When enterprises roll out new technology, in-house legal departments typically lag behind other business units with regards to adoption.

However, the advent of generative AI provides general counsel with a significant opening to move their departments to the front of the line, according to a white paper from integrated law provider Factor.

“GCs possess the power to commit management focus proactively, to invest team attention and effort intentionally, and to take on the mantle of GenAI sensemaker for both their teams and their stakeholders,” the white paper says. “This does not mean an impulsive and aggressive buy of an expensive GenAI product, but it might mean a prioritized commitment to keep pace with GenAI through a forward-leaning posture of learning, instead of a wait-and-see approach.”

The GenAI-focused white paper is co-authored by Ed Sohn, Factor’s global head of delivery capabilities, and Jae Um, founder and executive director at Six Parsecs, an insights firm for the legal market.

From a high-level perspective, they argue generative AI technology popularized by the introduction of ChatGPT last year can provide legal teams with a way to handle spiking demand for their services by boosting productivity.

The emerging technology’s potential to reshape the means of production at every level of work could impact 80% of legal spend, according to a press release about the white paper.

“GCs are in the driver’s seat and have a generational leadership opportunity, as they leverage this technology to transform their own teams, influence their organization’s approach to GenAI and help drive decision-making at the highest levels,” Sohn said in a prepared statement.

Focus on language

One reason the authors suggest generative AI should be instrumental for legal departments is that it is a technology with advanced language-centric capabilities.

They write that this aligns well with the fact that legal work “takes the form of contracts, policies, reviews, summaries, analyses — each employing the linguistic art and science of persuasion, compliance or agreement in written or oral form.”

Additionally, Sohn and Um say the large language models, or LLMs, that power generative AI tools “are purpose-built to process inputs and produce outputs in human language, exhibiting proficiency in complex language at a level indistinguishable from a white-collar professional.”

For example, the LLM known as GPT-4 from OpenAI scored in the 90th percentile on the Uniform Bar Exam earlier this year.

Likely use cases

Some legal professionals have voiced skepticism that generative AI will be able to help with complex tasks, but Sohn and Um say the technology has potential to support legal teams beyond the lower tranche of the value spectrum.

They write that LLMs can assist with four foundational areas of legal work: reading, drafting, researching and operating.

For example, emerging AI can help create a strong first draft of a legal document, as well as issue-spot on an inbound draft.

“An on-demand, fully-read AI teammate unlocks the holy grail of knowledge management — bringing to bear the aggregated experience of a team’s most seasoned lawyers on every negotiation and legal proceeding,” the authors write.

Their suggestions about emerging AI’s potential align well with a recent LexisNexis survey report indicating lawyers in several major countries are actively using generative AI for research, drafting documents and writing emails. 

Call to action

The authors acknowledge that the generative AI hype cycle is in full swing and that some of the claims about the emerging technology “may prove to be exaggerated, misleading or impossible to realize.”

As a result, general counsel will need to utilize their well-honed critical reasoning skills to separate signal from noise.

They will also need to be mindful of major risks associated with generative AI, including inaccuracy and bias.

But Sohn and Um urge legal chiefs to seize the moment to transform the legal function.

“This is a call for GCs to display unprecedented curiosity, imagination, and boldness — a daunting but exhilarating challenge,” the authors say. “For the motivated leader, the size of the prize is considerable, and the time to act is now.”