AI in Legal: Why Adoption of Major Players Is Crucial for Future-Proofing

A recent study from Thomson Reuters revealed that 40% of legal teams ‘have no plans’ for using Generative AI (GenAI) in their work. It’s a sombre picture, showing that risks and fear currently outweigh a desire to apply this new technology.

Yet, using artificial intelligence tools can have huge benefits for Legal teams. It can increase efficiency, reduce admin work and allow them to increase their caseload - driving revenue for the business.

AI-powered legaltech CLM solution providers must demonstrate that their tools can be applied ethically and securely to overcome Legal’s reluctance for adoption.

This article addresses the risks posed by GenAI Legaltech contract lifecycle management solutions, common AI concerns amongst Legal teams and how opting for an ethical and secure approach can help them to future-proof their business.

The risks posed by GenAI LegalTech CLM Solutions

Despite the proven benefits of AI, lawyers fear the potential pitfalls caused by it with the following concerns being cited:

• 82% are concerned about AI providing incorrect responses
• 66% raise the potential of malpractice claims for AI usage
• 59% worry about maintaining client confidentiality, security and data privacy
• 76% raise AI’s imperfect grasp of legal ethics and standards.

[Source: Law360]

GenAI-driven Legaltech contract lifecycle management solutions present further risks including:

• Limited Scope and Functionality: Proprietary AI tools are often designed for specific legal tasks, limiting their application. This limited scope can create inefficiencies and siloes when different departments, like procurement or finance, require similar AI capabilities but must use separate, specialised tools.
• Integration challenges: Industry-specific AI tools may not integrate well with widely-used platforms like G-Suite and Office. Poor integration can lead to fragmented workflows, requiring legal teams to juggle multiple systems, which reduces efficiency and increases risks.
• Security and Compliance Risks: Major AI providers invest heavily in security and compliance to protect sensitive information. Smaller, niche AI vendors may not have the same level of resources, potentially exposing firms to greater risks of data breaches and non-compliance with regulations.
• Inability to future-proof: As general AI becomes embedded in essential work suites, industry-specific tools risk becoming obsolete. Legal teams using these tools may find themselves at a disadvantage, unable to leverage the latest advancements in AI technology.

How Gen AI LegalTech CLM Solutions can lead to non-compliance

The integration of generative AI in legal technology has revolutionised the field by enhancing efficiency and accuracy in legal research, document generation and contract analysis.

However, these advancements come with significant risks of non-compliance, due to the lack of regulation around AI. Although this is improving with the introduction of legislation such as the EU AI act, it is difficult to see if policy-makers will be able to match the pace of new technological developments.

As it stands, four in 10 of the 214 lawyers surveyed by Berekely Research Group said they didn’t feel very confident in their organisation’s ability to comply with current AI regulations.

Respondents attributed their lack of compliance confidence to:

• Insufficient internal knowledge and training (61%)
• Inadequate data management and security (50%)
• Lack of compliance personnel (39%)
• Overly siloed departments (33%)

[Source: BRG]

Legal teams also face more than internal struggles. Worryingly, AI systems can produce "hallucinations" - generating plausible but incorrect information, leading to potential legal missteps.

This can be especially true if AI-powered legaltech solutions are being trained on improper or outdated datasets that can skew results and interpretations, causing further risks of non-compliance.

Why Businesses should choose Major aI players

Applying GenAI to legal practices can revolutionise efficiency and accuracy, but it must be done ethically and securely.

Instead of opting for proprietary legaltech software, businesses should leverage vendor and contract management solutions like Gatekeeper which integrate with major AI developers such as OpenAI.

These responsible corporate partnerships ensure the integration of cutting-edge AI technology while adhering to the highest standards of security and ethical use.

Industry-specific AI tools often lack the continuous development and broad applicability that major AI platforms provide. They can be limited in scope, slow to integrate new advancements, and may become obsolete as general AI tools become embedded in essential work suites like G-Suite and Office.

Relying on these narrowly focused tools can hinder legal teams by restricting their flexibility, scalability, and ability to leverage the latest innovations, ultimately impacting efficiency and competitiveness.

I believe, due to these risks, our customers' current and upcoming AI policies will soon be restricted to the largest and most secure technology providers that already form a core part of our customer's tech stack such as Microsoft and Google. In AI, access to the most data will always be the long-term winner, so betting against proprietary solutions is the best strategy for future-proofing.” - Patrick O’Connor, CEO, Gatekeeper

Why Businesses Should Consider GenAI Beyond The Legal Team

Gatekeeper offers advanced AI features, powered by OpenAI, including contract summaries and data extraction, which are essential for legal teams. They drive efficiency, accuracy and consistency within legal operations.

However, the real power of these features is unlocked when applied across the entire business, including Procurement and Finance teams.

For Procurement, AI-driven contract summaries provide a faster understanding of vendor agreements, enhancing transparency and decision-making. Procurement teams can better negotiate and manage vendor relationships by quickly extracting key terms and obligations, leading to cost savings and improved compliance.

In Finance, extracting and analysing contract data aids in financial planning and risk management. Financial teams can more accurately forecast expenses and identify potential liabilities, ensuring a more robust strategy that protects the business’s bottom line. 

Wrap Up

While AI-driven legaltech CLM solutions present significant problems, adopting a solution like Gatekeeper, which integrates AI features from OpenAI, can mitigate potential risks.

Gatekeeper not only enhances the capabilities of legal teams but also drives efficiency and collaboration across the entire organisation. This unified approach, supported by responsible corporate use of AI, gives businesses the confidence that ethics, privacy, and security are being upheld.  

If you're ready to apply AI to your legal operations, benefit your entire organisation and minimise the risk of using new technologies, book a call with us today.