A recent Bain & Co. survey highlighted a mixed bag of feedback on generative AI deployments across several business functions. Among the survey’s key findings were: 1) a shift from hype to a focus on value creation, including increased concerns over quality and capabilities; and 2) a prevailing trend of building over buying where off-the-shelf solutions are not sufficiently mature or specific enough.
User Satisfaction, Business Value
While AI adoption increased across the board among different business functions, questions remain as to performance – that is, whether they genuinely deliver value. A range of sales / marketing and customer-related functions topped the list, noting that performance met or exceeded expectations. But for most other functions, it fell short. Specifically, AI for legal lagged the pack with an 18% decline between October 2023 and February 2024.
Why did the performance of AI for sales, and a handful of others outpace the rest, while the experience in legal took a nosedive against expectations? The answer is two-fold.
- Sales functions typically benefit from a more direct correlation to value. AI that identifies more top of funnel leads naturally results in more sales calls, and ultimately a higher chance of securing new customers. New customers are measurable from a top-line revenue perspective. Legal is further removed from top-line revenue, typically viewed as a cost center than a revenue generator, with its strategic value difficult to measure.
- Perhaps more importantly, lawyers are more critical and scrutinizing than other business professionals. Low output quality and task performance were the top reasons cited in the survey for unmet expectations. Whether external or in-house, high stakes for legal mean a higher bar for output quality.
Buyer Sophistication and Expectations
At LexIQ, we have certainly noticed an increase in buyer sophistication. Buyers, namely lawyers and legal operations professionals, have had time to consider the exact problems or use cases for the technology. We think this is a good thing.
Last year’s AI frenzy has given way to a 2024 market in which professionals shop more intentionally for point solutions geared toward very specific needs. They also benefit from a clearer understanding of tech capabilities and how the tech should and should not be used.
Build or Buy?
Needs and capabilities vary among law firms and corporate legal departments. Some have long invested in tech and quasi-tech capabilities: knowledge management, innovation, and legal operations. Others are just getting started.
In either case, building a high-performing and well-equipped technology team within an organization requires enormous resources, know-how, and buy-in. On the low end, a crack team of AI development talent would cost over $400,000 in just development costs (not including associated related overhead). Furthermore, those orchestrating these efforts can’t just develop the tech without strong foundational enterprise underpinnings around data storage, governance, IT infrastructure, and security. Deploying generative AI adds even more complexity, requiring an understanding of LLMs, vector data stores, and ever-changing accuracy and reliability enhancing techniques such as Retrieval Augmented Generation (RAG).
In most cases where an organization is not in the business of building tech solutions, engaging with a vendor is a much more practical (and financially sensible) approach. A SaaS vendor with a robust solution is offering exactly what the term implies – a service. As a specialist, the right vendor will come with extensive expertise and reduce time-to-value by providing:
- Customizability to address your specific legal use-cases
- Cost effectiveness versus internal builds
- Security infrastructure (strict data segregation between clients, secure data storage/protection from any data being used for training purposes, and adherence to industry security standards like SOC II + regular audits and testing)
- Continuous maintenance and upgrades – including around the clock support
- Quick implementation without lengthy testing
- Seamless integration with existing tech stack (through plug and play integrations like a Microsoft Word add-in)
- Industry know-how around GenAI best practices and common pitfalls to avoid
The Thoughtful Middle Ground for Legal
In a market saturated with generalist legal tech vendors that suffer from low tool quality and limited capabilities, it is crucial to first identify specific use-cases that matter most to your organization. Then, instead of getting stuck with a suboptimal one-size-fits-all solution, we recommend partnering with a legal tech vendor that offers robust out-of-the-box functionality and can custom-build additional functionality specific to your use-case alongside you.
At LexIQ, we prioritize close collaboration with both legal and technology teams. This partnership enables us to create custom builds for specific use-cases by enhancing the existing core functionality of our Microsoft Word add-in. Our iterative process ensures that the solution evolves to meet your precise requirements. Some of the ways in which we allow our clients to customize their instance include:
- AI Agents custom-built for you to carry out end-to-end tasks. (e.g., lease abstractor, compliance checker)
- Advanced database integrations, with commonly used legal data stores like iManage, Google Drive, Dropbox, and more.
- Custom UI/UX features and buttons for the tasks you perform the most often. (e.g., 1-click access to frequently used templates and clauses, specialized search functions, etc.)
We further support your teams through comprehensive training and education, enabling them to use the solution effectively. Our thoughtful approach focuses on maximizing output quality and task performance, ensuring a significant return on investment while minimizing onboarding and training challenges.
To start your organization’s journey with LexIQ, join our waitlist today.