Legal Tech News & Contract Management Tips | LexCheck Blog

What Is AI and How Can Law Firms Use It?

Written by Gary Sangha | Founder & CEO | Aug 26, 2024 5:52:30 PM

Artificial intelligence (AI) enables technology to mimic human intelligence. As you know, AI software can perform routine tasks, solve problems, and be used across many industries. Lawyers can utilize artificial intelligence to automate some of their most time-consuming responsibilities. 

Working in the legal industry is no easy feat. Being able to expedite the contract review process, for instance, can free up an attorney’s capacity significantly — freeing up room in their schedule to connect with and provide legal services to current and prospective clients. 

What Is Artificial Intelligence (AI)? 

While you already know the basics, it’s important to begin with a solid foundation for the use of AI in the legal field. 

Artificial intelligence is a type of software that gives machines the ability to imitate humans. The software can be programmed to perform repetitive tasks and troubleshoot certain issues. Plus, machine learning enables machines to learn and adapt without human aid

This allows businesses to put certain tasks on autopilot. The more information an AI software is fed, the less help it needs to decipher and act on it in the future. 

How Does AI Work? 

AI technology is designed to make executing everyday tasks easier. When the system is given a set of instructions, it will scan the data for patterns, using those findings to inform what next steps should be. 

  • Input stage: During the input stage, data is sourced and fed to the system in preparation for processing. 
  • Processing stage: This is the decision-making stage. Here, the AI will sort all data provided, and work to spot patterns similar to the ones it was programmed to identify.
  • Outcome stage: Once a pattern is identified, the artificial intelligence software can use this information to predict certain behavioral outcomes and changes in market trends.
  • Adjustment stage: The system is trained to determine whether each piece of data it comes across is passing or failing. To be considered passing, it must match previously identified patterns. Otherwise, AI will flag it as a failure, and repeat the previous steps again to achieve new results. 
  • Assessment stage: The final phase of executing a task is the assessment stage. The AI-powered system combines all of the data it has gathered so far to generate insights that will help inform future predictions. These insights are stored within the algorithm for easy reference.

It is important to note that if the information fed into the AI system contains any errors, the software will not be able to correct them (unless it has been programmed to do so) — it can only act based upon what it is told. In short, AI cannot know what it isn’t told to know. 

What Are the Benefits of AI in Law?

Businesses often use AI tools in their day-to-day to help promote seamless workflows. Not only can AI systems process high volumes of data in less time, but they can also enhance the consumer experience. 

Use Cases

AI can be used by legal professionals and a variety of others across several different industries. There is a decent amount of new technology being created in the AI space and many companies are taking advantage. 

Here are a few instances of the use of AI in the legal world.

  • Identify legal precedents and statutes
  • Provide information on relevant case law 
  • Summarize case law that can be used to support legal arguments 
  • Provide information on the latest trends and developments going on in the legal industry

It is important to keep in mind that the usage of AI technology must be in line with data privacy laws as well those concerning data protection. Additionally, AI, despite its unique abilities, will still require some level of human review to ensure the system is accurately executing its assigned task(s).

Applicable Areas

There are many areas of businesses where AI can be applicable. Lawyers, for example, can use AI tools like LexCheck to perform contract analysis or a routine legal document review. Other industry professionals can also put this technology to good use. 

AI-powered contract review software can evaluate every contract and catch deviations from your preferred positions in seconds. For instance, LexCheck identifies potentially problematic contract language and explains why it requires attention. 

Large Language Model-powered playbooks are trained on the most common provisions and are ready to use on virtually every contract type. This level of automation allows for contract review in significantly less time than doing so manually. This frees up the legal team's time for more in-depth work and client relations.

How Can Law Firms Use AI?

Firms can use AI to perform legal research on precedents and review contracts ahead of execution. With the more tedious aspects of the profession being outsourced in this way, errors and inconsistencies can be spotted more quickly and addressed ahead of execution — getting all parties involved to the signing phase faster. 

