The Past, Present, and Future of AI in Legal Tech

August 11, 2022
August 11, 2022
Gary Sangha | Founder & CEO

The link between science and human imagination is as old as recorded history. Ancient Greek writers like Homer and Hephaestus imagined the gods would one day create humanoid robots to serve mankind. Ancient Egyptian and Indian texts imagined the benevolent use of automatons to perform simple tasks, such as rowing a boat or pouring water. 

Similarly, artificial intelligence (AI)—the simulation of human intelligence processes by machines—has long fascinated legal professionals looking for ways to delegate the most time-consuming and mundane tasks to machines that can work proficiently and without fail. In doing so, legal teams could have more time to focus on what they do best: mitigate risk, solve problems, develop best practices, and deliver valuable legal advice to clients. 

What was once wishful thinking has now become a reality. The AI in legal tech market is growing like never before. This article examines the history of AI in legal technology, its current innovations, and its exciting potential future applications. 

Legal tech AI in Its Infancy

The first mention of “artificial intelligence” occurred in 1956 at a Dartmouth College conference in Hanover, New Hampshire. Despite MIT cognitive scientist Marvin Minsky’s opinion that “within a generation, the problem of creating artificial intelligence will be substantially solved,” interest in funding died off for a time. It was still too arduous and expensive to pursue seriously. 

The 1970s saw the use of typewriters to create legal documents and an increase in electronic document storage through the LexisNexis system, which greatly accelerated legal research and contract drafting processes. During the 1980s, lawyers were sending faxes and sharing spreadsheets via floppy disks. And once personal computers became mainstream in the 1990s, data storage became much cheaper. 

Over the past two decades in particular, the rise of customer relationship management (CRM) software, e-signatures, cloud computing, and the software as a service (SaaS) delivery model has completely revolutionized how business is conducted in the legal sphere.

As recently as five years ago, AI become THE topic in legal tech with its ability to incorporate the following technologies:  

  • Natural language processing (NLP): which improved the accuracy at which machines could scan and interpret documents while also creating contextual suggestions
  • Blockchain: which allowed users to program systems to automate sophisticated document changes based on custom “if/then” commands 

  • Machine learning: which improved software performance based on feedback and analytics

Increased investment in AI by legal startups rapidly advanced the number of products on the market geared toward performing tasks faster and more efficiently.

Overview of the Current AI Landscape

The AI in legal tech software market, presently valued at $548.44 million, is projected to grow by 17% over the next five years to reach an estimated $2.6 billion. With in-house legal departments spending 50% of their time reviewing contracts, the use of AI to alleviate bottlenecks and drive business forward represents a tremendous opportunity to streamline workflows. 

Gartner found that 74% of the most efficient legal departments have implemented plans for legal transformation. As a result, 79% of the most efficient companies have accelerated the speed at which they develop appropriate guidance and governance. By contrast, only 38% of the least efficient businesses have made plans for transformation, resulting in 43% of them finding ways to frantically make good risk-adjusted decisions and pivot with changing conditions. 

The use of AI in legal tech has surged exponentially in recent years as a means of helping organizations keep pace with shifting business trends. According to the 2020 Legal Analytics Study conducted by LexisNexis, 92% of law firms planned to increase their adoption of AI—mainly driven by the need to excel in business (57%) and client expectations (56%). While many law firms were already using AI to gain new insights into case law, the use of AI in business processes such as contract review is a relatively new application. 

But streamlining contract review, negotiation, and risk management is a pressing concern. Not only can it save legal teams precious time and accelerate business processes, but it’s also crucial for attracting, training, and retaining talent that desires more fulfilling tasks and expects technology to be an integral part of their daily workflows. Clients may also come to expect that their lawyers are using cutting-edge technology to be both more precise with their legal advice and more efficient with the speed at which they deliver it, presumably also driving down the cost of outside legal work.

A new IBA report revealed that over 70% of young lawyers are concerned about their work-life balance, mental health, and limited opportunities for career advancement. Replacing unchallenging, repetitive tasks with purpose-driven and meaningful work allows the intellect and ambitions of these young professionals to thrive. In fact, 40% of survey respondents said they believe AI in legal tech training will be critical to their future career development.

The Exciting Future of AI in Legal Tech

In the coming years, we are likely to see a number of advancements in the future of AI in legal tech, including:  

  • Large-scale searching and updating capabilities

  • Bulk analytics that can capture relevant data on contract risk, performance, and efficiency

  • AI that can rewrite portions of text under intense negotiations, increasing the likelihood of contracts being executed successfully

  • AI-guided contract drafting based on analytics, best practices, and attorney inputs

Tomorrow’s lawyers will be freed from menial contract review work and develop new ways of tackling legal conundrums alongside technology. As Thomson Reuters predicts, some jobs (like those focusing solely on document search and retrieval) will be eliminated, others (like legal engineers or AI algorithm writers) will be created, and most will be based on human touch value adds like analysis and advice. AI will never replace human lawyers; instead, it will enable them to work better, faster, and more cost effectively than ever before.

LexCheck Offers Breakthrough AI To Accelerate Contract Review

Epitomizing the exciting future of AI in legal tech, LexCheck is an award-winning, AI-powered contract review and negotiation solution used by corporate legal departments around the world. Its breakthrough automation technology can help legal teams:

  • Fully redline contract drafts within five minutes

  • Create an AI Digital Playbook based on previously reviewed agreements

  • Flag inconsistencies, errors, and omissions in drafts

  • Codify a company’s best practice language and key negotiation positions

  • Redline contracts based on risk assessment and escalate them to appropriate staff

  • Train employees on corporate legal playbook standards

With these tasks handled by innovative technology, LexCheck greatly accelerates contract review and helps companies reduce otherwise time-consuming tasks. Contract execution times are 33% faster, and legal teams can spend >80% less time reviewing contracts of all sizes and complexity. 

AI in legal tech is only getting smarter. Work with LexCheck to see how the future of contract review is already here. Contact us at to learn more, or request a demo to see the technology in action.

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