Why a connected legal tech ecosystem is the answer to increasing fragmentation

In conversation with Lawyers Weekly, Raghu Ramanathan, president of legal professionals at Thomson Reuters, delved into the importance of law firms and legal departments having a connected ecosystem and what the future of AI tools may look like in the profession.

In today’s AI-driven landscape, the historical divide between the practice of law and the business of law is starting to blur – and Ramanathan said that with the introduction of AI, a connected ecosystem without “silos” is the way forward.

“The practice of law is very much focused on the lawyers, and how can the lawyers provide better advice, how can they validate legal points, [and] opinions. And then the business of law has been very much focused on how law firms operate as a business, how do they delight their customers with a better experience, things like timesheets and billing,” he said.

“If you look at the landscape today, it’s divided. Usually, you have different players in different boxes. But one of my predictions is that’s going to change with AI. [Previously], it was very important to connect, for example, case management systems, with the practice [management] systems. There were some benefits. But by and large, they were nice to have.

“But with AI, it works very, very differently. So, AI needs to know everything that’s happening in the context of a matter. And that improves both the business side, but also it improves the outcome in terms of the results of that matter itself. With AI, it’s no longer nice to have – the machine is needed. So, I do believe, in some form or fashion, some of these silos that existed will come together.”

In terms of legal AI specifically, tech companies are increasingly seeing that generative AI (GenAI) is applicable to legal businesses, creating an “explosion in funding”. In fact, Ramanathan said that a few billion in funding have “come out of nowhere” over the last 18 months for legal AI.

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While the demand for legal AI likely grows as more businesses implement such tech, Ramanathan estimated that there are upwards of 50 AI tools on the market specifically for the legal profession.

“If you think about GenAI and the rapid advancements that we’ve had in the last two [to] three years, and if you think about which industry GenAI is most relevant for, and what is GenAI good at, I would say legal comes out quite on top. Because what lawyers do all the time is they are reading, they’re analysing, they’re writing, which is precisely exactly what GenAI does. That’s what it’s good at. It’s not the same in other industries,” he added.

“So, you’re talking about [AI tools] which effectively have the core skills that a lawyer has. So as a result, what we’ve seen is with the rapid advancement of technology, people are seeing that this industry is going to change.”

Despite this, there are still many firms and legal teams that rely on disconnected legal tech solutions, which could fall by the wayside if they aren’t able to integrate with other tools.

“[There are] some really specialised AI tools doing some sharp, very narrow problems, right? And the challenge is that for most of the law firms, and even legal counsel, the last thing they want to do is to say, I’m going to turn on this solution for this problem, this solution for this problem, and I’m hopping between everything. It’s too much for a lawyer to know which AI to use at what time,” Ramanathan said.

“So, one of the things we’ve been very, very clear from the beginning is that we want to have the most comprehensive set of AI capabilities in Thomson Reuters. And as a last count, we had 26 AI skills. And this is the most comprehensive in the market. It includes research skills, drafting skills, summarisation, [and] lots of different skills.

“I think that’s one point of integration. Because people are not then siloed, and they can say, I can go to this AI to do everything that I want, and I don’t have to be specialising and knowing which solution to use when.”

However, Ramanathan also emphasised the importance of having a “human in the loop” no matter which AI tool is being used. In Australia, Thomson Reuters has 64 legally trained experts behind its AI tools, allowing users to click through an AI conclusion and verify where it came from.

“At the end of the day, lawyers are responsible for their output. They cannot pass the buck to this machine. They need to do the validation. If the AI is saying, you know, here’s a valid claim for you in this matter, here are the cases that support your arguments, you need to go and validate if each case is real,” he said.

“And that’s the disconnect again. Because you have the standalone AI systems from some players who are just giving you the output, but then human validation is very hard to do because you’ve got to go find it yourself. So, one of the things that we have very particularly tuned our AI solutions to is to cover end-to-end workflows.

“So, you can have AI get you to a fast start, but then you can use our tools and technologies to validate everything that AI came for. And for example, one of the key features that we have in our AI is that anything that you read has links and citations behind it, which you don’t get if you use a generic LLM like OpenAI, for example, or Claude or Gemini.”

Finally, Ramanathan emphasised that while many businesses are “struggling” right now with not having accessible data, integration and data flow between AI tools and other systems is important, as is thinking about the value proposition of law firms in the future.

“If you look at the legal teams, especially the tech teams within law firms or in-house corporates, they come from, most of them, from an old paradigm. They’re not the most cutting-edge experts in AI. So, what I see is a lot of refreshment going on in terms of new blood coming in, lots of [organisations] thinking about hiring data scientists, more data profiles in the law firms. So, I think that change is happening.

“What’s important is if you step back and ask yourself, what’s the value add of a law firm in the future? Because you could argue that most of the standard AI solutions are going to start to give a reasonably good answer,” he added.

“And clients are going to say, I got this answer directly by using an AI solution. How are you better? And to prove that, other than relying on individual brilliance, which I know law firms can do very well, is to leverage all the history of all your knowledge that you have over the engagements over the last decades. If you can bring it on top of the standard AI capabilities and agents, then you can say that’s my value add.”