AI, like LexCheck, can also help firms minimize legal risk(s) by identifying the likelihood of said risk(s) and developing solutions to prevent them from arising. The software can do this by analyzing the data in its system and highlighting negative patterns. AI algorithms can store all insights for later reference to help inform future evaluations. 

Types of Artificial Intelligence (AI) 

There are seven types of artificial intelligence divided into two main categories: Type one (based on capabilities) and type two (based on functionality). 

Capabilities

  1. Narrow AI: Narrow AI, also referred to as weak AI, is designed to execute a specific task or limited set of tasks. Narrow AI can do what is asked but with restrictions, depending on what the system was trained to do. Siri, for example, can tell a user when the next flight to North Carolina is by pulling up a flight list via their internet browser. It cannot, however, book their airline ticket.

  2. General AI: Also known as strong AI, general AI systems can mimic human intelligence and perform routine tasks. Using natural language processing (NLP), this software type can comprehend instructions, learn over time, and apply what it has learned when completing any tasks assigned to it, similar to how a person would.

  3. Super AI: This AI type would be far more intelligent than any human. Large language models like ChatGPT are as close as generative AI has gotten to accomplishing this. Researchers and engineers continue to test the limits of AI each day. If made a reality, super AI could have feelings, wants, needs, desires, and a belief system of its own — the free will humans possess.

Functionality

  1. Reactive machines: Developed by IBM, reactive machines are designed to function under very limited capabilities. They cannot store memories or learn from past experiences and develop their understanding over time. Reactive machines can only address what is happening in the moment. A good example of a generative AI tool that would be classified as reactive is Nextflix’s search engine feature.

  2. Limited memory machines: Limited memory machines are a type of machine learning model that uses external memory to store key data as it learns new information. Limited memory AI can draw from past experiences to make smarter decisions in the present, observe situations over time and learn from them, make predictions based on trends, and more. 

  3. Theory of mind: This AI type would be well-versed in decision-making. While there are some cutting-edge developments that are able to mimic human capabilities, none are fully capable of acting as a human would in every circumstance.

  4. Self-awareness: This tier of AI technology would be for machines that have human consciousness. There is no type of artificial intelligence that is conscious like a human, but the concept is often portrayed in the media for entertainment. Realistically, however, developers are far from accomplishing this. 

What AI Cannot Do 

While there are many positives that come with this software, such as the ability to use legal AI tools to review contracts, help maintain regulatory compliance, or to aid in e-discovery ahead of court proceedings, AI comes with limitations as well. 

Here are a few that are important to keep in mind. 

  • AI cannot pull context from lived experiences. Legal professionals typically have various unique experiences they can reflect on and pull insight from. AI can condense significant amounts of regulatory data, but may struggle to understand more nuanced information.
  • AI doesn’t have morals. Machines do not possess the ability to differentiate between what is moral or immoral, ethical or unethical. They can only evaluate patterns and provide potential solutions. 
  • AI will treat data inputs as law. If AI-powered software is trained on incorrect or incomplete data, the software’s outputs will also be incorrect or incomplete. AI tools cannot make up for human error.

Despite some limitations, the benefits of AI are plentiful and its capabilities are expanding day by day. AI for lawyers and legal teams with LexCheck looks like expedited review processes, easy Microsoft integration for seamless implementation, and more. 

Final Thoughts

LexCheck is changing how businesses approach contract negotiations, giving law firms and other organizations a leg up in an industry that can be quite competitive. Our AI technology helps limit legal risks and expedite business growth by tackling tedious tasks with ease and accuracy — enabling customers to put more focus toward other important aspects of their business. 

Sources:

Understanding Machine Learning | Investopedia

Natural Language Processing | Coursera

Ethics and Morality | Psychology Today

What Is Artificial Intelligence (AI)? | Investopedia

General Data Protection Regulation (GDPR) | Investopedia