Legal Tech's Duel: AI Replacement vs Human Element Amidst Market Decline

Legal tech advancements include AI-powered litigation research tools and data management systems. Trends indicate AI's potential in legal technology despite financial challenges while maintaining human oversight remains crucial.

Legal Tech's Duel: AI Replacement vs Human Element Amidst Market Decline

Welcome to your Law Tech briefing for July 7th, covering what happened in legal tech recently.

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TLDR; Listen instead:

Have less than a 1 min? Three takeaways from yesterday

1. Advocate for the Use of AI: Embrace AI advancements such as AI-powered litigation research assistants like Intelllex's Scott and be ready for generative AI, which is poised to play a crucial role in the future. These innovations can help simplify complex legal processes and, when used in conjunction with human oversight, provide ethical and unbiased solutions to legal problems.

2. Prioritize Data Management: Effective data management is vital to harness the full potential of legal technology. This extends from streamlining information resources to leveraging cloud-based storage solutions. A focus on data management can ensure that a firm navigates existing data hurdles and maintains security measures as they implement newer technologies.

3. Maintain a Balance between Tech and Human Elements: A recent survey suggests that AI poses a potential threat to roles like librarians and knowledge management professionals. Firms must appreciate and retain the indispensable human element. A balance between advanced technology and the human role will ensure both effective legal process handling and job security within the industry.


Yesterday's legal technology scene made room for advancements in AI, data management, and personnel adaptations. Singapore-based Intelllex launched Scott, an AI-powered litigation research assistant. The tool employs OpenAI GPT 3.5 to deliver legal answers based on natural language queries and broadens the reach beyond Singapore law to include the UK Court of Appeal and Supreme Court judgments.

Meanwhile, LexFusion, a legal tech company headed by industry veterans Joe Borstein and Paul Stroka, shared unique perspectives derived from shaky economic conditions and their company's third anniversary. Additionally, a survey by Wolters Kluwer and Above the Law theorized that librarians and other knowledge management professionals could potentially be replaced by generative AI.


Generative AI seems to become a key player in future legal technology developments, seen by the optimistic forecast by, given the current 43% decline in investment in legal and tech companies. The increase in debt financing deals during this period illustrates the shortage of equity options for legal tech companies. Innovation, however, seems to lie in the adaptation of AI solutions in this struggling scenario.  


As underscored in the LawNext Legal Technology Directory's resource library, streamlined data management remains a crucial aspect to harness and appreciate legal technology fully. Utilizing practical frameworks and leveraging the cloud, among other things, can equip law firms to navigate data management hurdles.

Data is also key to many AI applications. The generative AI narrative isn't devoid of risks. Legal professionals need to take into account the need for human oversight in AI applications to maintain ethical and unbiased solutions. In this context, the legal sector may need to move towards a more user-centered approach, using tech to simplify complex legal processes, which could lead to significant innovation. Law firms, in the face of potential AI-driven job cuts, should focus on effective data management, security, and embracing the human element's indispensable role, which remains central despite promising technology. A balanced integration of both could ensure a promising future for the legal industry.


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Key stories

Exclusive: Global legal and tax tech funding drops 43% in the first half of 2023 (Legal IT Insider)

Investments in legal and tax tech companies decreased by 43% in the first half of 2023, falling from $3.16bn to $1.80bn, predominantly due to challenging global economic conditions such as high inflation and increased interest rates. Hampered by dwindling equity options, these companies turned to debt financing, with deals soaring to $305m, up from $160m in H1 2022, according to the data from Legalcomplex CEO, Raymond Blyd expressed optimism, arguing debt financing protected company equity and was only viable for "healthy" companies with strong balance sheets. The broader tech sector also experienced similar slumps, with UK, France, and Germany witnessing drops between 44%-57%. The outlook remains bleak as investments fell by nearly 76% in June 2023, but there’s a glimmer of hope with emerging interest in generative AI companies.

