LawGeex Survey Shows Legal Teams Struggle to Reach Success Without Technology
Artificial intelligence has changed the face of many industries globally. From banking and finance to automotive, marketing, and healthcare, AI is enabling greater efficiency in multiple use cases – and the legal sector is no different.
But where other industries have embraced AI and automation, lawyers across the industry still lag when it comes to the adoption of legal technology. While the legal profession has escaped the effects of low legal AI adoption so far, emerging research indicates that may no longer be the case.
As a recent survey of 89 corporate counsel by LawGeex shows, in-house legal teams are struggling to meet their contract review goals, and a lack of appropriate legal technology is central to these struggles.
Legal teams struggle to review contracts efficiently without technology
Corporate legal work is primarily about contracts. Negotiation, drafting, review, finalizing, renewal, and termination all fall within the competence of transactional attorneys and teams. Yet, in-house counsel frequently do not have the AI contract review tools and technical support they need to carry out these duties effectively.
According to a survey we conducted of in-house counsel across industries this spring, nearly half (47%) of corporate counsel feel they do not have the technology they need to succeed and believe that it’s due to their company’s unwillingness to invest in such technology or see the ROI for it. But, unfortunately, for the vast majority of in-house counsel, not having these tools also gets in the way of meeting their most significant challenges: improving legal efficiency, reducing legal risk, and reducing contract turnaround time.
Legal teams are inexorably spending longer hours carrying out rote contract review tasks manually without the necessary AI contract review software to make their work easier and faster. As a result, they are facing increased workloads, diminishing resources and are increasingly seen as a bottleneck by their colleagues in other functions. Unsurprisingly, more than half (53%) of in-house lawyers we surveyed admit that they are limited in success due to overwork.
The absence of these legal AI tools limits corporate attorneys’ success and leads to burnout, which can be deadly for organizational outcomes.
Overwork leads to burned-out attorneys
More than half of attorneys surveyed feel they cannot be successful because of their heavy workloads. While AI and automation-led tools would have provided a handy buffer, at least as it concerns routine and repeatable tasks such as contract review, the slow rate of adoption in the legal profession is a difficult barrier. “Most lawyers are drawn to practice law for really good reasons—mostly, to help people and to advance the rule of law. The drivers are there, but the culture that’s been created for lawyers can be relentless and can quickly lead to burnout. Feelings of exhaustion and cynicism about work, or starting to disconnect from work are common indicators of burnout. In more extreme cases, the impact of burnout leads to some of the highest depression, anxiety and substance abuse rates as an industry.” — Noory Bechor, LawGeex CEO “The legal industry remains inundated by work performed by humans that should be handled by technology… Automation may not be as sexy as other legal technologies, but the ability to transform how basic administrative work is done certainly is.” — Noory Bechor “Retention becomes a significant concern, which costs the legal industry roughly $9.1 billion annually for the turnover that it produces in just the 400 largest firms in the United States, not to mention the hidden costs of loss of institutional knowledge, continuity, team culture and customer dissatisfaction.
Our survey indicates that a lack of appetite for new technology and a lack of technology ROI are two of the main obstacles to success for legal teams, which is not doing attorney workloads any favors.
As LawGeex CEO and cofounder, Noory Bechor noted in a recent Thrive Global interview, the legal industry is known for long hours, high levels of stress and anxiety, and overwork. The practice of law really is “synonymous with 14-hour workdays, no weekends, and very little work/life balance,” says Bechor.
But not all the work in legal practice is cutting-edge, complex, or nuanced work. Up to 50% of a corporate counsel’s day is spent manually reviewing contracts, often routine, less important contracts like nondisclosure agreements or services agreements. Likely, few attorneys who dreamed of helping people and advancing the rule of law when they decided to go to law school longed to spend half their days focused on redlining boilerplate language.
Whether the contract is important or not, any mistake can open a company up to liability. The risk to a company of a burned-out attorney making a mistake is high. Organizations can hardly trust a weary and wrung-out attorney to be effective or thorough in their duties. As a result, burnout can also lead to damaging drops in efficiency, accuracy, and eventually, client outcomes.
Studies show that employee job satisfaction and engagement is linked to a host of organizational success factors, including lower turnover, high client satisfaction, and higher productivity and profitability. Lawyer wellbeing can contribute to organizational success – in law firms, corporations, and government entities.
In short, enhancing lawyer health and wellbeing by leveraging technology is not only doing the right thing, but it is good business and makes sound financial sense.” – Esther Dediashvili, Legal Solution Architect for LawGeex
When Legal can’t review contracts quickly enough, it impacts the entire business
Gartner found that Legal’s delay in reviewing contracts leads to a 1.3 times longer contract review cycle and extends the process of contracting with a third party by 32%. Longer review times result in organizations taking longer to finalize deals with potential clients and keep current deals ticking over. Every sales executive fears the risk introduced with delay of processing a contract encapsulated in the old adage, “Time kills all deals.”The bottom line is in today’s fast-paced digital world, organizations and lawyers alike can’t be successful without the use of technology. Those who embrace it will thrive.
Eventually Legal drag translates to reduced growth overall. For instance, Gartner found delays from Legal add 10% more time to new product launches, resulting in $7 million lost from delayed product launches. Delaying a product launch obviously can lead to delayed new contracting and lower retention rates, with business leaders reporting that inefficiencies in the contracting process slow down revenue recognition. Even a one-day slowdown in the sales cycle can impact revenue significantly, hitting the organization’s bottom line.Advanced technologies such as Contract Review Automation (CRA), which leverages artificial intelligence, can help lawyers review routine contracts in a faster, consistent, more cost-effective manner, without compromising quality.“Overall, it’s clear that organizations and their attorneys must implement a shift from manually reviewing contracts if Legal will begin to operate at the speed of business – and technology is obviously the key to that” — Noory Bechor
