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Highlights:  RAG is a method of using AI to generate text by first retrieving relevant documents and then using those documents as inputs to the AI. RAG improves the accuracy and reliability of AI-generated text, especially in domains where there is a lot of specialized knowledge, such as law. Legal research tools using RAG should be carefully evaluated to ensure that they are using high-quality data and that the models are being tested and benchmarked for accuracy

 

Once ChatGPT took the world by storm, the legal industry was one of the first professional fields that began to reap its benefits. Why was that? Tapping into the large corpus of text found in documents, contracts, cases and other primary and secondary sources of material was tantamount to striking gold in the Generative AI (GenAI) race for legal research, writing, and more mundane legal tasks.

The use of GenAI backed by domain-specific retrieval-augmented generation (RAG) enables a rich level of nuance and expertise for specialized fields such as law. This is the single biggest differentiator for a more trustworthy and professional-grade legal AI assistant.

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RAG reliability

 

Context and other AI terms

Important concepts and terms need to be defined before even getting to the significance and implications of RAG’s application in legal work.

Artificial Intelligence (AI)

AI is the broader field of developing computer systems capable of human-like intelligence. AI itself is the idea that computers can simulate human intelligence. On the one hand, computers enable the artificial side. On the other hand, algorithms represent human intelligence and hence simulate or imitate intelligence.

Logical behavior, decisions, and rules are at the core of human intelligence. This is where it gets interesting for attorneys and legal professionals since they need to follow a set of rules and make logical decisions in order to practice law effectively.

Similarly, AI algorithms are designed to follow logical rules and make decisions based on data and patterns. This allows AI to perform tasks that would typically require human intelligence, such as problem-solving, learning, and decision-making.

 

Machine learning (ML)

Machine learning is a particular subset of AI that involves training models and computer algorithms to make predictions or decisions without rule-based programming. This allows AI to continuously learn and improve from ingested data to make more accurate decisions similar to how humans learn from experience.

Now to supervised vs. unsupervised learning. Supervised learning involves providing the model with labeled data and desired outcomes, while unsupervised learning involves allowing the model to identify patterns and make decisions on its own. Supervised learning is about predicting values and variables. Unsupervised learning is about unstructured data and making sense of the raw data.

Both approaches have their own advantages and are used in different scenarios depending on the type of data and desired outcome. We can see how and why this affects the legal profession and the debates around legal tasks and even work-product.

Deep learning

Deep learning is a subfield of machine learning that involves training artificial neural networks with many layers (deep neural networks) to perform tasks such as image and speech recognition.

Natural Language Processing (NLP)

Natural Language Processing (NLP) enables computers to comprehend, interpret, and create human language, bridging the gap between computers and human communication.

Generative AI (GenAI)

GenAI is any model that produces flexible outputs — images, text, audio, etc. — as opposed to discriminative AI which deals with classification and regression models. ML has allowed us to understand, hence learn, so GenAI can create. Therefore, GenAI is the technology based on the broader, previously defined terms that enables the ability to generate human-like text, images, and even videos.

 

Large Language Models (LLM)

LLMs form a bridge between our queries and what it generates. While traditional LLMs only deal with text inputs, more recent multimodal models can handle multiple input types like images, video, and audio.

LLMs are trained on large amounts of data — usually on billions of trainable parameters. They are built from deep learning and machine learning models and are made of complicated formulas that predict the next word.

Overall, LLMs have the potential to greatly assist with legal tasks by automating and expediting processes that would typically require human effort. However, it is important to carefully consider the training data and potential biases and hallucinations when implementing LLMs in legal settings.

Retrieval-augmented generation (RAG)

Finally, RAG is the processing of raw data that truly sets a professional-grade LLM apart from others. This process is called grounding in which an LLM is augmented with industry-specific data that is not part of the development process for mass market LLMs.

Rather than having the LLM answer a question based on its own memory, it first retrieves relevant documents from a search engine and then uses those documents as inputs to the LLM in order to ground the answer. For the legal field, it means gathering and preprocessing legal documents and then fine-tuning it for specific tasks such as contract analysis or legal document summarization. This allows for a more efficient and accurate analysis of legal documents, leading to potential time and cost savings for legal professionals.

