2023 Tech GC Report

What keeps in-house lawyers up at night? We decided to ask them, surveying 105 in-house lawyers on topics like generative AI, contract automation, and doing more with less. The Tech GC report explores the findings from our legal community.

Navigate our findings and interviews from the sidebar.

Foreword

Daniel Glazer is the London Office Managing Partner at Wilson Sonsini.

To paraphrase Marc Andreessen, generative AI is eating the world.

As noted in this year’s Tech GC Report, the business community’s adoption of generative AI has been exceptionally fast; 64 per cent of survey respondents said their businesses are using, or are planning to use, generative AI in their operations.

Legal teams who successfully harness the power of generative AI will have a material competitive advantage over those who don’t

I suspect by the time the 2024 Tech GC report drops, we will be shocked that the initial number was so low.

The adoption by high-growth companies – and especially by their in-house legal teams – is inevitable. We have reached an inflection point where legal teams who successfully harness the power and potential of generative AI will have a material competitive advantage over those who don’t.

This feels like a replay of the 1990s when the Internet and the Web became ubiquitous.

At the dawn of the Internet Age, there were concerns that fewer lawyers would be required because all the relevant legal information – case law, contract templates, and so on – would be online. Yet here we are a quarter-century later and the legal profession is thriving.

There always will be demand for lawyers who can exercise good judgement and manage challenging situations.

Lawyers should use all the resources at their disposal – generative AI is one more tool in the toolbox

Lawyers should use all the resources at their disposal in that regard – generative AI is one more tool in the toolbox. This surely will be part of the solution to the two biggest challenges identified in this year’s Tech GC Report: being buried in low-value work, and limited budget and resource.

It isn’t difficult to foresee a future where AI-enabled tools substantially reduce the amount of low-value work that falls on the shoulders of in-house lawyers, and the scalability of generative AI suggests that will be accomplished at a relatively low cost.

This in turn will provide in-house legal teams with more bandwidth to participate as a strategic partner to the business, which should lead to:

• More successful companies, as in-house lawyers increase their focus on achieving the company’s commercial goals while managing risk
• Greater job satisfaction among in-house lawyers who assume more ownership of and responsibility for the company’s direction

Wilson Sonsini is proud to support high-growth companies and their in-house lawyers as they navigate the path ahead, and to continue our partnership with Juro to provide insight into the state of that journey.

We hope you find their insights as interesting as we did.

Join Juro’s private community of in-house lawyers and legal ops experts for exclusive events, the hottest jobs, and an invite-only Slack group of hundreds of peers.

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Who did we survey?

Juro surveyed 105 in-house lawyers across 30 countries between April 14th and May 2nd 2023, with the following job titles:

• Chief Legal Officer
• General Counsel
• Head of Legal
• VP Legal
• Senior legal counsel
• Legal operations manager
• Legal counsel

Read on to find out what our respondents have to say about legal’s top priorities and biggest challenges in the year ahead.

The next wave: generative AI

Generative AI has experienced a meteoric rise in popularity over the past year. Where do in-house lawyers stand on generative AI and its impact on scaling tech businesses?

As technology develops and new ways of working emerge, so do a variety of business opportunities – and legal challenges. In 2023, there’s no better example of this than generative AI, which has been a huge talking point since the launch of ChatGPT by OpenAI in November 2022.

The development of this technology is astounding – GPT- 3.5, released in March 2022, could handle 8,000 words with various applications around natural language communication. Fast forward one year to GPT-4, released in March 2023, and this iteration can handle over 25,000 words, process images, generate captions and analyse contracts.

Adoption by the business community has been exceptionally fast. 64 per cent of our survey respondents said their businesses are using, or are planning to use, generative AI in their operations.

This technology can help businesses simplify their workstreams and save time on manual tasks – whether it’s drafting easy- to-read policies, creating a legal playbook, or integrating with the business’ systems to offer real-time legal support.

Lawyers are cautiously optimistic about generative AI

The business may be open to experimenting with and implementing generative AI tools, but legal’s opinions on generative AI seem more divided, only slightly leaning towards the positive.

• 55 per cent of legal teams we surveyed rated it favourably, at four or five out of five
• 27 per cent are indifferent to generative AI, and 18 per cent see it as a risk
• 55 per cent of respondents also said that their legal teams were planning to use generative AI in the future

The pros

For legal teams using generative AI in their operations already, the applications are varied and can help legal shift low-value work off their plates. Different uses include:

• Building a help bot: using AI-enabled tools to to answer FAQs from colleagues, or redirect them to useful resources
• Drafting simple contracts: looking at how generative AI can save legal a significant chunk of time by making complex contracts easier to read and understand
• Reviewing or analysing contracts: using AI-enabled tools to review a contract, suggest improvements, and analyse certain points in the document

There seem to be enough use cases to help legal work more efficiently. This is invaluable, given that legal teams don’t usually scale in proportion to the rest of the business.

Being able to serve a business scaling commercial headcount into the hundreds while legal only gains one or two additional lawyers is an ever-evolving challenge. This is one that generative AI may be able to positively impact.

