Some company lawyers have decided it is a good idea to turn into an expert in mastering the use of generative artificial intelligence
“Game-changer” : in-house legal departments around the world are exploring the risks and opportunities of generative AI
2 July 2024 (Paris, France) — At the legal tech conference in Amsterdam last week it was all AI AI AI AI AI AI AI AI AI AI AI AI AI …
Last year, as ChatGPT and other generative artificial intelligence chatbots were taking the world by storm, ASML – the Netherlands-based maker of chipmaking equipment – saw scope for hiring a “prompt engineer” to deploy the technology in its in-house legal department.
In a post on LinkedIn, ASML’s deputy general counsel, Douwe Groenevelt, said he envisioned “a new potential role that could bridge the gap between AI and our legal team”. The position called for a candidate (who had to be a lawyer) who could write generative AI prompts – the queries that must be fed into an AI tool to generate the desired output – and could train up colleagues.
The only catch: the job didn’t exist.
As Groenevelt has since explained, the intention behind that post, which attracted more than 1,200 likes and around 130 comments, was to contribute to the discussion about the future of legal roles in the age of generative AI.
Fast forward to this month, though, and the job has become a reality. ASML announced a genuine vacancy in its in-house legal department for a first-of-its-kind legal prompt engineer. It has concluded that, with the rapid development of AI tools, a dedicated role is warranted.
And the creation of this role is an indication of how the in-house legal profession is transforming itself to take advantage of generative AI, as companies around the world explore the risks and opportunities the technology presents.
Lawyers have been using other types of AI for years, in the form of tools for contract management and e-discovery. But generative AI is different, Auffret says, as it “seems to be genuinely capable of transforming our legal service delivery model and having a much more substantial impact”.
The large language models used by generative AI are “extremely good at automating and enhancing any text-based activities”, she says, “and it so happens that many legal activities are to a large extent text-based”.
ASML expects the technology to deliver substantial time savings for its in-house legal team — more than any other tool it has introduced, Auffret says. But it is also seeing an uptick in effectiveness and quality of service.
Its team was one of the first to try the ContractMatrix tool launched by law firm A&O Shearman late last year, Groenevelt says. Now, about 15 of the group’s roughly 100 in-house lawyers are using the generative AI-powered tool to draft and review contracts, he noted:
“Early feedback of the team shows that the tool does not only save us time with drafting, but also increases the quality of drafting. The tool can be asked to suggest alternative clauses, which also boosts your legal creativity”.
Groenevelt says senior lawyers are getting more out of the tool than juniors, who may be more easily impressed with the initial results and less inclined to pressure-test them. He stresses that “human supervision remains essential”.
Other company legal teams have focused on experimenting with generative AI internally, rather than hiring specialists.
For example, Conduent — a business services company spun off from Xerox in 2016 — explored the possibility of hiring a dedicated AI position in its in-house legal department: a subject matter expert to review AI use within the department and across the business.
But it quickly realized that this was the wrong approach for the group, says general counsel Michael Krawitz, because generative AI touched on many sensitive areas of the business.
So, rather than hiring one individual, the company set up a working group of internal professionals with different specialities — such as intellectual property, regulatory compliance, privacy and risk — to explore how to apply the technology and appropriate safeguards.
Like ASML, Conduent, which has about 50 in-house lawyers, has been experimenting with how generative AI can be used in its contract work. Krawitz said:
“We went into a contract tool pilot thinking it would help us identify clauses that didn’t meet our standards, but the technology has not met our standards. The pilot was marking contract clauses as being compliant when they were not, which was concerning. Still, I remain hopeful that we’ll see that feature start to work well. For now, though, it is distracting and expensive”.
Legal teams are experimenting with tools such as ChatGPT, while also looking at what safeguards are needed to protect data
However, a key point: Conduent’s experience of using a translation program powered by generative AI has been more positive, accelerating the review and approval of contracts when working with clients around the world. And that matches the feedback we have received from every in-house corporation team we spoke with. It is a major reason they are moving away from using translation vendors and translation staffing agencies.
Krawitz can remember, back in 2022 when ChatGPT was rising to prevalence, some legal departments contemplating a ban on its use:
“I think that’s the wrong tone. A better approach is to show that we are working with generative AI, and we are doing it in a way that protects our ideas, our data and our people”.
According to a report from PwC, there is also a financial incentive for legal professionals to embrace AI. The professional services firm’s AI Jobs Barometer, published in May 2024, found a wage premium of 49% in the US and 27% in the UK for lawyers equipped with AI skills. Said Sandeep Agrawal, a partner in legal business solutions at PwC UK:
“This is indicative of the growing importance of AI proficiency within the legal sector. The future of in-house legal teams will probably be characterized by a diverse blend of roles, with lawyers who have AI training working alongside engineers and computer scientists”.
But, right now, many in-house legal departments are just beginning their journey in exploring this technology. Because generative AI relies on large amounts of data, it comes with risks. For example, one major point raised by many legal teams: there is so much implicit biases present in data sets, or within the process, amplified through generative AI. One general counsel told us in-house teams must have a comprehensive understanding of data governance, essential in mitigating these risks. And you must keep fact checking.
And so, more in-house legal teams are embracing collaboration between lawyers and tech professionals, the benefits becoming more widely recognized within companies – with many lawyers becoming incredibly AI tech savvy. It is why, as one legal team leader said, the integration of AI into in-house teams is not just reshaping the composition of these teams but also redefining the value they bring to the table.
