Companies once built legal teams simply to provide legal advice. But the nature of legal operations has changed in recent years. In-house lawyers are now expected to define strategy, mitigate risk, find external opportunities, drive business objectives, add value, and contribute to commercial outcomes.
Shifting expectations has led to intense workloads. In-house lawyers have had to achieve more with less, which has led to a growing appetite for legal tech, as shown in the ³ÉÈËÓ°Òô In-house Legal Tech Survey 2023. Embracing tech has boosted return on investment, streamlined services, improved employee morale, and much more. It is no surprise that legal operations trends in 2024 all involve legal tech.
In this article, we explore five core trends, including the rise of generative AI, the move towards small-scale automation, innovations in document and vendor management, and the end of the billable hour.
(AI) will continue to prove the defining trend of 2024, as it has in 2023. The tech depends on huge data sets, complex algorithms, and advanced machine learning to respond to prompts. AI platforms generate text (, , etc), images (, , etc), audio (, , etc), video (, , etc), and so much more.
New AI platforms emerge every day. The tech is playing an increasing role in the legal sector – and every other sector – already powering legal research platforms and other legal tech.
In-house lawyers can, and should, use generative AI in myriad ways. They can, among other things, use AI to summarise complex information, draft emails and briefs, perform M&A due diligence, ideate and brainstorm to inform company strategy, employ predictive analysis to notice financial patterns or anomalies, review legal and vendor invoices, draft and analyse contracts, and so much more.
Generative AI is so widespread that it will inform all the below trends. In-house teams should ensure they use the tech effectively and that third-parties do, too. Isabel Parker, partner at Deloitte service, said in : "Corporate legal departments should challenge service providers on their use of AI and on the benefits that they will receive as a result."
Failure to use the tech leaves companies at a . Legal teams should start using generative AI – today.
However, caution needs to be applied when relying on generative AI tools, says Alison Rees-Blanchard, head of TMT legal guidance at ³ÉÈËÓ°Òô, pointing out that when these tools cannot find the relevant data, they have a tendency to make up the answers, or hallucinate."This means any generated output must be checked thoroughly. However, where those tools are trained on a closed and trusted data source, the user can have greater confidence in the generated output and hallucinations will be easier to identify, as verification of the output is made easier."
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Legal tech automation is often interpreted as something scary, something that leads to job losses and . But automation, at its best, only serves to eliminate tedious and repetitive tasks, affording lawyers the space and time to focus on the more creative and fulfilling work. The benefits to in-house teams, and their companies, include minimised time spent on tasks, reduced costs, less scope for error, increased employee satisfaction, and greater prospects for recruitment.
The key to unlocking such benefits is choosing the right tasks to automate. Legal teams should always start small-scale. A found that nearly two thirds of in-house legal work is repetitive or routine. That means plenty of tasks are ready for automation. One way to find the right tasks to automate is by identifying the tasks you hate the most – ideally high-volume, low-value work.
That is perhaps too simplistic. A more thorough option is the , which is designed to drastically increase productivity. In-house teams can start the audit by noting down everyone’s weekly tasks on a shared spreadsheet. Excel or Google Docs will suffice, but you could opt for a low-code cloud collaboration platform, , to render better visual representations of the data you’ve amassed. The choice in platform, as ever, depends on need.
By performing a task audit, you’ll locate tasks ripe of automation, drastically streamlining your operations and improving your business. Popular candidates for legal tech automation in 2024 will include and . But, as ever, the tasks for automation will differ depending on the company, so do your research and make the best choices to suit your needs.
In 2024, the era of the billable hour may well be over. It seems like the sector has long been expecting the move to alternative fee arrangements (AFAs) – but, finally, it appears a genuine shift towards AFAs has arrived. In-house teams looking to outsource legal tasks can now look to flat fees, capped fees, fixed fee per matter, fixed fee by phase, retainers, volume discounts, or blended rates.
And in-house teams should look to new ways of billing. One of the core benefits of AFAs, for example, is the drastic cost reductions. found, for example, that 81% of in-house teams have already used AFAs to reduce costs. But the benefits to in-house teams also depend on various incentives. The billable hour has long been criticised for encouraging slower solutions, allowing double-billing, creating uncertainty, and paving the way for overspending.
Using AFAs incentivise improvements to legal work. The key, as expressed in a ³ÉÈËÓ°Òô report on the billable hour, is to find the right billing method for your needs. Flat fees are not particularly useful for unpredictable work, for example, as they can lead to under- or over-spend. And, similarly, retainers can prove wasteful if legal teams cannot guarantee a steady amount of work. AFAs can lead to overcharging, and undercharging, but only if the parties involved are not clear with expectations.
The key for legal teams is to work out exactly what to outsource. In-house lawyers can employ a similar method to the above, with a task audit. Locate time-consuming, low-value work that is ripe for automation. Not tasks that absolutely must stay in-house. And, importantly, identify low-value jobs that you can easily outsource. Once you’ve established tasks that should be outsourced, you can consider the best methods of payment on a task-by-task basis. You can ensure that you work with third parties that are open to AFAs – an increasing number, according to recent reports.
A demonstrated that the average lawyer spends only two-and-a-half hours per day on client-facing tasks. The rest of that time is spent on admin. Drafting, managing, and retrieving documentation is one of the elements that sinks a great deal of time. It is no surprise, therefore, that in terms of investment, in-house teams are actively aiming to streamline document management.
A , for example, found the three main priority areas for legal technology investment are ‘document management systems’, ‘matter management’, and ‘collaboration tools’.
In-house lawyers deal with vast amounts of paperwork, contracts, and other legal documentation that needs to be effectively handled. (DMS) rely on automation, often bolstered by the power of AI, and can save in-house lawyers huge amount of time and efforts.
They store, organise, and retrieve contracts, and do so in no time at all. The tech also allows lawyers to track changes to documentation, as well as ensure constant regulatory compliance. A DMS will also have advanced search capabilities, as well as the ability to back-up documentation to mitigate risk.
Legal teams should onboard a DMS in 2024. The popularity of the software comes as no surprise, as it drastically streamlines awkward, time-consuming, tedious tasks that also presents risk. It’s the sort of tech that companies should invest in sooner rather than later, the longer companies wait, the more money and time they are wasting. And, in the end, they will likely invest anyway. So consider cutting losses – and investing in improvements to document management in 2024.
A showed vendor management was a top concern for in-house lawyers. Vendor management is a target for automation because it is easy to automate and provides myriad benefits, including cost-reductions, better quality of service from third-parties, greater compliance, and so on.
In-house teams can look to (VMS) to improve processes. The legal tech allows in-house lawyers to not only manage goods and services, but to mitigate all legal, financial, and reputational risks. VMS ensures due diligence, monitors vendors, and supports lawyers with compliance practices. It also takes care of oft-forgotten elements, such as data protection and cybersecurity.
Businesses in the UK and across the world face complex regulatory landscapes, global supply chains, and tough economic circumstances. Risk and compliance in that context should always be front of mind – and a VMS supports effective compliance.
Successfully managing vendors will also become more important in coming years, with renewed focus on core governance issues, , among others. Stakeholders, employees, and consumers will all want more transparency around the people with whom companies are working. And that fact alone makes a convincing argument for investing in your vendor management.
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