The cons

On the other hand, 45 per cent of lawyers we surveyed were hesitant to jump in and start using generative AI. Those respondents had reasonable concerns around doing so:

• Cybersecurity and confidentiality: “we don’t know how secure these platforms are, and that’s a concern when disclosing sensitive information”
• Privacy: “we don’t know who can access the information we send through a generative AI platform”
• A lack of guardrails: “we don’t have policies or guidelines in place to help colleagues use it as effectively and safely as possible. It’s difficult to control”
• A lack of information or experience: “we’re not sure how to make the most of these tools”
• Platform fatigue: “we’ve just implemented other tools within legal and need a pause from evaluating new software - we’re a lean team and the demands on legal are high”

Despite concerns, generative AI has the potential to transform business operations and legal’s ways of working

There’s a distinct lack of regulation around generative AI that seems to surface a variety of legal problems. In-house lawyers are trying to get on top of it all by creating policies that help businesses manage how they interact with these platforms.

But it isn’t easy, and it takes time – which most lean legal teams don’t have. Despite the concerns, generative AI has the potential to transform business operations, and more specifically, legal’s ways of working.

We look at how legal gets involved when introducing generative AI to the business in the following interviews.

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Generative AI: avoiding points of failure

Richard Mabey is the CEO and co-founder of Juro.

The pace of development with AI is mind-blowing, and while companies should explore ways to integrate generative AI into their operations, they should also consider (and find ways to avoid) the points of failure.

1. Privacy. If you are buying an AI-enabled tool, go deep on its compliance credentials. Would you be submitting personal data to it, where is it going, what are the protections, and is this compliant?

2. Guardrails. It’s difficult to control how people use a new platform – and it’s definitely on legal’s radar. According to our data, 19 per cent of lawyers we surveyed believe their biggest obstacle with generative AI is making sure there are policies and procedures in place to manage use.

Keeping up with trends is a no-brainer at a fast-paced startup; but it’s important to make sure you’re doing so in a way that helps the business thrive in the long run.

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Introducing AI to business operations at Clarity

Caroline Iroegbu is the General Counsel at Clarity.

How is legal helping Clarity incorporate generative AI into its operations?

We have a technology ‘task force’, which is a group of individuals who are interested in discussing areas Clarity should focus on to become a technology-enabled agency.

The technology task force explores generative AI, and acts as the driving force behind meaningful change within the business. As GC and sole counsel, it’s important that I’m part of this discussion and that I understand the new technologies we’re exploring – not only for my personal interest, but also to ensure we embrace new ideas in a way that protects our people, clients and the organization.

We’re keen to lean in and embrace the technology, but we need to do so in a transparent and respectful way

What are the considerations around usage within the business?

There are clearly legal risks with using generative AI so I think it’s important the business is aware of these from the outset and that there are clear guidelines or policies around how we plan to adopt the technology. We need to know:

• What we should and shouldn’t input into AI platforms
• How that input data gets used
• What we can do with the output
• The limitations on an AI’s “knowledge”, how far back its training data goes

As well as our internal policies, we also need to be transparent with our clients on how, if at all, we’re going to be using AI in any client work.

We’re keen to lean in and embrace the technology, but we need to do so in a transparent and respectful way.

AI platforms have moved beyond an ask-and-answer format; now there are hundreds of use cases that can benefit legal

Any advice for in-house lawyers trying to understand how to use generative AI?

There are two elements that in-house lawyers need to think about when considering generative AI:

1. The legal implications for its general use within a business
2. The practical use cases in the legal function

With the first element, the key is to read up on generative AI and ensure you’re aware of the issues – read articles, attend webinars, and talk to other lawyers.

The second element is trickier. AI platforms have moved beyond an ask-and-answer format; now there are hundreds of use cases that can benefit legal, but I need help myself understanding what these are. I would recommend turning to your networks for content on this topic – like Juro’s community.

Reaching out to law firms can also be useful – they may run webinars or events on the potential of generative AI. Lawyers need to make sure they stay on the front foot or we’re going to get left behind. There’s a lot I still have to learn, but I do believe that generative AI is here to stay.

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Generative AI: challenges and opportunities

Patrick Hicks is the General Counsel at Trust & Will.

How is Trust & Will incorporating generative AI into its operations?

Our business is dedicated towards creating new ways for individuals to interact through generative AI. We’re experimenting with AI throughout the company:

• Our marketing team may use it to create assets or write copy for advertisements
• Our communications team may use it to get a headstart on responses to reporters, answer questions from the public, and so on 
• Our engineering team is using it to test out new coding, but also to test new ways of interfacing with existing systems

Our company-wide approach involves taking what we have in place, and finding a way to use AI to make that process more efficient for end users.

These use cases are exploratory right now; we don’t have much in the way of publicly facing AI-enabled systems, but we’re trying to understand what is now possible.

Generative AI is useful as a means to get out of the lawyer’s mind and explain legal concepts in a way that others in the business understand

How is the legal team using generative AI?