RAG is therefore widely used to minimize hallucinations. However, the effectiveness of RAG responses is based on the quality of the raw data and the ability to fine-tune the model for specific tasks.

Retrieval of gold-standard legal content

Content is indeed still king, and data is the new gold. However, it’s the quality of that data and how it’s managed that becomes the critical factor.

There are many legal research tools on the market using LLMs. However, legal tech specialists need to ask the right questions and understand just exactly what kind of content sources and training data its LLM retrieves for every query.

Westlaw content

Westlaw has always been the standard for legal research because of its content and proprietary editorial enhancements like the West Key Number System and KeyCite.

In the West reporting system, an attorney-editor reviews each case published. The lawyer-editor finds and summarizes the legal points in the case. These summaries, known as headnotes, are placed at the beginning of the case and typically consist of a paragraph.

Each headnote is assigned a specific topic and key number, and they are organized in multi-volume books called Digests. These Digests act as subject indexes for the case law found in West reporters. It’s important to note that headnotes are editorial aids and do not serve as legal authority themselves.

 

For instance, AI-Assisted Research on Westlaw Precision focuses the LLM on the actual language of cases, statutes, and regulations. It doesn’t ask the LLM to generate text based on the question asked but rather the content it searches. It finds the very best cases, statutes, and regulations to address the question, as well as the very best portions of those cases, statutes, and regulations.

Practical Law content

Practical Law provides trusted guidance, checklists and forms that help attorneys practice law effectively, efficiently, and ultimately with less risk.

The reliability of this data is dependent on the people responsible for its labeling, structure, and annotations.

The team of over 650 legal expert editors are highly qualified and have practiced at the world’s leading law firms, corporate law departments and government agencies. Their full-time job is to create and maintain timely, reliable, and accurate resources to ensure they have a great starting point with their legal matters such as new legal realities, legislative changes, and relevant practice areas.

 

Whether it’s a crisis, an unfamiliar matter, or an ever-evolving issue, they provide comprehensive insight and answers to your “how do I” questions.

RAG reliability

Yet even the gold standard of the most trusted and reliable sources of legal content falls short without a robust testing and benchmarking process. In other words, what constitutes a thoughtful and methodical process to ensure more trust, reliability, and accuracy?

Testing benchmarks

Supervised machine learning designs and implements training on carefully labeled data with known outcomes. This enables the fine-tuning of generated responses that lawyers need in their legal research and drafting.

This is precisely why a Thomson Reuters benchmarking and evaluation team stressed the importance of both retrieval and generation components in legal AI systems.

For a RAG-based system, this means ensuring that the initial document retrieval is accurate and relevant, as it directly impacts the quality of the generated output. Legal tech specialists should therefore thoroughly analyze and weigh the benefits of both RAG and LLM components when considering legal-specific GenAI assistants.

CoCounsel’s Trust Team recognizes the subjective nature of legal tasks and the variability in what constitutes a correct answer. The best way to address this is embodied in their decision to not only test and benchmark, but also release performance statistics and sample tests.

 

The testing process aims to simulate real attorney tasks. These tests are based on insights, customer feedback, and secondary sources. An attorney tester manually completes the test to establish an “ideal response,” which is peer-reviewed.

This ideal response sets the benchmark for passing scores. The Trust Team then uses CoCounsel’s skills to perform the task, generating a “model response” which is compared to the ideal response. Differences are assessed to determine if they render the output incomplete, incorrect, or misleading.

Tests can be failed for various reasons, even if the answer isn’t outright wrong, especially for subjective skills like summarization. Evaluation instructions are developed to align LLM performance with human reviewers.

Four core skills were tested and below are some of the results.

