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We explore why in-house teams are increasingly expecting external counsel to take advantage of AI

According to the recent UU����ֱ�� report, Generative AI and the future of the legal profession, nearly half (49%) of in-house counsel will expect their law firms to use generative artificial intelligence (AI) in the next 12 months. External counsel of the future will need to employ generative AI, or they risk falling behind competition or failing to meet the expectations of in-house teams.

Expecting other organisations to use AI – an expectation that has spread to every sector of the economy – will play a significant role in the future relationship of in-house teams and external counsel. With that in mind, we discuss why in-house teams are increasingly expecting external counsel and third parties to use AI. We also explore how in-house teams can take advantage of the tech internally.

How AI has become a necessity

Generative AI was once a luxury, a novel form of tech that law firms desired. But, as its use grows in every sector of the economy, AI has become a necessity. The benefits are substantial, which means any team, any department, any organisation that fails to take advantage of the tech may fall behind.

Generative AI platforms have quickly become household names. They serve myriad purposes, such as generating text (ChatGPT, Jasper, etc), images (DeepAI, DALL·E 2, etc), audio (Soundraw, Jukebox, etc), video (Synthesia, Pictory, etc), and so much more. And generative AI tools, , have been specifically created to improve elements of legal work and work vital to in-house teams.

The application of generative AI in the legal sector takes various forms. Generative AI helps lawyers to draft and monitor contracts, support research, summarise complex information, draft memos and briefs, perform due diligence, analyse data, ideate and brainstorm, and so much more. The overall include massive cost and time reductions, efficient automation, boosted productivity across teams and organisations, improved employee morale, streamlined processes, and so much more.

Read: How to manage the risks of artificial intelligence in your business

It is thus no surprise that firms expect external counsel to use the tech. They want them to take advantage of all that generative AI offers and to pass the benefits to in-house teams. And that expectation to use the latest tech is pretty standard. After all, the use of email was not an . Indeed, videoconferencing has only become an expectation in recent years – and some organisations are still reluctant, often to the frustration of their clients and partners.

In short, organisations tend to expect third parties to make the most of the latest tech, particularly tech that is widely used and clearly beneficial. Isabel Parker, partner of , echoes that sentiment in the UU����ֱ�� report, saying in-house teams should expect external counsel to leverage the latest tech: ‘Corporate legal departments should be challenging their service providers on their use of AI and on the benefits that they will receive as a result.’

In-house teams can encourage external counsel to use tech in various ways. Companies can include an AI policy on their website or send one directly to potential law firms, showing that the company welcomes and supports the responsible and mindful use of generative AI. Or in-house teams could take a less formal approach, ensuring generative AI features in early conversations, asking firms for specific details of use cases, the platforms with which they engage, and any other areas of importance.

How firms can use AI internally

So in-house teams should push external counsel to use generative AI. Andy Cooke, General Counsel at TravelPerk, agrees that AI will change the in-house and external counsel relationship. ‘“Everything on demand” is the client expectation today. AI facilitates that standard; firms who continue to try to meet it only with humans will be too slow.’ Lawyers across the sector, Cooke suggests, will depend on generative AI for generic queries and everyday tasks, as cost-effective subscription services can meet their needs. One significant consequence of that: in-house teams can rely less on external counsel.

In-house teams should look at AI platforms, , to consider how they might use the tech to minimise external spend. Consider, for example, that generative AI can reduce time spent on myriad daily tasks of the in-house lawyer. Legal research becomes much quicker, as does contract management, data analysis, brief and memo writing, and so on. Those efficiencies free up time, allowing in-house lawyers to focus on tasks that they otherwise may have given to external counsel.

The are clear: generative AI will save them time and money. It allows them to rely on more predictable workers, salaried workers, workers who will not bill extra hours, or assign low-level tasks to senior employees, or submit strange expenses. It also means they can rely on external counsel for specific needs, needs that in-house lawyers may struggle to meet. Outsourcing specialised legal matters still makes fiscal sense and ensures maximised return on investment.Precedent: AI policy - short form

So, in conclusion, in-house teams should expect external counsel to use generative AI, to pass the benefits onto the client, to maximise the potential of the new tech. And in-house teams themselves should adopt the tech, automating low-value and low-volume legal tasks, freeing up time and space to focus on valuable tasks, and still relying on external counsel for high-value and specialist work.