If Andreessen Horowitz is right and software is eating the world, then why should the legal industry be any different? Let’s take a look at legal automation.
This page explores how automation has impacted the legal industry, in various different settings. Use the menu below to navigate this resource and find out what legal automation is, who does it, what the benefits are, and some practical examples to get started.
What is legal automation?
Legal automation is the use of software to automate the manual or routine tasks that lawyers carry out in the course of their role.
The lawyer’s role can be seen as a mixture of advice - applying their knowledge and judgement to a given scenario - and of process, taking on the routine tasks (often around paperwork) that are necessary to fulfil legal requirements in a robust and compliant way.
Legal automation is aimed mainly at the process part of a lawyer’s job. Nobody works incredibly hard and pays hundreds of thousands of dollars to get through law school to find themselves copying and pasting text hundreds of times, or printing off PDFs to be signed and scanned.
Legal automation exists to free up lawyers’ time from low-value process work and enable them to focus on more important tasks. This means different things in different settings; for lawyers in law firms, it might mean automating the document review process required for due diligence, to avoid associates having to manually search through emails.
For in-house lawyers, it might mean automating the creation of routine contracts by using an automated workflow with contract templates.
While process automation isn’t new, in the context of a legal profession largely unchanged since the advent of email and word processing, the adoption of automated solutions is still in its infancy for lawyers.
Legal automation exists to free up lawyers’ time from low-value process work and enable them to focus on more important tasks
The legal technology sector is growing all the time, with new market entrants disrupting traditional processes constantly. The categories of legal process work that have been addressed by technology in recent years include, but aren’t limited to:
Electronic signature of contracts
The advent of secured, universally recognized electronic signature has led to ubiquitous digital agreement, much of which can be automated.
Low-complexity legal agreements are ripe for automation, with lean legal teams frequently choosing to deploy contract automation workflows rather than scale expensive headcount.
Legal teams that are stuck with thousands of PDF or Word contracts, containing unstructured data, often turn to AI contract review providers to find out what's in their contracts. This does solve a problem in the short term, but long-term it would of course be better to stop creating unstructured PDFs.
No-code automation builders help legal teams and law firms to stitch together various manual processes to help make common workflows scalable. This might be something like the intake and triage of new queries, helping to assign legal matters their right level of priority.
Automated billing management
Controlling spend on outside counsel is a key objective for many in-house legal teams. Various new providers offer automated solutions to help monitor and drive down costs.
Automated risk and compliance management
Various solutions exist to monitor and control the risk and compliance exposure of a company, particularly in highly regulated industries like fintech.
While knowledge management (KM), both for law firms and for in-house legal teams, is a fairly mature product category, the influence of automation has expanded - making it faster and more efficient for knowhow and precedents to get to the right people at the right time.
Post-signature contract management, particularly addressing contract renewal, can be a serious issue both for large and scaling businesses. Automating this process is a great way to save time and reduce risk.
… however, this is an incomplete list as new providers spring up all the time. Find out more by checking out this curated list of legal tech tools.
Who is responsible for legal automation?
The main driver for legal automation is often to increase productivity, and make sure that expensive resources, like law firm partners or in-house general counsel, don’t spend their time on low-value work that doesn’t require their skill level.
However, this can create a mismatch where those hoping to benefit from the automated process aren’t actually responsible for the implementation of an automated solution. A partner heading up a practice area for a Magic Circle law firm is unlikely to be actually setting up the contract templates she hopes will free up time for her team.
Law firms often have legal innovation teams who are visible at industry events, and early adopters when it comes to trying and buying new software. But actually achieving adoption at scale within a hierarchical environment like a law firm is a different story.
Similarly, in an in-house legal department, adoption of automation hasn’t always been easy for GCs if they need support from developers or IT to actually make it happen. Legal is usually pretty low on the priority list for IT projects - particularly at high-growth tech companies, where the product and the sales team tend to be the priorities.
