By enhancing human expertise, speeding up deal cycles, and facilitating predictive risk management, AI is transforming legal operations from a cost center into a strategic business partner. While the legal field has historically been slow to adopt new technologies, the surge of generative AI is now placing legal operations at the forefront of innovation.
In the most recent episode of Legal Leaders Exchange, Jennifer McIver sat down with Dean Sonderegger, the Senior Vice President and General Manager of ELM Solutions, to discuss the transformative power of AI. Dean, who previously led businesses in tax and banking regulatory environments, notes that the legal sector has shifted from "stodgy and trailing" to a leader in technological change. This evolution represents a fundamental shift in how legal departments operate, manage risk, and deliver value to the broader enterprise.
Augmentation, not replacement
Generative AI acts as an assisting tool that automates rote tasks, allowing legal professionals to leverage their training on high-stakes strategy rather than administrative burdens.
When generative AI tools like ChatGPT first appeared, the initial response was often fear of job displacement. This skepticism was fueled by high-profile incidents, such as the New York attorney who filed a legal brief citing nonexistent case law generated by AI. However, Dean suggests the conversation has since evolved and matured.
The industry now views the goal as augmentation. By streamlining workflows, AI enhances the attorney's impact, ensuring that human intelligence focuses on substantive legal work that drives business outcomes. As Dean notes, "It augments the impact of the attorney, as opposed to replaces the attorney."
Strategic efficiency
Strategic efficiency in legal operations measures success by economic impact and speed-to-deal, rather than strictly controlling costs or scrutinizing invoices. While spend management remains critical, AI enables a broader view of efficiency. Dean illustrates this with a corporate legal example:
- If a $450 million deal takes four months to close, the capital sits idle during that time.
- If technology can compress that timeline to two or three months, the business gains faster access to capital and realizes value sooner.
In this context, efficiency accelerates business velocity. This perspective challenges the traditional billable hour model. If law firms invest heavily in AI to deliver results faster, the billable hour may no longer capture the true value of the service provided. This dynamic necessitates a new dialogue between corporate legal departments (CLDs) and outside counsel to ensure that efficiency gains benefit both parties without penalizing firms for working faster.
Data-driven risk management
AI empowers legal teams to analyze vast datasets to identify patterns, predict outcomes, and mitigate risks before they escalate.
The role of data in legal operations is expanding beyond retrospective reporting to prospective risk management. Historically, legal ops teams used data to enforce billing guidelines or track spend against budget. With AI, teams can now perform advanced analysis.
For example, in insurance defense, AI can analyze the fact patterns of claims to identify which matters are likely to escalate in cost or duration. Dean points out that if a legal team knows a specific type of claim tends to "go bad" after a certain timeframe, they can intervene early to mitigate the risk. This shifts the focus from simple cost control to strategic management, empowering the legal department to act as a strategic guardian of the enterprise.
Practical implementation
Dean notes that successful AI implementation requires teams to "begin by beginning. "The key is to get started by targeting specific tasks for automation rather than attempting an all-encompassing transformation. Legal teams should distinguish between high-value and low-value tasks:
- High-value tasks: Reviewing a complex merger agreement requires significant human expertise.
- Low-value tasks: Processing routine service of process notices is necessary but ripe for automation.
By applying AI to these specific, lower-value workflows first, legal departments can demonstrate quick wins and build momentum for broader adoption.
The future of corporate legal success relies on an evolution in how value is determined. In-house teams must articulate their need for strategic efficiency and risk management, while maintaining a track record of positive matter outcomes. By streamlining and simplifying, the legal industry can harness the full potential of AI.
Listen to the full conversation: AI in legal ops: Smarter, simpler, and more strategic
