Embracing AI in Legal Departments: Strategies for Successful Implementation

As artificial intelligence (AI) continues to transform industries, the legal sector finds itself at a critical juncture. In-house legal departments are facing increasing pressure to adopt AI technologies to improve efficiency and reduce costs. This pressure is well-founded, as recent studies have identified the legal industry as one of the top sectors predicted to be significantly impacted by AI.

A recent webinar featuring legal industry leaders from Axiom, Maryam Salehijam, Ph.D., and Instacart, Nicole Altman (Senior Counsel) and Dr. Helena Vrabec (Privacy Attorney) explored key strategies for successfully integrating AI into legal departments. Their insights are particularly relevant given the growing importance of AI expertise in the legal profession.

The AI Imperative in Legal Work

With the excitement of technological change and advancement, legal professionals (in-house and legal operations alike) find themselves asking understandable and heavy questions: Will I be replaced? Am I going to lose my job?

Altman quelled those fears for legal professionals while posing another important distinction: "You won't be replaced by AI, but you will be replaced by somebody who knows how to use AI." Altman backed her sentiment by pointing out the recent research study conducted by Microsoft:

“Microsoft and LinkedIn surveyed around 30,000 people across various countries about how they are already using AI and their attitudes towards it, and (I think it was) 66% of employers/leaders said that they wouldn't hire somebody who didn't know how to use AI, and around 77% said they would hire someone with less skills who knew how to use AI than someone with more skills who did not know how to use AI."

This shift in hiring preferences underscores the importance of developing AI literacy and skills for legal professionals at all levels.

Understanding the AI Landscape

One of the first steps in embracing AI is recognizing its pervasiveness and potential. As Altman pointed out, "AI has been embedded in our culture for a long time. It's just that generative AI has sort of taken the world by storm and has created these new possibilities."

Many legal professionals may already be using AI without realizing it. Common examples include:

• Predictive text in email
• Personalized recommendations on e-commerce sites
• Navigation apps like Google Maps

The key is to distinguish between different types of AI and understand their specific applications in legal work. Vrabec emphasized the importance of "draw[ing] the line between generative AI and other types of AI" as regulators are increasingly focusing on generative AI in particular.

Identifying Opportunities and Pain Points

When considering AI implementation, it's crucial to look beyond just addressing pain points. Vrabec stressed the importance of viewing AI as an opportunity: "I like to think about AI as an opportunity because as a privacy attorney, I've been trained to think about AI and all new, risky, unproven technologies in a very critical way."

Some potential areas where AI can add value in legal departments include:

1. Data security: AI-driven tools can help detect vulnerabilities and respond to data breaches more effectively.
2. Privacy compliance: AI can assist in scaling privacy programs and managing complex compliance requirements.
3. Drafting assistance: Generative AI can help refine writing, adjust tone, and improve overall communication.

Altman shared a practical example: "I use it all the time to draft or refine emails and documents that I've written. I don't take what it gives me wholesale, but it always has something useful to offer."

Selecting the Right AI Solutions

When evaluating AI tools for legal departments, the panelists suggested considering the following steps:

1. Define the problem and goal clearly
2. Research available tools and get demos
3. Understand the baseline state and how progress will be measured
4. Conduct pilot programs to validate effectiveness

Altman advised, "We are in the midst of doing that with a number of specific legal AI tools [...]. Through the piloting to being hands-on and working with it, we are finding in some cases that it does as advertised, and in some cases, it doesn't quite live up to what we expected it to be able to do."

In order to evaluate the effectiveness of the program, the panelists also highlighted that it's important to involve a cross-functional team in the process, including commercial, data privacy, litigation, and employment specialists, as well as IT and security teams.

Risk Assessment and Due Diligence

When considering AI solutions, legal departments must conduct thorough risk assessments. Vrabec outlined some key questions to ask:

• Has a risk assessment been done on the vendor or technology?
• What are the data flows involved?
• Who will be the primary users of the tool?
• Have adequate training and guidelines been put in place?

