There has been significant growth in spend management, e-billing, contract life cycle management, legal matter management and legal document management as legal departments increasingly seek technology-led efficiencies, Gartner detailed in a recent statement. It noted that incorporating GenAI into these applications will only accelerate purchasing and adoption.

GenAI, Gartner’s chief of research in its legal, risk and compliance practice Chris Audet mused, has “huge potential” for bringing more automation to the legal space.

“Rapid GenAI developments, and the widespread availability of consumer tools such as OpenAI’s ChatGPT and Google’s Bard, will quickly increase the number of established legal technology use cases, in turn, creating growing market conditions for an increasing number of legal-focused tools,” he said.

In the in-house realm, law department leaders need to at least consider adopting new and emerging technologies in order to meet business demands and avoid future budgetary pressures, Audet continued.

“As various business functions pursue automation, legal leaders may find themselves facing some tough questions from senior leadership if they haven’t evaluated its potential in the legal department,” he said.

GenAI specifically will likely force legal departments and pay structures to adapt, the firm noted.

Gartner pointed to the example of billable hours being harder to track if legal documents are partly or fully AI-generated. Furthermore, the firm advised, significant changes may be required to the ratio of in-house and outside counsel expenses, the ratio of generalists and specialist lawyers, and talent needs in-house should GenAI platforms be utilised effectively.

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“New technologies can fundamentally change the way legal organisations do business, and GenAI has enormous potential to do this,” Audet said.

“While at first technology can promise more than it delivers, that can be as much to do with adapting to new ways of working as it is to do with flaws in the technology.”

In the face of such a monumental upending of the daily operational landscape for legal teams, what are Australia-based technology providers doing to better support our practitioners?

LEAP

LEAP Property senior marketing manager Wenee Yap said: “The legal AI arms race is on, and we’re here to help lawyers take the lead.”

“Given Gartner’s $50 billion prediction for the global legal tech market by 2027, LEAP has made a strategic investment to integrate legal AI within LEAP. This includes: LawY, AI to research and draft documents, which you can verify by qualified lawyers, and Matter AI, which can create a chronology in 10 seconds. More is on the way, and all of it is immediately useful to lawyers today,” she said.

Donna Broadley, the chief executive of LEAP in APAC, added that GenAI is the “Industrial Revolution of our era” and that a specialist application of GenAI is coming next.

“As one the world’s largest legal software providers, LEAP is well placed to capitalise on delivering what few others can: integrated AI solutions. Our legal AI is integrated into your practice management system – the system you use every day to work,” she said.

LexisNexis

Greg Dickason, LexisNexis’ Pacific managing director, said there is “no doubt” that, if adopted appropriately, GenAI will drive unprecedented productivity and efficiency gains for legal professionals in Australia.

American clients today, he added, report saving up to 11 hours per week across all legal tasks using Lexis+ AI.

“There are, however, extremely important legal, ethical and security concerns that must be considered at every stage of developing and using AI tools, particularly in the legal sector where quality of responses and transparency of results are table stakes,” Dickason said.

“LexisNexis has invested over a billion USD in its technology infrastructure to ensure that lawyers can use its Gen AI solution with a commercial solution available next month in Australia. Robust guard rails around privacy, data governance and security are in place to protect customer data and deliver hallucination-free linked legal citations.”

“Lexis+ AI responses are always grounded in the closed universe of comprehensive and authoritative LexisNexis content, which includes primary and secondary sources, analytical content and practical guidance materials.”

Relativity

David Horrigan, who is the discovery counsel and legal education director at Relativity, noted that although Gartner’s 2027 forecast is higher than other estimates, their assessment of the potential impact of generative AI to get to that number reflects what the US-headquartered provider has seen.

For instance, Horrigan said, 28 per cent of chief legal officers said in The General Counsel Report 2024 that they currently use generative AI for some legal functions, and this number is expected to increase substantially as 75 per cent of respondents indicated their organisations will increase AI use in the coming years.

“Generative AI is transformative, but AI in legal technology isn’t new. Generative AI could very well bring Gartner’s forecast to fruition,” he said.

There’s strong interest in generative AI from Australian legal professionals, Horrigan went on, “who face the same complex data management challenges and deadlines as US counterparts, but often with smaller teams”.

“We’ve prioritised investing in Australia’s legal market for 15 years and look forward to continuing to support them as the future of law is transformed by generative AI,” he said.

PracticeEvolve

Gartner’s findings were “not particularly a surprise” to PracticeEvolve’s general manager of marketing, Adam Bullion.

“With our increasing demand for information and the expectation that software will take care of specific tasks faster, it’s only natural that advancements in technology are catering to these needs. Artificial intelligence, as indicated by the research, will simply continue to further drive our quest for efficiency, productivity and effectiveness whether that’s in our working lives or our personal lives,” he said.

While concerns exist regarding the potential displacement of certain roles by AI, he said his experience suggests that technology adoption often leads to the emergence of new roles within any organisation.

Those roles, he posited, will be better supported by technology that can act as an assistant.

“Therefore, it’s evident that law firms must swiftly embrace new technologies to meet these demands and stay relevant,” he said.

“However, as legal technology providers, we have a responsibility to collaborate with firms and work in partnership to integrate AI into existing software and systems.”

“That means the market benefits from the technology by ensuring they harness its potential to enhance their operations and grow.”

Actionstep

Gartner’s research, Auckland-headquartered provider Actionstep reflected, “underscores the impact” of accessible consumer tools like OpenAI’s ChatGPT on legal departments’ technology investments, propelling the industry toward AI and automation.

“GenAI has the potential to reshape legal services globally, aligning with evolving client and employee needs while ensuring operational efficiency and growth. What is important to note here is firms must do more than just jump on the bandwagon when it comes to AI,” the provider said.

“True value comes from integrating AI into specific use cases and workflows that enhance productivity and deliver on the firm’s objectives. Unless AI tools are connected to your core tools, you’ll just create more data silos.”

Actionstep works with law firms in Australia and globally to pair AI with Actionstep as their core practice management platform, the provider advised, ”so their firm’s ideal way of working and ideal outcomes are supported”.