AI in corporate legal departments

AI is already being referred to as the third technological revolution - the rapid development of artificial intelligence (AI) is profoundly changing many areas of the economy and society. AI technologies not only promise to reshape everyday life or processes in companies, they will also revolutionise legal work, for example through the automation of repetitive tasks or the preparation and analysis of extensive documents.

How widespread are AI technologies already used in legal departments of German companies?

On behalf of Noerr this question was put in March/April 2024 to the heads of legal departments in leading German companies from a wide range of industries. In 100 interviews, they were asked about the use of AI in their legal department, its opportunities and risks, and further topics departments needed to know about in this area.

The aim of this survey is to provide CEOs, managers and other decision-makers with a sound basis for assessing the potential of AI use in legal departments as an integral part of a future-oriented legal advisory practice that combines innovation and ethical responsibility.

Selected results include:

• Currently, the potential of artificial intelligence in legal departments is not being fully utilised, with only a quarter of the legal departments surveyed already using AI tools.
• Nevertheless, just over half are planning to introduce AI systems by 2025, with the majority intending to use AI tools to analyse documents and texts as well as for document management.
• Almost two thirds of the legal departments surveyed expect the use of AI to reduce repetitive work, but only 42 per cent expect direct cost savings.
• Two thirds rely predominantly on standard solutions when implementing AI tools, while only 23 per cent want to develop their own tools.
• However, most companies do not yet have a budget for AI tools.
• One reason for this reluctance: two thirds of survey participants believe that the market for legal AI tools is still underdeveloped and complain about a lack of transparency.
• In addition, 42 per cent see AI technologies as a security risk.
• Internally, many legal departments have already provided advice on AI issues, primarily on compliance matters and IP issues, but there is also a growing need in other departments, such as HR.
• Guidelines for the use of AI in the company as well as employee training pose challenges for legal departments: So far only 15 per cent of the companies surveyed have AI guidelines in place.

High demand for advice

The topic of AI is already causing a high utilisation of resources in the legal departments surveyed. AI compliance topics are mostly entrusted to legal departments, less frequently data protection officers or compliance departments

"From the respondents' point of view, the introduction of AI tools is associated with high costs," emphasises study co-author Peter Bräutigam, Partner in the Digital Business department at Noerr. "Above all, many legal departments still have to invest heavily in digitalisation - but this is the prerequisite for a meaningful use of AI." According to the survey, just 43 per cent of legal departments consider themselves to have at least an established level of digital maturity, with only 9 per cent of these having a high degree of digitalisation.

Further risks exist in terms of security - but these often result from the fact that AI is already being used, without established company-wide regulations on its use at the workplace and specifically within the legal department. The use of AI that is tolerated but not regulated by corresponding guidelines is associated with considerable legal risks, for example in relation to data protection, the protection of business secrets or client confidentiality.

Initial results of the survey were already presented at the Noerr Digital Day on 13 May 2024 in Munich. After the survey was completed, the results were summarised and evaluated by an interdisciplinary committee consisting of Peter Bräutigam, Georg Edelmann, Daniel Happ, Christoph Rieken, Daniel Rücker and Pascal Schumacher.

All our findings are available for download here.