Navigating GenAI: A Strategic Guide for Legal Ops Professionals

David Mainiero
April 16, 2024

GenAI brings substantial opportunity, but in the near term, has the potential to throw strategy, in-flight investments, and all bets up in the air. How do you adjust your strategy and roadmap in response?

Factor recently hosted a webinar focused on the decision approaches to adopt right now – the smartest “no regrets” actions in the near term while setting your organization on the right course for successful adoption of GenAI in legal.

Moderated by Factor's Jessica Block, with a panel featuring Casey Flaherty, Co-Founder and Chief Strategy Officer at LexFusion; Donovan Bell, Director of Information and Contract Experience at Intel, and Michael Callier, Global Head of Consulting at Factor, the discussion focused on: 

  • What bets to take, what plans to adjust, and where to stay the course.    
  • Minimizing risks of big-ticket technology mistakes while avoiding the paralysis of misapplied ‘sunk-cost' mentality.   
  • Preparing for and maximizing new opportunities in your legal services operating model.

Here are the key takeaways for legal ops professionals:

Don’t confuse means with ends

A gap is emerging between expectation and execution when it comes to GenAI adoption, tempering excitement with frustration and confusion. Don’t confuse means with ends, investing in too many solutions in search of a problem.

Start with your pain points and build AI deployment into an existing set of problems. Budget and buy-in will naturally follow because there is value associated with solving those problems.

As Donovan Bell from Intel noted: “It’s a great time to be in the field of legal operations because we are not short of demand and need. GenAI only accelerates that expectation. The challenge is: how do you manage those expectations when everything needs to be immediate; everything needs to be fast because of what technology can potentially give us? By taking a step back and being very intentional and strategic.”

Bell advocates a process-centred approach that really ensures legal ops are meticulous in solving the right problems, challenges and prioritizing them in the right manner.

That may mean starting with low effort, but very high value use cases. That’s where a prioritization matrix really comes into effect in intelligently determining where your focus should be.

Think of GenAI as a virtual teammate

At Factor, we think about GenAI as a new teammate. We're at a point where this tool can do quite a lot independently, but will require some coaching, just like any other teammate. But where and how do you put that virtual teammate to work?

When it comes to GenAI adoption, getting started is the hardest part. So don’t start with what the tool can do, start with what do we want it to do.

As Michael Callier, Factor’s Global Head of Consulting, noted, one of the means by which organizations are evaluating (or re-evaluating) technology functionality is through what we call the Innovation Lab.

“The central point of the Innovation Lab concept is to ‘Transform by Doing, Do While Transforming.’ This puts a SWAT team of tech- and GenAI-savvy lawyers to work alongside the organization’s technology providers to test new capabilities – but by doing the actual legal work. Sounds simple and obvious, but to do this effectively, you need some sufficient volume, and you need to be doing the actual real work,” said Callier.

“This allows capturing baseline operations data including, for example, task volume, type, touch-time, cycle-time, and resource utilization, and using improvement data to propose enhancements to the existing operating model or to define a new (transformed) one.

 “This is an impactful way of structuring effective testing of GenAI use cases – among what we now think of as current-generation technology.”

Knowledge governance can lay the foundation for GenAI adoption

At Factor, we encourage clients to ensure that their policies are codified, articulated and accessible to those who need them. And one way to deploy governance effectively is to assign a mechanism for collecting and maintaining certain knowledge artifacts. In the contracting space, for example, this means creating templates, playbooks, and organizing and aligning on certain standards.

To lay the foundation for the data and knowledge that GenAI needs to be successful as a teammate, start now by codifying the knowledge that today resides in the individual brain cells of the legal team. This may take the form of several types of knowledge assets:  templates and playbooks; for example.

Just like your human teammates, GenAI can’t generate good results unless it can tap into the collective knowledge of the organization in a structured way. Investing now in this foundational hygiene and knowledge governance is a “no-regrets” move to make now.

GenAI is an enabler, your knowledge and the knowledge of your legal professionals are the critical components to that enablement.

Prepare for improved legal service models and more budget scrutiny

Legal service models will change for the better, but in the near term, legal teams will be faced with new risks and increased volumes from the business, even as the department explores how GenAI will affect how their own work gets done. The largest near-term impacts of GenAI will be the ability to keep pace with a higher volume and increased complexity of work.

As was highlighted in the webinar, we will see service model innovation, we will see business model innovation, we will see a much higher level of scrutiny on in-house budgets, both from an external spend and a headcount perspective.

The expectation shift is quite real, and it is having a profound impact today, much more profound than the technology itself.

Legal teams:  if you’re not already preparing for this double whammy... get ready!

GenAI can serve as the cornerstone to preserve budget

GenAI is an opportunity to build winning business cases even for the foundational work that otherwise often did not make the cut.

Organizations are now seeing the critical linkage between GenAI deployment and overarching corporate strategy. While there is shared pain around getting sufficient budget in legal operations, most legal organizations are planning a material investment into GenAI – with many planning on reallocating existing budget from elsewhere.

This strategic reallocation signifies an understanding that GenAI serves not only as the cornerstone to preserve budgets but also to address organizational pain points. The upshot?

Budgets will be raided, and therefore the ability to tie into the GenAI initiative budget will generate new momentum to legal innovation – whether foundational and “prior-generation” in nature, or squarely GenAI-focused.

Deliberate direction is key

As GenAI accelerates the pace of change, legal operations professionals will need to choose a direction and move along with it.

As Casey Flaherty from LexFusion noted: “Velocity has two elements, both speed and direction, which means you have to know where you're going. And that's what makes this so hard.”

And herein lies the challenge: Deliberate speed is crucial because, doing nothing is a terrible plan, but trying everything is both impossible and going to lead to an enormous amount of waste. And so, a lot of law departments are going to face a lot of hard choices and have imperfect information when making them.

At the 2024 CLOC (Corporate Legal Operations Consortium) Global InstituteDavid Mainiero moderated a session on ‘Generative AI: Disruption and Adaptation in Legal Operations’. Read the recap here.