5 tasks that AI and legal technology can help with in 2022

Kara Wen | February 8, 2022 | Articles

Advanced legal software is no longer a luxury for corporate legal departments; it’s now a necessity. Even with GCs prioritizing cost control, Gartner still predicts that legal ops technology budgets will triple by 2025. Additionally, artificial intelligence (AI) software use in the legal industry is expected to grow by over 28% by 2026.

The COVID-19 pandemic emphasized this need for comprehensive legal technology. The crisis pushed teams to the brink, particularly ones that only had manual spreadsheets and legacy tools to rely on. This caused a rapid paradigm shift, where the benefits of bringing on AI and legal technology outweighed the initial cost.

With so many varying, complex responsibilities, there’s no one-size-fits-all tech solution for different legal teams. To figure out what kind of digital tool will give your unique team the best ROI, let’s look at the different ways AI and legal technology can save you time and money across these five key areas:

1. Invoice review

Manually managing hundreds of invoices from different vendors drains your time and makes it easy for costly billing errors to slip through. You can’t devote time to finding areas to save money when you have to stay focused on low-level admin tasks like checking in on invoice approval statuses.

“Is your in-house attorney’s time better spent reviewing each time entry of numerous invoices and communicating the findings with each law firm each month, or practicing law and managing risk for your organization?” – Virginia Griffith, Law.com

How AI can save the day

AI technology gives you a much stronger defense against unnecessary expenses than you have when reviewing invoices on your own. As noted in an Onit survey of corporate legal departments, “one legal operations leader reported a block billing charge of more than a million dollars — one that AI caught but only after it had made it past first reviewers.”

imageSource: SimpleLegal

Artificial intelligence like SimpleReview uses natural language processing and supervised machine learning to automatically flag billing errors and violations. It does this by scanning your invoice database to learn what common billing issues are and highlights problems based on the billing guidelines you enter. For instance, you can input codes and keywords on what makes up an expense violation, and AI will find any line items that match.

How non-AI legal tech can save the day

Since manual invoice review and management is such a costly hassle, it’s no wonder that e-Billing was the second-most adopted legal tech of 2021 (behind e-Signature). With a legal e-Billing platform, all your invoices are kept in an organized digital database that you can sort through with the click of a button — no more stacks of papers!

imageSource: SimpleLegal

Legal e-Billing technology also speeds up workflows by using automation to route invoices to assigned approvers. It pings parties if they don’t respond, which reduces time spent on back-and-forth communication. You can also check approval statuses in a real-time dashboard.

Artificial intelligence like SimpleReview uses natural language processing and supervised machine learning to automatically flag billing errors and violations. It does this by scanning your invoice database to learn what common billing issues are and highlights problems based on the billing guidelines you enter. For instance, you can input codes and keywords on what makes up an expense violation, and AI will find any line items that match.

2. Legal spend analysis and reporting

It’s hard to effectively analyze legal spend and demonstrate the value of legal ops when using spreadsheets or legacy software. These tools frequently have incorrect or incomplete information because of manual data entry. This impacts the quality of your spend analysis. It also takes much longer to pull reports together.

These are big obstacles, especially knowing how focused general counsels are on effective cost control. Gartner found that between 2018 and 2020, the number of legal ops leaders tracking internal and external spend increased by 35% and 32%, respectively.

How AI can save the day

Trying to find patterns across hundreds or thousands of legal spend data points is mentally draining. An AI tool relieves this mental strain. With pre-set algorithms, legal AI can highlight financial trends and unusual line items. This shaves hours off your legal analytics process. Consider it like SparkNotes for your legal spend: pulling out the key ideas so you quickly get an understanding of what’s going on. Then, you can dive deeper if needed.

How non-AI legal tech can save the day

A legal spend management platform makes sure you have all the financial information you need in one central location. It pulls spend data from multiple sources into the software and updates in real time. You can be confident that the information you’re bringing to the C-suite is accurate.

This type of legal technology also supports thoughtful spend analysis and decision-making. You can easily track metrics that are harder to collect in a spreadsheet, like spend by timekeeper or practice area, which gives you more time for higher-level work.

And no more taking hours to get one report out the door. Many legal spend management platforms have reporting templates to expedite the process. You can create thorough legal spend reports with a few clicks of a button instead of having to manually pull everything together.

3. Contract management

Contract review takes hours to complete manually, which takes in-house counsel away from more strategic work. (Have you noticed a theme yet?)

