At Sydney-based Inkling Legal Design, staff have built an AI-powered predictive tool that builds on its previous work to improve how consumer contracts are drawn up.
The system aims for rapid generation of first drafts of terms and conditions written in plain language. Its use of automated document review delivers significant savings, replacing procedures that used to take weeks.
But while tools like this provide an insight into how AI is changing legal work, the question is whether the next step -- licensing tools developed internally to clients -- might produce new revenue streams.
Hilary Goodier, a partner at law firm Ashurst, and global head of Ashurst Advance, its technology-enabled legal services division. "There's a lot of noise out there," she says. "But the industry as a whole is still very much at the beginning of this journey."
Law firms are increasingly using AI to improve productivity in routine work, such as document review and contracting, as well as in more complex, strategic work, such as developing litigation strategies. And, rather than buying off the shelf, some are developing AI tools themselves.
It's a subscription model for the vault, and an hourly rate when you need access to our bench of lawyers
This was the case for Singapore law firm Allen & Gledhill in 2024, when it started developing a generative AI tool called A&GEL (pronounced "angel"). At the time, no system was available that was suitable for its practice groups and business services departments, says Tham Kok Leong, a partner at the firm. "If you wanted one, you had to build it yourself."
A&GEL uses generative AI to speed up the execution of high-volume tasks while ensuring the accuracy of analysis by comparing drafts against constantly updated vetted precedents.
"We wanted to augment traditional workflows," says Tham. "You can do better work because you have access to so much more . . . It doesn't mean there will be less work [for lawyers]."
For Inkling, AI is enhancing the insights it gains from humans. Its predictive tool uses the legal design agency's historic repository of user-testing data across several different jurisdictions.
The tool looks for potential stumbling blocks such as overly complex language and cultural sensitivities. "It tells us all the ways we should think about changing the drafting to make it more relevant for the specific audience," explains Sara Rayment, Inkling's founder and managing partner.
Like Allen & Gledhill, Inkling decided to design its own tool. Existing AI products have tended to be trained using more legally aggressive US documents, she says, which makes them less appropriate for Asian, Australian and UK clients. "Because of the way they're weighted, we couldn't get them to work for us," says Rayment.
But if some firms are developing their own tools, Singapore's Rajah & Tann is among those taking that next step by licensing them to clients.
The law firm has recently launched a subscription-based service that gives clients access to an AI-powered contract review service based on its own internal systems.
On the face of it, this might raise a danger for the law firm that clients rely less on the firm. But Rajesh Sreenivasan, head of technology, media and telecommunications at Rajah & Tann, does not foresee this as a risk.
The service relies on accessing the law firm's digital vault of vetted legal documents and data. "Then there's an 'off-ramp' to the law firm for more nuanced issues," he says. "So it's a subscription model for the vault, and an hourly rate when you need access to our bench of lawyers."
We've seen more advancements in technology in the past two years than we have in the past 20
Because this cuts costs on routine tasks for clients, he believes that in-house teams may in fact turn to the law firm more often for complex tasks and advisory services.
Ashurst also sees a need to rethink the business model. Led by Goodier, it has been tracking changes in how clients buy legal services, mapping the tasks generative AI can replace, and developing alternative billing models that charge clients for both the technology and the human skills.
The advent of AI has meant shifting the balance between people, processes and technology in the delivery of legal services at Ashurst. "Usually the people and the process are at the core of that, and we fit the technology in along the way," says Goodier. "But we're putting AI at the core of the service and building the process and the people around that."
She believes that, given the pace of change, more firms may need to follow suit. "We've seen more advancements in technology in the past two years than we have in the past 20," she says. "You're getting bigger shifts among firms that have been on this journey for a year or two. But those are still in the minority."