Skill	Pass Rate ¹
Extract Contract Data	98.8%
Review Documents	96.6%
Search a Database	95.6%
Summarize	90.6%

 

¹ Derived from datasets ranging from 89 to 98 test cases. Zero hallucinations were identified among failing tests. Please note that the Summarize skill is inherently subjective, where two attorneys may disagree on the level of correctness of the answer. As such, it is important to highlight that the tests in the dataset for this skill can be failed for many reasons – including where the answer is missing a detail that the tester considers to be a key detail. This does not mean that the answer is outright wrong.

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The team is committed to continually monitor and refine the skills test by manually reviewing failure cases from the automated tests and spot-checking passing samples to ensure the automated evaluation aligns with human judgments.

The entire process underscores the importance of transparency in building trust with users. See the full Legal AI benchmarking results for further reference.

 

Legal terms • precedent • stare decisis

Stare decisis, meaning in Latin “to stand by things decided,” is a legal principle that directs courts to adhere to previous judgments — or judgments of higher or tribunals — as it has persuasive and binding authority while resolving a case with allegedly comparable facts.

There are horizontal and vertical components to the stare decisis concept. Absent extraordinary circumstances, a court that upholds the principle of “horizontal stare decisis” will follow its own earlier decisions (e.g., the Supreme Court follows a legal precedent unless it has become too difficult for lower courts to apply).

On the other hand, vertical stare decisis obligates lower courts to adhere strictly to rulings made by higher or appellate courts within the same jurisdiction as they have persuasive authority.  For example, an appellate court must abide by decisions made by the U.S. Supreme Court, as it is the federal court of last resort with binding authority.

 

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Stare decisis in the US

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Example of stare decisis

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6 important implications of stare decisis

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Notes of possible shortcomings

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What is the difference between precedent and stare decisis?

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More examples: Does the supreme court overturn precedents?

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More research resources

 

Stare decisis in the US

The English common law of the eighteenth century served as the foundation for the idea of stare decisis in American jurisprudence. The English jurist William Blackstone described the English common law precedent doctrine as establishing a strong presumption that judges would follow prior precedents, where the same issues arise in litigation, to promote legal stability, unless such precedents were blatantly absurd or unjust, in 1765.

The American Supreme Court defined the justification for stare decisis as follows in Kimble v. Marvel Enterprises (referenced in the screenshot below): “promot[ing] the even-handed, predictable, and consistent development of legal principles, foster[ing] reliance on judicial decisions, and contribute[ing] to the actual and perceived integrity of the judicial process.”

Justice’s opinion found on Westlaw Precision with CoCounsel

In Cooks v. State it was reiterated that ‘the rule of stare decisis is a wholesome one, it should not be used to sanctify and perpetuate error’. Courts, like individuals, but with more caution and deliberation, must sometimes reconsider what has been already carefully considered, and rectify their own mistakes.’

The stare decisis concept lessens the need for subsequent litigation and further saves the time and energy of the judiciary by preventing it from having to continually decide the same legal question or issue if it has already been decided in another case. It is frequently observed that there is a high potential for bias and arbitrary decision-making when it comes to legal matters. The doctrine of stare decisis forbids judges from acting arbitrarily or biasedly by requiring them to follow existing precedents, so preventing such unwelcome and vicious factors from interfering with fair and reasonable adjudication.

What is an example of stare decisis?

 

1. The Supreme Court applied precedent for insider trading in 2016

Salman v. the United States: Bassam Salman gained access to insider knowledge through his brother-in-law Maher Kara, who worked as an investment banker for Citigroup at the time, and used it to make an estimated $1.5 million.

The Supreme Court judge concluded that insiders do not necessarily need to receive something in return for disclosing business secrets, contrary to Salman’s attorney’s contention that he should only be found guilty if he paid his brother-in-law in cash or kind. Since Dirks v. SEC makes it apparent that a fiduciary obligation is broken when the secret information is offered as a gift, the confidential information given to Salman was deemed a gift based on stare decisis. Salman was consequently found accountable for insider trading.

2. Stare decisis invoked for a dispute between tenants and owner of apartments, but lacked true precedent

Richman Towers Tenants Assn Inc v Richman Towers LLC it was discussed that questions that are simply there in the record but are not brought to the court’s notice or decided upon are not to be regarded as precedent-setting decisions and doesnot have persuasive authority. The principle of stare decisis is never properly applied unless the precise issue has been considered and decided upon by the judicial mind in the case presented as precedent.

