New Generative AI Study Highlights Adoption, Use and Opportunities in the Legal Industry

69% of legal professionals report their generative AI use will continue to increase in the next two years

CHICAGO, Nov. 12, 2024 /PRNewswire/ — Relativity, a global legal technology company, today announced findings from the IDC InfoBrief, Generative AI in Legal 2024, commissioned by Relativity. The study uncovers the rapid increase of generative AI adoption in the legal field, examining how legal professionals are navigating emerging challenges and seizing opportunities to drive legal innovation.

Relativity

The international study surveyed attorneys, paralegals, legal operations professionals and legal IT professionals from law firms, corporations and government agencies. Respondents were located in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States. The data uncovered important trends on how generative AI has impacted the legal industry and how legal professionals will use generative AI in the coming years.

Legal teams’ adoption of generative AI is substantial and it will continue to increase
The study found that half of legal professionals report overall AI use has increased in the past two years and only 3% report their use of AI has declined. Almost half (48%) of respondents’ day-to-day AI usage involves generative AI, and 69% indicate their generative AI use for legal tasks will increase in the next two years.

Why legal teams use generative AI: automation of basic tasks and cost savings lead the way
Across all regions, automation of basic tasks was reported to be the top reason legal teams use generative AI with 58% of respondents citing this benefit. Cost savings followed as the second reason, mentioned by 48% of respondents. These international motivations capture the potential for AI to transform the legal industry by improving efficiency, reducing operating costs and enabling organizations to focus on more complex and strategic work.

However, respondents were not wholly aligned in their expectations of generative AI’s potential impact. APAC respondents had substantially higher interest than their European and North American counterparts in the impact of generative AI on data privacy and information governance. In contrast, European and North American respondents had more interest in AI’s impact on legal analysis/contract analysis augmentation and assistance.

Legal professionals prioritize AI governance and AI principles
When it comes to adopting generative AI, 78% of respondents seek robust AI governance capabilities from generative AI providers, making the ethical, responsible, and effective use of AI the number one priority among those surveyed. Clear AI principles ranked as the second-place priority. As these demands emerged clearly, the data show no clear leader controls the actual purchase nor governance of AI technology, although legal departments are near the top for both areas. Driving innovation in this space could be the key to establishing legal departments as the sole decision maker.

“The findings demonstrate that the impact of generative AI on the legal field from November2022 to today is not a mere temporary fascination, but something that will have a transformative effect on legal teams over the next two to five years,” said David Horrigan, Discovery Counsel and Legal Education Director at Relativity. “The study data on AI policies and governance indicate generative AI is not replacing human legal teams any time soon as legal professionals must ensure ethical and responsible use of AI. The study findings on legal use cases over the next five years do, however, suggest generative AI will be a valuable tool for a wide variety of legal tasks.”

Loss of sensitive or confidential data and data bias are legal teams’ leading generative AI concerns
Almost half of respondents’ day-to-day AI usage involves generative AI, and 69% indicate their generative AI use for legal tasks will increase in the next two years. While this growth signals a shift in the legal industry, which has been historically slow to adopt technology, legal professionals still express concerns around using generative AI. Loss of sensitive and/or confidential data was the largest concern for legal teams and data bias/poor-quality data was the second largest concern.

Legal research, contract analysis and document review are important uses
Although contract analysis and legal research currently lead the way in legal professionals’ use of generative AI, document review is projected to become the leading legal task within the year with 65% of respondents planning to use generative AI within one year and 93% planning to use it within five years. Document review is also the task legal professionals trust AI to help with the most, with 89% being “very comfortable” or “somewhat comfortable” with its use. Conversely, organizations are most worried about using generative AI within investigations, witness preparation and data privacy compliance.

“Although U.S.-based technology companies have been leaders in the development of generative AI, the legal industry spans the globe, and, in compiling this research study, we sought to capture how legal professionals around the world are working with and responding to the rise of generative AI,” said Ryan O’Leary, Research Director for Privacy and Legal Technology at IDC and the lead analyst for the study. “As the study indicates a range of comfort in using generative AI, it does uncover that document review will soon be the leading legal task performed with generative AI— confirming the transformative power of generative AI to the modern legal industry.”

Generative AI presents opportunities for organizations of all sizes
Large organizations are seeing the biggest increase in generative AI usage (organizations with over 1,000 employees saw almost a 50% increase). At the same time, the smaller the organization, the higher their interest is in automating basic tasks. This priority area points to an opportunity for small to mid-size law firms to remain competitive with larger, more resourced firms through technology.

Further, law firms using billable hours are more likely to already use generative AI than their task-based billing counterparts, at 59% and 42% respectively. However, both law firms using billable hours and firms using task-based billing are most interested in using generative AI to automate basic tasks and achieve cost savings.

Upcoming Webinar to Examine Findings
On November 20 at 11:00 a.m. EST, Relativity will host a webinar covering the study results and highlighting perspectives from Fiona Campbell, Director of Dispute Resolution and Head of Electronic Disclosure at Fieldfisher, David Horrigan, Discovery Counsel and Legal Education Director at Relativity, Celia Perez, General Counsel and Corporate Secretary at FreightCar America, and guest speaker Ryan O’Leary, Research Director for Privacy and Legal Technology at IDC. Register for the webinar.

About Relativity 
Relativity makes software to help users organize data, discover the truth and act on it. Its SaaS product, RelativityOne, manages large volumes of data and quickly identifies key issues during litigation and internal investigations. Relativity has more than 300,000 users in approximately 40 countries serving thousands of organizations globally primarily in legal, financial services and government sectors, including the U.S. Department of Justice and 198 of the Am Law 200. Please contact Relativity at [email protected] or visit www.relativity.com for more information.

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