving their value to the board and other departments is essential, especially when discussing budgets and staffing. Metrics are crucial for demonstrating the impact of legal teams. Despite the importance of legal teams, their output of qualitative assessments can obscure their contributions, making it very useful to work with metrics.
Integrating legal technology with data analytics capabilities can address this challenge, especially for larger legal teams in larger organisations. For example, CLM systems that track and display the volume of processed contracts provide tangible evidence of the legal team's output.
Beyond contract management, legal teams handle a range of responsibilities, including marketing compliance reviews and HR-related inquiries. To effectively manage this diversity, implementing a legal intake process is very useful. This process tracks and manages queries based on their origin, relevance, and handling time, streamlines operations and provides measurable metrics of the work of the legal team.
Tools like the Sample Vendor Scorecard from the Legal Intake Guide by ITGC and Streamline.ai can assist in choosing an appropriate legal intake tool.
Next steps
We are available to further brainstorm on what would work best for you, or assist you based on the experience we had with the implementation of our own legal tech tools.
Happy to help - do not hesitate to contact Marieke Pols or Annemarie Bloemen for advice and support.
Today’s legal teams, particularly those within fast-growing challengers, face complex tasks that demand in-depth legal expertise, risk management knowledge and operational efficiency. Legal technology has evolved to offer legal teams support with these difficult tasks, yet navigating the vast array of solutions is daunting.
To address this challenge, we recently hosted a legal tech event together with ITGC tailored to general counsels of challengers. This event brought together experts to discuss the impact of legal technology. This guide summarizes the event's key insights and aims to equip you with the knowledge to make the right decisions when it comes to deciding on legal tech.
1. Assess your readiness and understand the real needs
When integrating legal technology, it's crucial to take a people-first, process-oriented approach. Evaluate your team's structure, roles, and responsibilities, and identify any inefficiencies in workflows and communication. Consider what efforts have already been attempted and analyze your department’s processes to pinpoint areas for improvement, especially in repetitive or compliance-critical tasks.
After such review of the operations of our own corporate team, we found opportunities to enhance the standardization of our drafting processes. Initially, we were inclined to deploy a template tool capable of producing complex agreements via questionnaires. Thankfully, we opted to first examine our people and their workflows. It became clear that our Word templates were outdated, requiring not a form overhaul but an update in content. To address this need, we formed a project group tasked with refining these templates. During this process, we noticed a reluctance within the team to use complex templates for drafting agreements; there was a distinct preference for starting with a basic template that could be expanded through customizable clauses. This insight led us to discover Clausebuddy, a platform suited for such tailored adjustments.
2. Define your goals
Before selecting a tool, you should define specific criteria for success. This involves identifying tool KPIs, such as enhancements in efficiency, throughput and timelines, reductions in ‘re-inventing the wheel’, or improvements of the relationship with and input from the business.
Implementing a pilot program can serve as an excellent method to evaluate these criteria in a controlled environment. For example, in our pilot with Clausebuddy, we initiated the test with a focused group led by our corporate partner, Marieke Pols. This setup allowed us to monitor and measure the tool's performance against our success criteria. Regular bi-weekly meetings during this phase assisted with addressing challenges, sharing successes, and ensuring that the tool met the needs and expectations of the team. The results from the pilot were positive. This included clear improvements in efficiency and team satisfaction and provided a clear indication that the tool was ready for a broader rollout.
3. Short-term: AI is a summer intern
Recently, Artificial Intelligence (AI) has become a major focal point in the legal tech conversation. One of the most immediate uses of AI in legal practice is drafting text using Large Language Models (LLM) like GPT-4 (you can guess which tool assisted us with this text :) ). You can create a ChatGPT business account today and input simple prompts, like “draft a comprehensive confidentiality clause for a franchise agreement”, to generate draft texts. LLMs can also significantly enhance the document review process. ChatGPTcan support you to review contracts, flag potential issues, and pose questions. This analysis is powered by the AI’s ability to contextually understand and evaluate text elements, such as applicable laws or payment terms.
Nonetheless, LLMs are not without their challenges and risks, notably their tendency to generate inaccurate or irrelevant content, often referred to as "hallucinations". As inaccurate content is a no-go in the legal field, LLMs should be used cautiously. Similar to deployment to integrating a summer intern:
- Verification of Work: Similar to overseeing an intern's work for accuracy, it is essential to review all AI-generated outputs. As mentioned, AI systems can err and should not be wholly relied upon without proper verification.