3. Stare decisis principles not applied in a case dealing with a death sentence

In State v. Peeler, ROGERS, C.J. concurred that he did not agree with the state’s argument that stare decisis rules should not apply in this particular case. It is undeniable that stare decisis is a fundamental self-governing principle within the judicial branch, which is entrusted with the delicate and difficult task of creating and maintaining a jurisprudential system that is not based upon an arbitrary discretion, even though he concurs that “stare decisis is a principle of policy and not a mechanical formula.”

Stare decisis assures that the law won’t just change randomly and allows society to assume that fundamental beliefs are based on the law rather than on people’s preferences.

 

6 important implications of stare decisis

1. Stare decisis represents the idea that the appropriate rule of law must be decided, as opposed to having to be decided correctly.
2. It fosters predictable, unbiased, and consistent development of legal principles, so the notion of Stare decisis is favored in judicial systems.
3. It also increases reliance on judicial decisions and adds to the actual and perceived integrity of the judicial process.
4. Stare decisis attempts to ensure that the public is directed by previously issued court decisions, through defined rules and principles, in its personal and professional interactions.
5. The notion of stare decisis adheres to the application of decision-making in a consistent and specific manner, which in turn reflects in our legal culture. It is a prima facie presentation of the belief that such decision-making consistency has a normative value in and of itself.
6. By allowing the public to assume that fundamental concepts are anchored in the law rather than in individual bias, the Doctrine of Stare Decisis contributes to the integrity of our legal system and the government in the areas of application and sustainability.

Notes of possible shortcomings

The stare decisis doctrine may result in the retention and spread of some instances that may have been incorrectly decided. Undoubtedly, there are cases where decisions have been made arbitrarily, and because of the doctrine of stare decisis, these cases will be given priority at the expense of a party that has been wronged. The stare decisis theory is also regarded as a philosophy that runs counter to democratic ideals because it gives unelected judges the power to enact law through their decisions.

The stare decisis concept has the potential to seriously impede the general advancement of the law. There must be some logical variation in the approach to the application of the law as society and its beliefs change and as required by each legal question. The doctrine is not static in nature and essentially reflects the idea of “one size fits all.” As a result, stare decisis may have a significant impact on how the law should be correctly interpreted in light of evolving cultural, social, economic, and other conditions.

What is the difference between precedent and stare decisis?

One acts as a model — a precedent, while stare decisis is a principle or rule that requires adherence to the model. Though it might be tempting to think they are synonyms, the terms do not signify the same thing.

Precedent and stare decisis in the case of a lender and borrower

Let’s say there’s a dispute between two individuals, A and B.

• A gave B a certain sum of money with the understanding that she would repay it at a particular date.
• B has defaulted on her obligation and is being uncooperative.
• A is adamant that B repay her and that she additionally pay interest on the long-overdue amount.

This case may be used as a precedent in related cases in the future if they both end up at the Supreme Court and the presiding judge rules that B must pay back her debt but without additional interest. By applying stare decisis, the ensuing precedent will be protected.

To put it another way, the Supreme Court is required by the principle of stare decisis to refer to the A v. B case as a precedent when deciding future cases between a lender and borrower in which the borrower refuses to repay (horizontal stare decisis). Additionally, since the Supreme Judicial decided the case, subordinate courts that are part of the same court system would consider it a precedent.

Does the supreme court overturn precedents?

In Dobbs v. Jackson Women’s Health Organization, the U.S. Supreme Court overturned Roe v. Wade and Casey, ruling that abortion is not one of the personal freedoms guaranteed by the Federal Constitution and relegating the decision to state legislators on abortion laws. It upheld a Mississippi law that forbids abortions beyond 15 weeks of gestation — with exceptions for life and health — which is before the time when a fetus is now typically regarded as “viable” outside the womb.

