Our visit to this year’s Legal Revolution in Nuremberg prompted us to once again reflect on the status of Legal Tech. It concerns new technologies, user acceptance, hype, and cycles. Trends are known to come in cycles; this applies not only to fashion and music but also to technologies and methods. Even when it comes to Legal Operations and Legal Tech, there are hype cycles and developments that occur in waves.
Artificial intelligence in the legal market: a new hype?
The current hype topic is Artificial Intelligence. The term Artificial Intelligence has existed since the 1950s, and for decades, interest in this subject has been marked by great hypes followed by “AI winters.” We are currently at the (likely) peak of another hype cycle. These are typically triggered by technological breakthroughs, this time by the development and release of Large Language Models, which have been particularly trained for conversation and text generation. ChatGPT was made publicly available in November 2022 and is rightly referred to as the iPhone moment in the field of Artificial Intelligence.
The legal industry was (once again) quickly at the center of this development. The reason is that the application possibilities in this text- and language-intensive industry are diverse. Just like in the last major Legal AI hype wave around 2017-2019, there is much imaginative speculation about where the legal industry will be in three years, who should be most concerned, and what will be possible. It is indeed impressive to use and test this technology. It will have a tremendous impact on the legal industry in the medium to long term. As it was about seven years ago, there were many presentations on Artificial Intelligence at the Legal Revolution in Nuremberg (and at other conferences this year) that remained quite abstract. Some of the considerations and predictions from back then would still be relevant today. At the same time, much is being promised again, not only by startups; even major technology providers are raising high expectations with their use cases. These are not always met and often leave users disappointed. This is how the previous hype also subsided.
Concrete application and practical benefits
However, there is a crucial difference this time. While this observation applied not only to Artificial Intelligence but to Legal Tech overall a few years ago, the industry has now made significant progress in terms of digitization and transformation. This was particularly evident in the numerous conversations at the trade fair, which focused on the specific application of Legal Tech, AI, and digitization to enable better processes and more effective work in legal departments. Many conversation partners had concrete ideas and requirements, especially regarding contract management and automation. There was great interest from legal departments in using existing and already implemented platforms and applications like Microsoft 365. This is precisely the approach we follow with LEDOX365 for contract management. For us, the focus is also on the tangible added value through the digital accompaniment of the contract lifecycle, user-friendly operation, and effective workflows. Of course, this includes the use of Artificial Intelligence – where it adds value.
Professionalisation and sustainable development
The event was not only attended by heads of legal departments and general counsel; many legal departments now have specialists or departments for legal operations. The topics of digitalisation and transformation are thus being addressed in a sustainable and consistent manner. This is the decisive difference since the last hype wave. In addition to the excited and sometimes anxious look into the future, the focus is now very specifically on practical application, processes and implementation. That gives us hope!