Additionally, poor contract management processes make it more difficult for attorneys to identify and proactively respond to risks. The 2021 EY Law Survey gathered these concerning statistics from GCs:

  • 69% don’t have a standard contract creation process
  • 71% don’t monitor contracts for “deviations from standard terms”
  • 78% don’t have a system to stay on top of contract obligations

How AI can save the day

Much like AI-based e-Billing, AI contract software learns from your previous contracts and pre-entered data sets (like a clause library). It then uses this knowledge to flag contracts missing key clauses, insert pre-approved clauses, and highlight potential risk factors. And the best part? A tool like ReviewAI can do it all in under 90 seconds.

This saves legal professionals further time by reducing back-and-forth with sales. There’s less need for sales to ask simple contract questions because AI software automatically applies the relevant contract guidelines you entered. This speeds up the contract approval process by around 70%.

How non-AI legal tech can save the day

Contract lifecycle management software comes with templates so you don’t have to draft from scratch. This consistent format reduces the risk of errors and speeds up the drafting process. You can also set automatic alerts to remind you of approaching deadlines so you can stay on top of fulfilling contract obligations on time.

4. Document management

Without a centralized legal document management system (DMS), legal has to spend more time tracking down files. And once they finally locate them, they still have to confirm if they’re the most current versions. These are frustrating issues, especially when you’re on a tight deadline or working remotely.

How AI can save the day

After scanning through all your documents, an AI-based DMS uses that information to automatically tag and sort them. This makes it easy to quickly find what you’re looking for. And the more you use the AI system, the better the AI gets at categorizing. It also looks for recurring language between documents to “cluster” them together. This is helpful when you may not know the document title, but you know what type of matter it was (like a regulatory case). Even if you have a sophisticated document storage system, it doesn’t have these algorithms that significantly speed up your search process.

How non-AI legal tech can save the day

A DMS functions as a searchable, cloud-based storage center. Besides searching text documents to find what you need, some new technologies use optical character recognition to pull information from images and PDFs. Legal receives thousands of scanned files, so ensuring they don’t get left out of the search function is a huge time-saving asset.

Using a legal DMS also gives you peace of mind because you know your documents are secure. Thanks to encryption and control over user permissions, you can feel confident that sensitive client information is well protected and won’t get accidentally shared. You don’t get that type of security with a filing cabinet!

For even more organization, look for a legal DMS that can integrate with software like Outlook so you can save and attach relevant emails to documents.

5. Vendor evaluations

Hard data is key to understanding which law firms are giving you a strong ROI on legal services. But despite the importance of vendor management to the bottom line, just 34% of legal ops teams use vendor metrics to review law firm performance. That’s like trying to decide if a football team is playing well without looking at stats on their wins and losses, rushing yards, or sack totals.

How AI can save the day

AI-based legal technology can flag invoices that don’t adhere to your billing guidelines. Vendors that are repeatedly flagged for billing issues should be cause for concern. Look further into areas like hourly rates and timekeeper assignments to see if it’s an isolated area or if you should end the partnership.

AI-based software is also helpful for supporting your diversity and inclusion (D&I) initiatives. If you request that your vendors fill out the ABA Model Diversity Survey, you can input their answers into your software. Then, you enter diversity criteria (say, outside counsel teams led by an attorney from an underrepresented minority group). The AI will then flag law firms that don’t meet it. This helps you benchmark where your company is at with reaching its D&I goals and can highlight vendors with low levels of diversity.

How non-AI legal tech can save the day

As former Forbes contributor Annie Brown writes, the point of a vendor management system is “to create a platform where vendors can now be managed in the way contacts have been managed by marketers.” Essentially, you have a system where all relevant vendor information is tracked and updated in real time. For example, you can see what outside counsel is currently working on and any notes from previous meetings with them.

This type of accessible, concrete information is key to accurately evaluating how all your vendors are doing. It also means you can compare similar vendors to each other and objectively rank them with metrics like total spend and matter lifecycle times. The ability to make decisions based on hard data rather than hunches means you can make more cost-effective decisions.

AI and legal technology help you make the most of your current headcount

Whatever goal you’re trying to achieve, using AI-based or automated legal technology in 2022 will increase your in-house team’s overall productivity. In turn, you can start to decrease your reliance on outside counsel, even if you can’t hire extra employees. This is an important cost-saving benefit, as many law firms plan on raising their rates by at least 5 to 10% in the new year.

To put a dollar sign on how much you can save by using SimpleLegal, head over to our savings calculator.