“The Constitution does not grant a right to abortion. Roe and Casey must be overturned, and the people and their elected officials must once again have the power to control abortion. The court considered whether the doctrine of stare decisis warranted the continued acceptance of Roe and Casey. Starting with the proposition that stare decisis ‘is not an inexorable command‘

and;

“is at its weakest when we interpret the Constitution,” the court noted that in matters of constitutional interpretation “we place a high value on having the matter settled right,” such that “in appropriate circumstances we must be willing to reconsider and, if necessary, overrule constitutional decisions.”

Source: National Library of Medicine

 

Similarly, the landmark judgement of 1954 Brown vs Board of Education,  overruled against the longstanding ‘separate but equal’ doctrine established in Plessy v. Ferguson (1896), which permitted legalized segregation. The judgement declared that ‘separate educational facilities are inherently unequal’ while recognizing that segregation inflicted harm upon African American children, denying them equal educational opportunities.

The recent Supreme Court decision in Loper Bright Enterprises v. Raimondo ended Chevron deference, which once required courts to defer to federal agencies’ interpretations of ambiguous laws. Now, courts have more power to interpret statutes independently, even if agencies disagree. However, previous cases decided under Chevron deference remain upheld under the principle of “statutory stare decisis.”

By the principle of stare decisis, the Supreme Court upholds precedent unless there is a “particular rationale” or at the very least “strong grounds” to do otherwise. By choosing this strategy, the Court has rejected a more formalistic interpretation of stare decisis that would have required it to uphold its earlier rulings regardless of their merits or the real-world effects of upholding or overturning precedent.

The Court, however, views the principle of stare decisis as a discretionary “principle of policy” that must be weighed and balanced along with its opinions on the merits of the prior decision and several practical considerations when deciding whether to retain precedent in interpreting the Constitution or whether to hear a case. The Court has stated that its precedents are entitled to respect and deference. If the Court can separate the law or facts of a prior decision from the case in front of it or, instead, limit the holding of the prior decision so that it is inapplicable to the current case, it may be able to avoid having to decide whether to overrule precedent.

More research resources

The following resources from Practical Law and Westlaw may be useful for further research about related terms and legal matter, including cases and statutes.

Practical Law resources

 

Westlaw resources

 

 

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Disclaimer

The content appearing on this website is not intended as, and shall not be relied upon as, legal advice. Although this content was created to provide you with accurate and authoritative information, it was not necessarily prepared by attorneys licensed to practice law in a particular jurisdiction. It is general in nature and may not reflect all recent legal developments. Thomson Reuters is not a law firm and an attorney-client relationship is not formed through your use of this website. You should consult with qualified legal counsel before acting on any content found on this website.

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The 2024 Government Fraud, Waste & Abuse Report shows the challenges and progress in equipping those who protect our public resources. It also highlights successes and challenges. It is a call to keep watching and improving. We need to ensure that government oversight stays solid and effective in the face of changing threats.

The key points include:

• Increased workloads
• Constrained budgets
• Public fund protection
• And outdated technologies that hinder effective program management

The report stresses the importance of enhancing prevention, detection, and investigation processes. Less than half of the agencies have a special budget for fraud prevention tools and often use basic and free investigative resources.

What is the role of GenAI for government agencies?

There is a growing interest in employing generative AI to detect Fraud, Waste and Abuse (FWA) though its practical application is still under exploration. Some agencies are beginning to use machine learning and AI to pinpoint suspicious activities, reflecting a proactive approach to technology adoption. Despite a reported decrease in common FWA occurrences like false claims and fake documents, there is an expectation of an increase in FWA due to AI advancements and economic pressures.

The report underscores efficiency as a crucial success metric, highlighting the ongoing challenge of resource management. Overall, while respondents are more confident about having the necessary tools to address FWA, budget and resource constraints continue to pose significant challenges. The findings indicate a shift in priorities and confidence levels among government workers, showing a more optimistic outlook toward resource availability and tool efficacy in combating FWA.

Why is fighting fraud, waste, and abuse an ongoing challenge for government agencies?

