Top 7 Use Cases of AI in the Legal Industry

Think AI in law is still a novelty? Think again. The number of lawyers using AI has rapidly increased, and the momentum is impossible to ignore. What was once seen as experimental is now becoming essential in everyday legal workflows.

Law firms utilizing AI are leading the way with data-driven insights, increased efficiency, improved ROI, and enhanced risk assessment. AI streamlines workflows to cut down the time spent digging through case files, contracts, and documents, giving lawyers more time to focus on higher-level work and strategic decisions.

Intrigued to see how AI can help your law firm? Check out the top 7 ways legal professionals are using AI below.

7 Most Popular Use Cases of Artificial Intelligence in the Legal Sector

If you work at a law firm, you know how piles of paperwork can make one day feel like a week. But don’t worry! AI is here to help by doing the grunt work for you. Here are seven tried-and-tested use cases of AI in the legal sector to explore. 

1. Legal Drafting

Have you ever spent hours drafting a contract only to discover you missed a critical clause? 

AI accelerates drafting by instantly generating contracts, clauses, and related documents. It ensures precise and accurate legal language, formatting, and references across related documents.

If you want an AI contract drafting tool built especially for lawyers, Spellbook is an ideal choice. What sets it apart from generic AI tools is its ability to comprehend legal language, suggest precise clauses, and identify potential risks instantly in Microsoft Word. It has everything many other legal AI tools offer, plus risk detection and clause refinement for accuracy and compliance.

2. Contract Review 

Contract review is tedious, time-consuming, and prone to human error. AI can nearly eliminate the need for manual contract document review, with accuracy rates of up to 94% versus 85% by human lawyers.  

AI tools can also highlight key points in contracts, enabling lawyers to discover insights they might have otherwise missed. Some tools even flag risky clauses so lawyers know exactly where to focus. For example, Spellbook recommends potential approaches to writing tricky contracting clauses and spots potential contract risks.

With all these helpful features, law firms can save time, reduce errors, and handle complex contracts more easily to make workflows more efficient and reliable.

3. Contract Analysis

AI makes contract analysis much easier by using automation to review numerous documents, highlight key findings, and spot potential risks and errors. This frees time for legal teams to spend on more important tasks, such as advising clients and building arguments.

Spellbook can catch critical details by comparing clauses against templates and relevant legal standards and benchmarks. It instantly spots risky or ambiguous terms, flags one-sided obligations, and detects hidden liabilities. It also identifies potential compliance issues, provides contextual explanations for its recommendations, and suggests alternative wording to strengthen agreements.  

Spotting relevant issues quickly benefits lawyers, especially when identifying nuanced, one-sided clauses that are time-consuming to locate and evaluate.

4. Document Review

Imagine pulling back-to-back all-nighters reviewing legal documents for a case, only to realize you missed a key error, regardless of countless coffee rounds. 

Instead of relying solely on manual efforts, Spellbooks identifies potential legal risks. It is your AI-powered copilot for compliance verification, streamlining contract analysis, and risk assessment in seconds. AI minimizes human errors and speeds up information extraction. These features allow legal professionals to entrust tedious document reviews to AI and focus on more strategic work. 

5. Fraud Detection

AI tools can ensure contracts are aligned with GDPR, CCPA, PIPEDA, and other compliance frameworks to help prevent fraud. AI tools can also help lawyers by flagging altered, missing, or inconsistent contract clauses that don't comply with industry standards or match their preferred precedents. AI can detect unusual phrasing, potential loopholes, or vague terms that may be introduced for fraudulent purposes. 

6. Sentiment Analysis

What if you had the power to know how a jury or judge might react to your argument before you even stepped into the courtroom? You can, with AI. 

AI tools can run simulations of legal scenarios to help detect biases, anticipate emotional responses, and assess the strength of arguments. Humans can sometimes overlook subtle linguistic cues. However, AI can scan thousands of AI legal records in seconds and identify patterns that could affect your case negatively and positively. 

Imagine preparing for a trial with your heart and soul only to see one of the jury members react unexpectedly to your key argument. Why? The wording of your argument triggered a past memory. AI’s sentiment analysis could have flagged this hidden emotional cue in your argument, allowing you to adjust beforehand. AI can help lawyers develop stronger cases by analyzing language patterns and emotional tones.

7. Risk Assessment and Compliance

AI tools streamline legal risk assessments by quickly reviewing contracts, extracting key details, and analyzing nuanced language. They highlight high-risk clauses, inconsistencies, ambiguities, and missing protections, and generate clear, actionable summaries that lawyers can share with their teams.

This process reduces the time spent on manual review, enabling faster and more informed decision-making, especially in fast-moving, high-stakes environments such as corporate transactions or regulatory compliance.

What is Generative AI in the Legal Industry?

Imagine cutting hours of grunt work down to minutes while increasing accuracy. That’s what Generative AI is doing for legal professionals. AI automates document review for law firms and handles complex and time-consuming tasks such as case summaries, contract analysis, and risk assessment.

A recent study reveals that legal professionals primarily utilize generative AI for legal research and contract analysis, tasks that are enhanced by AI’s ability to quickly identify and extract relevant information. Its use for document review is rapidly growing, with 93% expecting to use AI to review documents within the next five years, especially among in-house legal teams adopting AI to streamline workflows.

While humans excel at strategic thinking, AI assists lawyers in research and analysis, making them a powerful team that combines efficiency with expertise.

How Can Generative AI Support Legal Research?

Every lawyer knows how time-consuming legal research is. Research is conducted more efficiently through AI, as it scans vast legal databases faster and finds information more accurately than humans can.

A study from Thomson Reuters found that 64% of law firms use AI for legal research. Other researchers found that 55% of large firms use AI for document review, reflecting the growing impact and legal implications of AI in modern law practices. That’s because AI helps to quickly identify relevant case law and catch issues that may otherwise be overlooked. 

With AI handling the heavy lifting, lawyers get more time to focus on higher-priority tasks, such as strategy building and advising clients. 

Spellbook's AI Solution Transforms the Legal Sector

Spellbook’s AI tool is helping over 3,000 law firms and legal teams make contract work faster and more accurately. It’s a huge time-saver that improves precision. Powered by GPT-4o, the Spellbook app seamlessly integrates into Microsoft Word, making contract drafting and analysis convenient and precise.  

If you’re ready to level up your legal practice and make your day-to-day tasks efficient, give Spellbook a go. It’s designed to fit right into your current workflow, boost your productivity, and help transform how you work with contracts and beyond. 

Book a demo now and see for yourself!

Key Takeaways

• AI helps law firms reduce mistakes, save time, get more accurate results, and work more efficiently.
• Over the years, incorporating AI into the legal field has made an enormous difference for law firms.
• AI is no longer optional in law; it’s becoming a competitive advantage for firms that want to stay ahead in a rapidly evolving legal landscape.

Frequently Asked Questions

Can AI Improve Legal Research Efficiency?

Yes. AI significantly improves legal research efficiency by automating tedious tasks. For example, lawyers at KMSC Law LLP use Spellbook to drastically cut time on drafting and reviewing agreements. One lawyer reduced the drafting of termination agreements from over an hour to minutes. Another quickly reviewed a 300-page franchise agreement, with Spellbook rapidly identifying and highlighting key clauses. These instances show AI condenses hours of manual research and document analysis into minutes, directly boosting efficiency.

Can AI Detect Fraud in the Contract?

Yes. AI can help detect fraud in contracts by utilizing machine learning and natural language processing to flag unusual terms, duplicate clauses, or irregular payment structures that may indicate fraudulent activity.