AI Enhances Customized Features in Legal Technology

Law firms are increasingly utilizing large language models (LLMs) to analyze extensive documentation, capitalizing on the advanced capabilities these technologies provide. As these AI systems evolve, some firms are opting to develop their own customized tools rather than relying solely on third-party solutions.

For years, lawyers have leveraged technology to assist with data analysis in their practices. However, the emergence of generative artificial intelligence (AI) has opened new pathways for firms to train LLMs specifically using litigation files and other legal documents.

LLMs are sophisticated AI systems that can understand and generate human language by analyzing massive datasets, thus transforming the operations within the legal industry.

In-House Development of AI Tools

As more law firms become adept with this technology, which supports popular applications like ChatGPT, a few are taking the initiative to code and implement LLMs in-house. This shift raises questions regarding the traditional business models employed by existing legal technology providers.

A notable example is Irell & Manella, a firm specializing in patent litigation. Instead of relying on an external tech provider, they assigned their in-house developer, Thomas Barr, to create their own AI-driven tool designed to analyze patents and other relevant documents.

The custom software, known as the Irell Programmable Patent Platform (IP3), initially utilized proprietary algorithms to access a vast database. The firm began incorporating AI into the platform, enhancing its capabilities.

By developing IP3 internally, Barr ensures the confidentiality and security of the patent data utilized by the system. Additionally, he notes that it can be more swiftly adjusted to fit client requirements compared to a third-party solution.

Barr argues that traditional legal tech providers often fall short in addressing the needs of law firms because they lack direct interaction with clients. Lawyers at Irell understand their clients’ challenges better, which positions them to create effective tools to meet those needs.

Irell has been gathering data from the US Patent and Trademark Office and using its custom programming to enhance the platform long before the introduction of ChatGPT. Thanks to advancements in large language models, the firm can now enhance the platform to facilitate open-ended questions from attorneys during litigation.

According to Amy Proctor, a partner at Irell, the firm’s lawyers can now answer extremely complex inquiries and produce reports with unprecedented precision. She notes that the integration of their database with cutting-edge AI capabilities has impressed many.

Leveraging Third-Party AI Solutions

While some firms are innovating by developing their own AI solutions, others are tapping into the resources provided by third-party legal tech vendors to apply generative AI to their datasets.

For instance, McDermott Will & Emery, a top firm in US healthcare law, has analyzed data from over 750 private equity healthcare deals negotiated by its attorneys, utilizing an AI model licensed from the legal tech company eBrevia.

McDermott worked with eBrevia to customize the AI model for healthcare market analysis. The firm used its proprietary data to further train the model, enhancing its ability to provide valuable insights.

This new capability enables McDermott to generate market analysis reports available on its intranet, which aids lawyers at the start of each new deal. These reports are invaluable references for drafting letters of intent, as they draw from previous deals to establish accepted terms. Moreover, the firm shares these reports with clients to clarify the rationale behind the provisions in a deal.

According to Hunter Sharp, a partner at McDermott, this initiative has significantly sharpened the firm’s competitive edge, allowing them to offer clients insights derived from data that many competitors cannot replicate.

Future of Legal Technology

Although McDermott plans to continue utilizing third-party legal tech providers, its Chief Knowledge Officer, Hunter Jackson, sees potential for further advancements with large language models as they become more precise.

The increasing adoption of generative AI has the potential to disrupt existing legal tech providers, with some possibly going out of business, as noted by Gabe Teninbaum, an assistant dean specializing in legal technology at Suffolk University Law School. For years, large law firms have been building strategies based on big data. Now, rather than employing data scientists for analysis, lawyers can simply upload spreadsheets to generate insights with AI.

While numerous legal tech companies are embracing the latest advancements in AI, they may still fall short if their models aren't properly tailored to specific legal data, as Teninbaum points out. They can adapt by modifying their technology or pivoting their business models.

Kriti Sharma, the legal tech Chief Product Officer at Thomson Reuters, views these developments as opportunities for innovation rather than threats. She anticipates that the custom solutions developed by law firms on top of Thomson Reuters' tools may yield exciting advancements.

Sharma’s team is actively looking for ways to enrich their offerings to law firms. Recently, Thomson Reuters acquired the legal tech firm Casetext, creator of the CoCounsel software. She believes in collaborating with law firms to build on AI and data solutions instead of viewing them as adversaries. Sharma states, "I can’t imagine a world where we could revert to a structure where tech providers work separately from law firms."

In conclusion, the integration of AI into the legal sector allows firms to develop tailored solutions that are better suited to meet client demands. As technology continues to advance, the collaboration between legal professionals and tech providers is likely to shape the future landscape of law practice.

AI, law, innovation, technology, data