In government oversight, the fight against fraud, waste, and abuse (FWA) is a constant battle that needs to be watched and changed. The 2024 Government Fraud, Waste & Abuse Report highlights the current situation and the challenges for the frontline of this battle. The report discusses government workers’ challenges when managing programs and protecting public money.

These individuals operate under tight budgets that have yet to expand to match the growing demands of their duties. The lack of resources is a big problem, and it’s made worse by old technology that doesn’t keep up with the advanced ways fraudsters use it. Moreover, increasing workloads present a daunting challenge. As the number of tasks increases, the difficulty of managing them effectively also increases. This is especially true when workers need more training to find and stop FWA. Recruitment difficulties also exacerbate the situation, creating gaps in staffing that are hard to fill.

FWA comparing results from the previous year

The report highlights a comparative analysis between the 2023 and 2024 surveys conducted among federal workers. Notably, the 2024 survey had more respondents, increasing awareness and concern regarding Fraud, Waste and Abuse (FWA) issues. This year, 45% of survey respondents expect FWA to increase in the next few years.

This shows that they are not optimistic about fraud and abuse trends. Despite these challenges, there is a silver lining. The report shows that 73% of people who answered in 2024 think they have the tools and resources they need to deal with FWA well, a significant increase from 59% in 2023. This improvement suggests that although the challenges are mounting, so are efforts to equip workers with better tools and resources.

 

This positive change is vital because FWA prevention depends on workers using new tools and resources to find and stop fraud quickly. Workers are more confident because of recent efforts to improve technology and training programs in government agencies. However, the road ahead remains daunting. The expected rise in FWA reveals that despite improvements, there is no room for complacency.

Government agencies must continue to innovate and invest in their workforce and technologies to stay ahead of those who wish to exploit public systems for personal gain. The report calls for a sustained commitment to enhancing the capabilities of government workers through continuous training and technological tool upgrades. It also emphasizes the need for strategic recruitment to fill the existing gaps in expertise and staffing. Agencies must work together and get help from policymakers to prevent fraud, waste, and abuse from growing.

Conclusion

While the challenges are significant, the resolve to fight the FWA is stronger than ever. For a deeper dive into the evolving landscape of fraud, waste, and abuse within government operations and to explore detailed insights into the challenges and advancements in combating these issues, you can access the full 2024 Government Fraud, Waste & Abuse Report to equip yourself with the knowledge needed to effectively address and mitigate the risks of fraud, waste, and abuse in your agency.

 

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All in-house lawyers have this goal: delivering high-quality legal services at lower cost and with better results. Typically, you can solve part of the equation but only at the expense of the other parts. For example, you can get lower costs, but not always higher (or even the same) quality. Moreover, given their workload and other priorities, it’s a challenge for in-house counsel to spend a lot of time trying to solve this problem. 

Enter legal operations, a discipline that focuses on moving the administrative headaches present in all legal departments off of the shoulders of the lawyers and onto those of operations professionals. What started as a whisper a decade or so ago is now a roar. Below I discuss the evolution of legal operations and how in-house counsel can get and stay ahead of the curve. 

The evolution of legal operations

The evolution of legal operations within in-house legal departments has transformed how legal services are delivered and managed, driven by a need for: 

• Increased efficiency 
• Cost control 
• Alignment with business and strategic objectives of the business 

Initially focused on simply managing external legal spend and minor administrative tasks, legal operations have expanded to encompass a wide range of functions within the legal department, including technology adoption, data analytics, project management, and process improvement. This expansion is fueled by advances in legal tech and a growing emphasis on operational excellence as table stakes for any legal department, i.e., enabling legal teams to streamline workflows, reduce costs, and provide more strategic value. From what was once a lower-level job, legal operations professionals often play a critical leadership role in the legal department, bridging the gap between legal and business teams through (i) metrics-driven decision-making, (ii) resource optimization, and (iii) innovation that empowers the legal department to act as a true business and strategic partner – and just a cost center. All of this is evident in a recent Thomson Reuters survey of legal departments: 

What is legal operations?