- Clear Instructions: Just as clear guidance is key for supporting an intern, precise prompts are key for directing AI. These serve as specific instructions that help generate the desired output. For instance, Spotdraft offers seven expert-crafted prompts designed to optimize LLM usage in contract reviews, detailed in this whitepaper.
- Familiarization with Business Practices: When you introduce an intern to your company, it's crucial to help them understand and follow your established business practices. Similarly, when configuring AI systems such as ChatGPT, you need to program them with specific guidelines that reflect those same practices. This involves integrating your company's negotiation techniques and essential fallback strategies directly into the tool. With ChatGPT, you achieve this by clearly defining these parameters and instructing it to consider them in its responses.
- Task Segmentation: Just as a summer intern may struggle with large, complex projects, AI systems have a limited "context window" and can only process a certain amount of text at a time. It is often more effective to divide larger tasks into manageable segments.
- Security Considerations: Just as an intern might inadvertently breach security protocols, AI systems also carry potential security and confidentiality risks. It is crucial to secure AI interactions by carefully reading their terms of service before use and implementing stringent security measures, such as restricting the sharing of confidential information identifying clients or individuals with the AI.
4. Long-term: start training with AI today
In the legal field, adopting AI is not merely about embracing new technology but preparing for the future. Do not forbid the use of LLMs, but acknowledge their strengths and weaknesses and create an environment where people can learn from eachothers mistakes. Initiating AI training for your team sets the foundation for them to become familiar with these tools and prepares them for more advanced applications as they evolve.
With the appropriate usage policy in hand, you can encourage your team members to use AI for practical tasks such as drafting documents or analyzing contracts. This direct engagement helps them understand the nuances of AI technology and its potential impact on their work. As they become more adept, they can delve into more complex uses, enhancing their problem-solving skills. This is also something your business may expect from the legal team.
As AI is not perfect, having regular sessions on lessons learned and mistakes made will enhance security and quality.
5. Automation sets you free
Despite AI's prominence in tasks like data analysis and document drafting, the true cornerstone of legal tech, in our view, is automation. This will help with handling repetitive tasks such as scheduling and document management, reducing human error and freeing up staff for more complex work. This should boost operational efficiency and facilitate integration of other AI technologies.
Automation areas are Legal Entity Management (LEM) and corporate housekeeping. Tools like Corporify use automation to ensure reporting and compliance, and keep corporate records organized. In these systems, AI plays a supportive role, enhancing specific functions like document translation. It can also contribute to strategic planning by enabling detailed queries about operational aspects, such as lead times for corporate restructuring.
Automation of Contract Lifecycle Management (CLM) systems can also be useful:
- Contract Creation: Automation uses standardized templates to draft contracts, aiming for uniformity and the reduction of errors.
- Contract Negotiation: Digital tools can streamline document versioning and communication, assisting the negotiation process.
- Approval Workflows: Automation quickens the routing and review of contracts, which should enhance compliance and shorten review cycle times.
- E-Signing: E-signature technologies help with swift and secure contract execution, independent of geographic locations.
- Managing Contract Obligations: Legal tech can be used to alert stakeholders to impending deadlines or required actions.
- Contract Renewals: Automated notifications about upcoming contract expirations should provide for sufficient time for, contributing to business continuity.
For a comprehensive understanding of the CLM landscape, the extensive CLM Market Study by Innolaw offers more insights.
6. What doesn’t get measured, doesn’t get managed
For legal teams, proving their value to the board and other departments is essential, especially when discussing budgets and staffing. Metrics are crucial for demonstrating the impact of legal teams. Despite the importance of legal teams, their output of qualitative assessments can obscure their contributions, making it very useful to work with metrics.
Integrating legal technology with data analytics capabilities can address this challenge, especially for larger legal teams in larger organisations. For example, CLM systems that track and display the volume of processed contracts provide tangible evidence of the legal team's output.
Beyond contract management, legal teams handle a range of responsibilities, including marketing compliance reviews and HR-related inquiries. To effectively manage this diversity, implementing a legal intake process is very useful. This process tracks and manages queries based on their origin, relevance, and handling time, streamlines operations and provides measurable metrics of the work of the legal team.
Tools like the Sample Vendor Scorecard from the Legal Intake Guide by ITGC and Streamline.ai can assist in choosing an appropriate legal intake tool.
Next steps
We are available to further brainstorm on what would work best for you, or assist you based on the experience we had with the implementation of our own legal tech tools.
Happy to help - do not hesitate to contact Marieke Pols or Annemarie Bloemen for advice and support.