This picture has changed in recent years with the rise of legal operations as a key function when it comes to productivity in in-house legal. Legal operations managers exist to run the legal function more like a commercial business unit, addressing inefficient processes and focusing on maximizing productivity. Automation is often a fundamental part of that picture.
However, a legal team doesn’t need to have a dedicated legal ops professional to get started with legal automation. The advent of no-code solutions, like Juro's no-code editor and contract workflow, means that lean legal teams can set up an automated process for routine contracts in days, not weeks or months.
Get in touch to find out more about contract automation.
What are the benefits of legal automation?
The main benefit of legal automation is an increase in productivity and a significant time saving. This can have several obvious benefits, depending on what the lawyers in question choose to do with the time they win back:
- More time for high-value work: without needed to spend hours on admin and paperwork, lawyers have more time to do the strategic, commercial work they trained for
- Less duplication of work: once a process is codified an automated, it’s off a lawyer’s plate for good. No need (for example) to draft up the same NDA day after day - once it’s automated, it can be generated instantly from a template
- Better client experience: if low-value work is automated then those cost savings can be passed on the the client (whether internal or external) in some way, giving them a better experience dealing with legal
- Access to data: heavily manual processes, like manual due diligence reviews, or signing with a wet signature, usually capture no data - making it hard to learn from the process, or to integrate it with something else (like sales software). Automated processes can capture data, enabling better workflows and also analytics
- Do more with less: automating a process like contract creation can mean a team can avoiding needing to hire additional headcount. This allows legal’s support to the business to scale, even if its team doesn’t.
These benefits are encouraging more and more lawyers to consider legal automation for their team.
Example: Legal document automation for NDAs
Non-disclosure agreements (NDAs) are some of the most common contracts in the world and can be a real headache for small legal teams. This contract often receives low or no negotiation and doesn’t create much risk, but in-house legal teams still find themselves deluged in requests for NDAs, digging out the latest version in a Word document or correcting the copy and paste mistakes that their colleagues have made.
Click above to see an automated NDA in Juro.
This is why NDAs are often one of the first workstreams considered for legal automation. In an automated workflow for NDAs, the steps are as follows:
- The legal team creates the master template for the NDA. This templated document represents the current best version of the legal team’s thinking when it comes to the contract terms. The template lives in a contract automation platform hosted in the cloud.
- Users - meaning, colleagues around the business - are empowered to create new NDAs by self-serving them from the template. They do this by answering a series of natural language questions, in-browser, to generate a compliant NDA that has been populated with certain new key fields (like effective date, counterparty name, and so on).
- They can collaborate on this document internally, in-browser, with colleagues. This eliminates the issue of version control.
- They can negotiate the document externally, in-browser, with the counterparty. This means there’s a full digital audit trail of who changes what and why, rather than there being no negotiation data captured (as is the case with a manual solution like a PDF or Word document).
- The counterparty can electronically sign the document, securely, on any device.
- The fully signed document is emailed to everyone concerned, and stored securely, with its rich metadata ensuring it can be searched easily for future reference.
With an automated workflow like this, the legal team needs only to invest the time up front to set up the template, plus any control measures like an approval workflow, and then they are free to focus on other tasks. Colleagues can self-serve the dozens or hundreds of NDAs they might need in a year from this template, without needing to involve the legal team.
How do you get started with legal automation?
As with most process changes, the best way to get started with legal automation is to start small. Huge deployments of new technology that come out of nowhere have a high chance of failing.
It’s much better to choose a pilot scheme and work with a vendor to deliver value quickly against this small process improvement. If this works well, you can scale the approach and look to transform processes at scale, once you have buy-in from stakeholders involved in the pilot scheme.
Read more about this approach: ‘Contract automation: start small, win big’
Read more about legal technology
Legal automation has given rise to wholesale changes in some legal teams, and there are plenty of great resources out there if you’d like to know more about legal technology. Check them out below.
If you’re ready to get started with legal automation for contracts, hit the button below to get in touch.