Additionally, she noted it's crucial to examine:

• Confidentiality and security measures
• Compliance with relevant regulations
• Data storage and processing locations

Change Management and Implementation

While it may be obvious that implementing AI solutions requires careful change management, the panelists emphasized the importance of some key strategies such as:

1. Set realistic expectations: AI can’t do it all (at least not yet), so Vrabec recommended keeping expectations realistic and assessable. Be ready to adapt when necessary.
2. Involve end-users early to address fears and concerns: Altman shared an example of team members being resistant to change when updating a document management system. She noted, "I brought [our most fearful team members] into the working group to vet the system and help design it.” By really involving those most resistant, she was able to better understand their concerns, including a lack of understanding and fear of job loss.
3. Develop a strong implementation team and plan: Vrabec emphasized, "The fundamental piece in my experience is a good and strong implementation team and implementation plan." When not implemented correctly, tech can perform poorly which hinders the efforts being made.
4. Plan for ongoing maintenance: Vrabec cautioned what happens when you don’t have a good plan to maintain the software once properly implemented. “AI-driven technologies are based on massive amounts of data, right? Well, if the data is no good, then the results that are coming out can’t be good either," she explained. In order for tech to be reliable, their data sources must remain reliable as well.
5. Allocate sufficient resources: Consider not just the cost of the tool, but also the headcount required to maintain the system and manage the change. Salehijam shared an example of a contract management system budgeted for $500,000 but instead required $750,000 with the addition of headcount needed to maintain the system. That resulted in a “vicious cycle where the team thinks technology isn't going to help. But it's because the technology wasn't put in place in a way that was thoughtful to begin with.”

Staying Competent and Competitive

As AI becomes more prevalent in legal work, staying up-to-date with these technologies is becoming a professional responsibility. Altman pointed out, “Everyone's going to be using generative AI more and more, and if you think about the rules of professional responsibility that govern all lawyers, you're required to stay competent in various domains.” It’s important for legal professionals who utilize these software programs to continuously look at the generated output with a critical lens, rather than trusting blindly the accuracy of the content created.

But as the panelists note, no one should be fearful of using them. It’s a necessary part of the legal industry to keep growing. For law firms and legal service providers, actively adopting and experimenting with AI tools can be a competitive advantage. Vrabec shared an insight from an outside counsel: "Their firm is purposefully trying to be the early adopter of a lot of technologies. By proactively trying to come up with new tools, they are experimenting to see how they can better improve the advice they are providing clients."

Key Takeaways and Action Items

1. Develop AI literacy: Given the increasing preference for AI-savvy legal professionals, prioritize education and understanding of how AI tools can be applied in current processes.
2. Experiment with AI tools: Altman encouraged “figuring out what problems you need to solve then experimenting with AI tools to validate and soothe those needs.”
3. Start small and involve stakeholders: Begin with manageable projects and include relevant team members in the process.
4. Conduct thorough risk assessments: Evaluate security, privacy, and compliance implications of AI tools.
5. Develop a comprehensive implementation plan: Consider resources, training, and ongoing maintenance needs.
6. Budget realistically: Factor in the full cost of AI implementation, including ongoing maintenance and potential headcount increases.
7. Stay informed about AI developments: Regularly update your knowledge of AI capabilities and limitations in legal work.
8. Lead the change: Vrabec emphasized, "We have a great opportunity as lawyers to be working in this interesting era and have the chance to really lead the change."

As the legal landscape and industry continues to evolve with AI, it's crucial for legal professionals to take a proactive approach to understanding and implementing these technologies. By carefully considering the opportunities, challenges, and best practices discussed in this webinar, legal departments can position themselves to leverage AI effectively while managing associated risks.

For a more in-depth exploration of these topics and additional insights from legal technology experts, we encourage you to listen to the full webinar recording. The discussion provides valuable perspectives on navigating the AI landscape in legal work and offers practical advice for successful implementation.

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