A golden opportunity for legal tech

Before diving into what this means for legal tech and sharing a potential forecast and thoughts for 2024, let's take a moment and think about how we got here.

From our perspective at Schoenherr, a leading law firm in Austria with a strong international footprint and 15 offices in the CEE/SEE region, innovation and collaboration were always at the forefront and an important pillar of our core values.

Constant change: from cloud to seasoned legal tech solutions to generative AI

The innovation journey for the past few years has been exciting, but one tends to forget that two or three years ago we were still debating regulations allowing law firms to use cloud solutions. These discussions are still relevant in some of our jurisdictions to this day, even if on a sentimental level.

For most firms and for our clients, these developments were heavily influenced and fast-tracked by two events: (i) the mass adoption of Microsoft Teams and, depending on the jurisdiction, alternative collaboration and communication solutions during the COVID-19 pandemic; and (ii) new LLMs and generative AI. The importance of these milestones cannot be overstated. They can be huge momentum drivers for our own digitalisation projects and innovation.

Whirlwind incoming

When ChatGPT landed in late 2022 and we saw the sheer number of new users engaging with this technology, we knew we were witnessing another pivotal moment. We wanted to quickly understand the capabilities of this new generative LLM technology and how it differs from what has come before it. At the same time, we were already thinking about how to leverage this in workflows and legal tech products for our firms and clients.

We also tend to forget that AI has been part of the legal tech scene for the past four plus years, either in document review or as part of bespoke solutions designed to extract and process data to automate workflows around management of high document volumes (for example as part of mass claim proceedings). The expectations for the accuracy and capabilities of AI in these solutions were very high, often disproportionately so. This led to solutions being quickly dismissed or ending up as part of a legal tech portfolio but rarely used by many law firms.

A new era of AI or back to backup plans?

I am ever the optimist when it comes to legal tech, change and adoption. This helps, as, to be frank, the legal tech journey is often slow and sometimes bumpy. This challenge together with impressive and inspiring colleagues in this domain keep me going and highly motivated. I genuinely think that we are at a turning point and that based on current technological developments and the adoption of AI in so many other domains, true innovation in law firms is a matter of when and not if.

But, a sceptic might say, what happens if the challenges of AI outweigh the opportunities and advantages? In our industry we always like to have a backup plan. We also tend to be risk averse, especially with regards to technology. So what happens if AI does not reshape the legal industry as quickly as some might think or hope? Well, if that is the case, I guess it's safe to say that it will remain a momentum driver as it has been so far in 2023 and for all the projects that just kickstarted this year. It will also be a substantial multiplicator factor for other technologies used in legal tech that will become more accessible and relevant for reshaping current workflows and the way we offer legal advice.

So, to sum up, these are some of my predictions for 2024:

• We will need to spend a lot of time training our colleagues to understand the capabilities and limitations of new LLM models.
• The momentum in legal tech and innovation will continue and will be leveraged to drive other initiatives besides AI. We will see a constant push in areas like document automation, as well as improvement and innovation related to many critical workflows like document review, contract lifecycle management, know-how management and so on.
• Data will start to play a different role for our clients and in law firms. We will see several trends and initiatives aimed at cleaning up our DMS and preparing relevant data for AI use cases and workflows.
• We will potentially see a trend in leveraging existing solutions and capabilities, for example Microsoft Azure and Power Apps/Automate. For legal tech and digitalisation teams in law firms it will be a challenge but also an exciting journey to find a balance between multiple key streams:
  • keeping track of meaningful AI developments and new products;
  • focusing on existing products that are part of the portfolio and are gaining new features as vendors are deploying AI within their solutions;
  • investing time in training and adopting initiatives to make sure everyone is prepared for the incoming change.https://henchman.io/legal-tech-trends-2024
• Finally, I think we will see a shift in legal services, with technology starting to play a more important role as part of the solution for legal issues that involve increasingly higher volumes of structured data or as part of legal service delivery to streamline workflows and increase collaboration. Law firms are developing more capabilities in advising clients on not just legal matters but also related legal tech and implementation projects. AI will surely be at the forefront of this, but we are seeing more and more clients and their in-house departments reaching out to us for insight and support related to any kind of legal tech and digitalisation projects.

The article was published as part of The 2024 Legal Tech Trends Report.