While studies show nearly all in-house legal practitioners are using AI in some way and that legaltech budgets are expanding, few are seeing value generation flowing from this increased investment, according to Amazon’s associate general counsel Kathy Sheehan.
“The adoption and use numbers look great, but where are the savings?” said Sheehan, during her keynote address at the LegalTechTalk conference in London on 17 June about Amazon’s legal AI journey. “Where’s the transformation? That’s the real conversation that we need to be having. We’re still waiting for the value creation.”
Sheehan said she expected to see that value creation manifest through increased productivity and lower costs, though in-house counsel are seeing no noticeable savings from their outside counsels’ AI use.
“That should raise some questions,” said Sheehan.
Part of the issue is that fewer than a quarter of law firms have an AI strategy that is visible to their clients, said Sheehan, suggesting that firms are not working closely with their clients on AI adoption.
“If clients don’t even know what their strategy is, then they’re certainly not partnering with their clients, and that is something that needs to change,” she said.
For Sheehan, this means more strategic thinking is necessary, not just about what AI tools to buy, but how to empower lawyers and firms to differentiate themselves and work together with in-house legal teams to transform the practice of law.
“It’s about strategically thinking about what the opportunities are that exist to drive productivity on both sides of the lawyer-client relationship, and the best way to do that is with even more and better collaboration,” she said.
Sheehan said Amazon’s legal department had put in place “some very aggressive goals” to drive its transformation efforts by attacking AI adoption.
“There is as much about how you transform an organisation by bending hearts and minds, empowering people and building and refining your processes, as there is about technology adoption,” said Sheehan. “Technology adoption is also important… [but] first, you have to define and refine your existing processes.”
This means that if in-house teams or law firm lawyers are struggling to get funding or buy-in from executives on AI spending, that shouldn’t slow ambitions down – the first step is always understanding what it is you want to transform, and that can be done without any AI investment.
The main lesson from Amazon’s legal AI journey, however, is that lawyers themselves must be given the encouragement to engage with change efforts directly.
“The most successful AI transformations strike a balance between empowering individuals to experiment by fostering a culture of development and grassroots innovation, while simultaneously investing in centralised enterprise-grade solutions,” said Sheehan.
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