‘We finally have the tools to harness and scale law firm knowledge’

By combining legal expertise and generative AI (Gen AI) technology, legal professionals are benefiting from firm-wide knowledge like never before, a webinar hosted by The Global Legal Post heard.

The webinar – The future of legal drafting: How people and AI can unleash the power of firm knowledge – explored how Gen AI is helping to amplify the impact of law firm knowledge by making it easier to apply to the drafting process.

Chaired by InterAlia Consulting founder Andrea Miskolczi, the webinar, which was sponsored by LexisNexis, featured representatives from three leading European law firms: Gleiss Lutz, Hengeler Mueller and Pérez-Llorca.

To download a copy of The future of legal drafting: How people and AI can unleash the power of firm knowledge, published in association with LexisNexis, click here.

The panellists explored how Gen AI is effectively democratising access to the type of knowledge management capabilities that were previously only available to big firms with large knowledge management departments.

“This has changed a little bit with the power of Gen AI, because it also gives smaller entities, or even individual lawyers, the ability to create something in scenarios where you don’t need lots of personnel and elaborate processes to create your own templates,” said Pierre Zickert, legal technology manager at Hengeler Mueller.

Gen AI technology is also widening the scope of the type of documents that can be automated, including high-level contract drafting such as share purchase agreements, said Sebastien Bardou, general manager of LexisNexis Northern and Southern Europe and vice president of strategy for CEMEA.

This is a step change from previous iterations of AI technology.

“Generative AI introduced something that is qualitatively different: the ability to reason and draft in context,” said Sara Molina, a partner in the legaltech and digital transformation practice at Pérez-Llorca. “We are no longer just automating the assembly of standard clauses. We are starting to explore how AI can support lawyers in handling the nuances of situations, such as a complex cross-border transaction where historically you could only rely on your most experienced people.”

In this new world, a firm’s knowledge assets become even more valuable. To start with, firm-wide know-how can be used as a frame of reference for lawyers to verify Gen AI outputs. This is important because while Gen AI might be able to draft agreements effectively, it could include regional biases or it might not be up to date with the most recent case law, said Moritz Krause, legal technology manager at Gleiss Lutz.

Uploading a firm’s own documents or precedents into legal AI tools can also ensure drafting is tailored not just to the matter but to the firm or individual lawyer.

“Not everything that you work on has to come from exactly the same matter,” said Krause. “With prompting, you are able to tell the system you’re using these four documents from my current case, and the fifth one [unrelated to the current matter] is how I usually draft memos.”

Elevating drafting capabilities

By using Gen AI tools that enable firms to combine internal knowledge with external legal data sources, legal professionals can therefore elevate their drafting capabilities.

To be sure, firms need to be cautious about where they upload and store their knowledge, because it’s a competitive asset, said Bardou. This means carrying out sufficient due diligence when selecting Gen AI tools for legal work.

“You don’t want to use that in any free version of a legal AI or without very strong guarantees in terms of data privacy and data protection to make sure that you’re not losing anything in the process and that you’re not training the foundational model,” he added.

For Miskolczi, knowledge management is one of the most important enablers of using Gen AI, especially for legal drafting. In her consultancy role, she noted that many law firms are now realising just how important knowledge management is if they want to advance their AI journeys.

Molina agreed, addressing misconceptions that a firm’s knowledge assets become less important in a world of increased AI use.

“Generative AI does not replace legal knowledge, it amplifies the value of well-structured, trusted knowledge models,” she said. “Without high-quality content, precedent templates and playbooks, you just get generic language, and that is not of value for the client. So in practice, knowledge management becomes even more strategic than ever, and templates and precedents are no longer just static documents, they become training material and grounding sources for AI assistants.”

Miskolczi noted that while data is often referred to as the new oil, for legal professionals, harnessing the power of knowledge is the new oil. Molina elaborated further.

“While knowledge has always been the core of the business, what is changing is not that knowledge suddenly becomes valuable, we finally have the tools to harness and scale it,” said Molina. “And so to play on the analogy, in law knowledge was always the oil – Gen AI is the refinery.”

Work quality

The adoption of Gen AI is also coming against a backdrop where lawyers are under pressure to be more efficient. While there is often a focus on the productivity gains that Gen AI creates (which in turn can drive revenue growth by freeing up more lawyer capacity), firms that are further advanced on their AI journeys are thinking more about work quality and reducing write-offs, said Bardou.

“Those write-offs are killing margin, and they’re not creating a great environment for people, because you don’t want to work on something that’s a waste of time,” he said. “So AI is not only creating incremental revenue, but also suppressing those write-offs, which is creating more margin so therefore more profitability and more comfort for people in terms of quality of life at work.”

This focus on work quality underscores that Gen AI adoption is not just about cost-cutting; it is also about giving lawyers the tools to do their jobs more effectively.

“As a young lawyer, you always have the feeling you’re too slow, and you’re always encouraged to be a bit faster,” said Zickert. “This is actually also the driving force for us to provide our lawyers with the best tools so they don’t get the feeling that because of some old tech, they need to work longer hours or they’re underperforming.”

Miskolczi said that another frequent issue that comes up in the course of her consultancy work is concerns about training juniors in a world of increased Gen AI use, in particular how those juniors will learn to draft. For Zickert, this is not a problem – technology just transforms the way firms can train lawyers.

“I only see advantages,” said Zicket. “The young associates can focus more on the content. They can do more research. They can learn more on a senior level.”

Some of these concerns tread familiar ground. Krause recalls an oft-repeated anecdote about similar fears about how junior lawyers would learn their craft when the concept of knowledge management was first introduced. However, law firms must ensure their juniors continue to learn the skills they need to do their jobs as the technological backdrop increasingly changes what future lawyer work might look like.

“What can be done is to adapt internal training curriculums,” said Krause. “We definitely see a benefit in prompt workshops. It’s about making junior colleagues feel like you’re doing something to address this skill set that they will need in the course of their work life, that is important and something that we do.”

The Global Legal Post has teamed up with LexisNexis to help inform readers’ decision-making process in the selection of a Gen AI legal research solution.

Click here to download the report, The future of legal drafting: How people and AI can unleash the power of firm knowledge, and here to visit the Generative AI Legal Research Hub.