We’ve found a few opportunities to enable the legal team with generative AI. Some use cases are fairly common, like drafting contracts, inserting provisions, or using AI-enabled tools as an assistant to complete the preliminary work before fine-tuning.

The legal team often has interactions with users outside of legal. We regularly find ourselves in a position of translating complex legal concepts into simple, ordinary language.

Generative AI has been incredibly helpful for this - both to assist us and to do some of the initial work through automation.

It’s useful as a means to get out of the lawyer’s mind and explain legal concepts in a way that others in the business understand.

What does that look like in practice?

Sometimes it’s as simple as ‘take this complex legal policy and simplify it’. We then see what the system spits out and progress from there.

We’ll also take an established policy and find new ways for internal team members to interact with it. If a colleague has a question around how many days of leave they are eligible for, they can ask an interface that will read and interpret the policy and find the answer for them.

It’s an interesting way for generative AI to act as the bridge between teams; questions may have previously been fielded by our human resources or our legal team, and are now self-served via an AI-enabled tool.

The fog of rapidly developing technology makes it difficult for in-house legal teams to confirm a solid legal opinion

What are the legal considerations around usage within the business?

The primary concern is understandably privacy and data control. As lawyers we must be concerned about privacy, access and control of information, and intellectual property (IP) ownership.

If you were to build a fantastic solution through AI, who owns that solution? Who can replicate it? These are unique situations for legal teams, and legitimate concerns for organizations who don’t want to lose control of their IP.

These concerns are made even more complex by the European Union and the variety of States with individual privacy data control laws - so it's not only a valid concern, but a difficult topic to dive into.

On top of that, the fog of rapidly developing technology makes it difficult for in-house legal teams to confirm a solid legal opinion. The avalanche doesn’t stop, but at Trust & Will we have a philosophy of testing and learning quickly. It’s part of our ethos to look at new technologies and determine what we can do with them.

This doesn't mean that we will do something with it, but it’s useful just to explore and consider what could be done.

Any advice for in-house lawyers trying to understand how to use generative AI?

I would recommend experimenting with AI-enabled platforms instead of avoiding them entirely - the lawyers waiting today will find themselves five years behind in development when it comes to finally taking the plunge and experimenting with AI. It’s an exaggerated learning curve.

Use fake data for your testing and modelling - it’s easy to generate, and will help overcome concerns around inputting sensitive information into an AI platform. It also allows the business to flip that switch quickly and understand how AI-enabled tools work.

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Our old friend: doing even more with even less

“Do more with less” is an objective legal often has to contend with, when it comes to maximizing use of existing resources to better enable and support the business. How can legal teams get started?

2023’s economic reality has stopped legal headcount growth in its tracks, for most businesses: 75 per cent of respondents say legal headcount is frozen or decreasing, but 73 per cent say their companies are projected to grow up to or more than 2x this year.

Getting the maximum out of existing resource is imperative if legal is to support the business through this period of growth.

When legal has limited budget, low-value work can make it even more difficult for lawyers to focus on high-value, impactful tasks

This year, we asked lawyers about their top three challenges for the year ahead:

• 76% – Being buried in low-value work
• 69% – Limited budget and resource
• 49% – Aligning priorities with the business
• 44% – Getting buy-in for process changes
• 31% – Collaborating with other teams
• 18% - Environmental, social and corporate governance
• 13% – Other (staying on top of risk, a constantly-changing regulatory environment)

It makes sense that legal’s top concerns are around low-value work and limited budget and resource, given the fact that they have to manage an increasing workload with no increase in headcount.

Both these points have been cited as a top three challenge over the past five years of running this report. They tie in strongly with each other – when legal has limited budget, and a frozen or decreasing headcount, low-value work can make it even more difficult for lawyers to focus on high-value, impactful tasks.

Over the past five years, we’ve been through a pandemic that brought the world to a standstill, bank collapses, war, hyperinflation, and more. Yet throughout all this, lawyers are still facing the same problem in their businesses, blocked by low-value work instead of focusing on the high-value, impactful, strategic tasks they were trained to do.

We explore the meaning and impact of low-value work with a spotlight on the legal team at fintech giant Revolut.

‍Find out how they created an automated triage system to surface and re-route these tasks in this blog.

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How legal can tackle low-value work

Sarah Irwin is the Head of Legal at Tines.

What does low-value work look like for you?

I would define low-value work as work that doesn't really have an impact on the business. Low-value tends to also be low-impact - it’s usually repetitive, routine, and mundane.

The best example of low-value work would be something like reviewing NDAs - that whole process shouldn't exist, and should be automated somehow.

How do you handle low-value work so you can dedicate time to more strategic projects?

I outsource most of it to an alternative legal solutions provider (ALSP), or I find ways to automate the work. If the workload is process-heavy, repetitive, and doesn’t include the need for legal advice, I outsource as often as I can - that’s how I determine which projects I need to handle, and which ones I can offload.

When it comes to automation, we use contract redlining software. Lawyers have a mountain of work on their plates, so to make time for the work that matters, I strongly advise against defaulting to additional headcount.

Instead, consider leveraging ALSPs and implementing tools to help with automation.

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