Survey: General Counsel Expect Significant Increase in Technology Investments and AI Adoption

Global News

31
Jan
2024

Editor

FTI Consulting, Inc. and global legal technology company Relativity today announced findings from part two of The General Counsel Report. The newly released study found that general counsel are placing more emphasis on developing technical acuity and embracing innovation than in previous years, and 75% expect to use generative artificial intelligence in the legal function in the near term.

This edition of the report, which is based on a detailed survey and one-on-one interviews between Ari Kaplan and chief legal officers at large corporations in every major region around the world, examined attitudes and technology implementation plans within corporate legal departments. When asked about their comfort level with generative AI across a range of legal use cases, most general counsel expressed a high degree of support — across all use cases discussed, participants rated their comfort level at a weighted average of 3.2 based on a scale of one (not comfortable) to five (extremely comfortable).

In addition to growing openness toward AI use, 77% of respondents said they have plans to make new technology investments this year, a more than 20-point increase over the previous year’s report. Among those who didn’t have budget earmarked to purchase new tools, some were looking for ways to optimize and enhance existing technology.

“Unsurprisingly, AI was a major topic of discussion in this year’s general counsel report, but more than the excitement around technology innovation was the sense that there has been a distinct shift in the legal department’s attitude toward technology,” said Sophie Ross, Global Chief Executive Officer of FTI Technology. “While lawyers will always maintain a healthy degree of caution, legal department leaders are more focused than ever before on trying new technologies, investing in tools, automating their work and embracing the technological changes that will make them more effective as strategic business partners. I believe this signals a meaningful year ahead in legal tech growth, as well as traction for practical innovations in AI.”  

Key findings covered in Part Two include:

• E-discovery was one area in which general counsel indicated readiness for generative AI solutions, with 80% saying they would be comfortable (nearly one-quarter said “extremely” comfortable).
• More than two-thirds said they were comfortable with the use of AI for compliance monitoring (52% said “very” or “extremely” comfortable).
• General counsel were more open to their internal teams using AI than their outside counsel.
• Respondents emphasized that AI use cases should maintain human oversight, with one respondent saying, “I am also more likely to trust the use of [AI] by someone who is more seasoned because they have the experience to know whether it is a legitimate response. I need a higher level of human discernment when using AI.”
• Contract lifecycle management tools ranked the highest among types of technology legal departments plan to invest in during 2024.
• When asked about the role of automation and advanced technology to alleviate capacity demands and increase retention, 75% said they are considering it, an eight-point increase from the previous year’s study.
• General counsel are heavily involved in making legal technology purchasing decisions for their department, with 55% saying they handle these decisions independent of other stakeholders.

“In what I call the ‘TAR Effect’ — having grown over the 14 years since the Da Silva Moore v. Publicis Groupe judicial blessing of technology assisted review — e-discovery leads the way in artificial intelligence. In this year’s edition of The General Counsel Report, we asked chief legal officers their level of comfort using AI for six different legal tasks. Not surprisingly, e-discovery led the pack,” said David Horrigan, Discovery Counsel and Legal Education Director at Relativity. “We had 92% of general counsel reporting they were at least somewhat comfortable using AI in e-discovery, and over half of them were either very comfortable or extremely comfortable using AI in e-discovery.”

Part Two of The General Counsel Report 2024 is available for download here. The first installment was released in December 2023, and subsequent parts will be released in February and March 2024.

Demographics and Methodology

In July and August 2023, Ari Kaplan personally interviewed 60 leaders serving as the general counsel or chief legal officer of their organizations. Participants were from across North America, Latin America, Europe, the Middle East and Australia, and roughly half work in organizations with more than $500 million in annual revenue.