Survey Says Gen AI Puts Law Librarians and KM Professionals At Risk of Obsolescence (LawSites)

The majority of legal professionals believe librarians and others involved in knowledge management and research are at risk of being replaced by generative AI, according to a survey conducted by Wolters Kluwer and Above the Law. Over two-thirds of respondents believe document review lawyers and librarians could be replaced by AI. The jobs of law firm partners appear safest, though certain practice areas such as corporate, trust and estates, litigation, intellectual property, and tax are more likely to be impacted by generative AI. More than 80% of respondents believe AI will create "transformative efficiencies" for routine tasks and research. Despite this, the adoption rate of AI in law firms may be slow, echoing the slow adoption of cloud technology.

All stories

Product Insights: AI-enabled litigation research assistant Scott from Intelllex (Legal IT Insider)

Intelllex, a legal search and knowledge platform based in Singapore, has unveiled Scott, an AI-powered litigation research assistant. Using OpenAI GPT 3.5, Scott can search through Singapore caselaw, as well as UK Court of Appeal and Supreme Court judgments. By inputting natural language questions, users can receive natural language answers from Scott, which are based on Intelllex's owned annotations and datasets. The platform intends to broaden its coverage to encompass other common law jurisdictions in the future. Scott is currently applicable to litigation lawyers, students, and NGO executives.

On LawNext: LexFusion CEO Joe Borstein On His Company’s Third Anniversary and His Client Casetext’s Acquisition By Thomson Reuters (LawSites)

Legal industry veterans Joe Borstein and Paul Stroka reflect on the ups and downs of their company, LexFusion, as it nears its third anniversary. Borstein, a former executive at Thomson Reuters, discusses the recent acquisition of Casetext by Thomson Reuters for $650 million in cash. He shares insights on the influence of generative AI on the legal industry and his ongoing discussions with law firm and corporate legal leaders. This marks Borstein's fourth appearance on the LawNext podcast, which is sponsored by various companies.

Judge delays enforcement of California privacy law regulations (Legal Dive - Latest News)

A judge in Sacramento has granted businesses a reprieve from complying with certain elements of the California Consumer Privacy Act (CCPA) until March 2024. The California Chamber of Commerce sued for a delay in enforcement, arguing that businesses should have one year from the adoption of final regulations before enforcement could begin. The judge ruled that no finalized regulation could be enforced until 12 months after implementation, but enforcement will continue for regulations passed under CCPA until superseding regulations are in place. The regulations aim to harmonize CCPA with the California Privacy Rights Act (CPRA), which were approved in March.

Class action seeks to compel Twitter to arbitrate severance complaints (Legal Dive - Latest News)

A former Twitter employee has filed a lawsuit seeking class action status, alleging that the company has failed to provide severance pay and address discrimination claims for the 2,000 employees laid off during Elon Musk's takeover. The lawsuit claims that Twitter is avoiding arbitration and attempting to make former employees share the cost, despite agreeing to cover it under JAMS rules. Furthermore, Twitter is accused of not honoring severance agreements outlined in the merger agreement with Musk.

Lilly to pay $2.4M to settle EEOC suit alleging bias against older applicants (Legal Dive - Latest News)

Pharmaceutical company Lilly USA will pay $2.4 million to settle allegations by the US Equal Employment Opportunity Commission (EEOC) that it discriminated against older applicants in its hiring practices. The EEOC claimed that Lilly intentionally under-hired older applicants for sales positions, violating the Age Discrimination in Employment Act. As part of the settlement, Lilly will provide EEO training to managers and HR personnel involved in hiring for these positions and ensure that contracts with third-party recruiting firms state that age discrimination is prohibited.

What Should Be on Your Law Firm’s Dashboard (Attorney at Work)

This article emphasizes the significance of a law firm dashboard in comprehending and forecasting the firm's performance. Unlike lagging indicators like financial reports that only reflect past performance, the dashboard acts as a leading indicator by providing insights into the firm's direction and enabling necessary adjustments. The article identifies four crucial areas to monitor on the dashboard: cash, production, capacity, and marketing and sales. By monitoring these aspects, law firms can anticipate potential challenges and proactively address them.

Elon Musk Sends Legal Threat To Facebook And Once Facebook Finishes Laughing I’m Sure They’ll Get Right Back To Him (Technology Archives - Above the Law)

Elon Musk has reportedly sent a legal threat to Meta Platforms, formerly known as Facebook, accusing the company of misappropriating Twitter's trade secrets and intellectual property. The letter, sent by attorney Alex Spiro, claims that Meta has hired former Twitter employees who had access to confidential information. The letter does not explicitly demand any specific action or threaten legal action, but it raises concerns about Meta's alleged scraping of Twitter user data and the need for document preservation. While no lawsuit has been filed yet, Musk's actions suggest a potential legal battle between Twitter and Meta.

What Law Firms Need To Know About Building A Modern And Secure Data Infrastructure (Technology Archives - Above the Law)

Law firms can overcome data management challenges by implementing practical frameworks, according to Jeff Cox, director of content at Unicourt. In an article, Cox emphasizes the significance of creating a data strategy, preparing data beforehand, leveraging the cloud, utilizing data lakes and APIs, and hiring the right personnel. These insights are available in the LawNext Legal Technology Directory's resource library, which offers free articles to assist legal professionals in understanding and evaluating legal technology.

Generative AI In The Law: Where Could This All Be Headed? [Sponsored] (Technology Archives - Above the Law)

The article explores the rising influence of generative artificial intelligence (AI) in the legal sector, using the movie Blade Runner as a reference to emphasize the importance of understanding the benefits and risks of AI. It highlights the results of a survey conducted by Above the Law and Wolters Kluwer, which examines the potential impact of AI in various aspects of the legal industry. The report incorporates perspectives from legal professionals and insights from legal tech experts.

Top Biglaw Firms Targeted In Global Cyberattack (Technology Archives - Above the Law)

Three major law firms, Kirkland & Ellis, K&L Gates, and Proskauer Rose, were among the targets of a recent global cyberattack that impacted over 50 corporations, banks, and millions of individuals. The ransomware group, CL0P, claimed responsibility for the attack and published a list of organizations whose data they had obtained for ransom. The incident exposed the vulnerability of even the most successful law firms to cyber threats, underscoring the need for robust data security measures.

Putting Humans First: Solving Real-Life Problems With Legal Innovation (Technology Archives - Above the Law)

Art Shaikh, founder and CEO of, highlights the need for the legal industry to address end-user problems. He suggests that legal innovation should begin by understanding the human context and empathizing with the challenges faced by individuals and businesses. Shaikh recommends adopting a user-centered approach, utilizing AI technology, simplifying complex legal processes, and prioritizing data privacy and ethical considerations. Ultimately, he asserts that legal innovation should prioritize solving human problems and always remember that the purpose of law is to serve humanity.

Why firms must conquer their data mountain - Part 2 (Legal Technology News - Legal IT Professionals | Everything legal technology)

In this article, Chris Giles highlights the significance of law firms effectively managing their data. He presents five steps that firms should follow to address their data overload, including forming a committee, comprehending their data and its storage locations, creating a retention and disposition policy, implementing the policy, and making decisions regarding data destruction. Giles stresses the importance of involving multiple departments and utilizing software tools to automate the process. He also advises prioritizing high-risk areas and initiating discussions with software vendors in the early stages.

Microsoft launches free AI training as enterprises grapple with skills shortage (Legal Dive - Latest News)

Microsoft and LinkedIn have joined forces to launch an AI training initiative that offers free coursework to enhance access to AI skills. The program covers basic AI concepts and responsible AI frameworks, and participants will receive a Career Essentials certificate upon completion. Microsoft is also providing a trainer toolkit for educators and organizations. The objective is to address the shortage of AI skills in businesses and promote enterprise adoption. Furthermore, Microsoft has introduced a global grant program to train workers on generative AI, emphasizing fair and community-driven implementations. Winners will receive financial assistance and technical guidance from Microsoft and GitHub experts.

Private equity GCs can top $1M in compensation (Legal Dive - Latest News)

According to a report by BarkerGilmore, general counsel (GCs) at private equity firms with over $10 billion in assets receive an average cash compensation of $1.19 million per year. Additionally, 90% of these GCs are eligible for carried interest, with an average expected value of $9 million. The compensation reflects the industry's growth and the increased responsibilities undertaken by legal chiefs. GCs at firms with $1 billion to $9 billion in assets receive an average cash compensation of $625,000, with 81% eligible for carried interest. Chief compliance officers at firms exceeding $10 billion in assets earn an average of $538,000 annually.