Legal operations is a person or group of persons who look to take on all of the tasks that do not require a law degree, freeing up in-house lawyers to focus on legal work. This alone is reason enough to develop a legal operations function. When in-house lawyers have time to focus on legal problems and not administrative problems, performance improves as more legal work gets done with more thought and attention (and with less need for outside counsel). On a more granular level, a legal operations team focuses on things that drive efficiency within the legal department by allowing the legal team to operate based on data and not guesses, driving efficiency through metrics. This allows the legal team to “do more with less,” turning what is usually a budget-time slogan into reality.  

 

The legal operations group typically sits within the legal function, usually reporting to the general counsel. It is responsible for the “operations” of the legal department. Operations can mean many different things. Most legal operations groups focus on financial matters because that is where the biggest benefit lies, like getting the legal department on firm financial footing with accurate forecasting and accruals of legal spending and identifying the right firm for the right project at the right price. But there are many tasks that the operations group can perform, and smart general counsel realize this – using the team for everything from financial analysis to strategic planning to data analytics. In some legal departments, the head of legal operations also serves as chief of staff. 

What can it do?

Here is a non-exhaustive list of things a legal operations function can do to enhance efficiency and reduce costs: 

Strategic planning

• Partner with the general counsel and assist with driving her/his vision 
• Create Legal KPI’s and yearly goals for the department 
• Succession planning 
• Create a strategic plan for the legal department 
• Prepare materials for the general counsel to use during yearly reviews 

Financial planning  

• Prepare and set budgets 
• Operate the e-Billing system 
• Accruals and spending forecasting 
• Negotiate (and monitor) alternative fee arrangements 
• Manage outside counsel and other legal vendors 
• Financial reporting (within the legal department and outside the legal department) 
• Create legal department dashboards 

Operational/analytics

• Staffing 
• Data analytics and metrics 
• Find process improvements (including how to “scale” legal services delivery to meet the growing needs of the company) 
• Continuing Legal Education (CLE)/Professional development 
• Attorney licensing 
• Contract management 
• Pro Bono program management 
• Knowledge management 
• Records management 
• Determine legal process improvements 
• Plan legal department meetings, including off-sites and other activities 
• Legal project management 
• Create board of directors presentations 
• Satisfaction surveys (business clients, internal to the department) 

Technology

• Vet, test, and implement new technologies, like generative AI (and train individuals on how to use the various technologies already used by the department) 
• Maintain technology used by the department 

If you add up the time spent per month by in-house lawyers on the tasks identified above, the math becomes clear. There are huge efficiencies and cost savings available for the taking by any size legal department willing to make the investment.  

Why do you hire and how do you get this off the ground?

While many legal operations professionals are lawyers with in-house experience, they do not need to be. Someone with a strong financial background, MBA or CPA, would make an excellent choice. All you really need is someone who is smart, self-motivated, good with numbers, at ease with technology, and a leader. The ability to be extremely knowledgeable about the business of the company is also important. 

One hurdle for creating a legal operations role within a legal department is the naturally conservative nature of lawyers. Most in-house lawyers prefer the status quo and jumping on “crazy new things” is just not the way of most of them behave, especially in an environment where mistakes can reflect poorly on them and the legal team regardless of the often-mouthed assurances from senior management that failure is welcomed within the company as a “learning experience.” That’s rarely how it really works. In the end, it often comes down to math, or, how much money can this group save the company? Show the math, get the person. 

One common question is, “If there is money for an operations role, is that the best way for the legal department to spend those dollars as opposed to, say, another lawyer?” Fair. There is also skepticism about the value of legal operations – does the math really work out? What if my department is small – will I get the same value from legal operations as a mega-sized department? Another roadblock is the age-old question of, “Where do I find the time to work on setting up legal operations when I cannot get to all of the work I already have on my plate?” Finally, and perhaps the biggest obstacle is the lack of willingness by the general counsel to let go of many of these operational tasks, a feeling that if the general counsel is not “in charge” of operating the legal department then they are somehow failing. Delegation is, and will likely always be, the general counsel’s hardest task with legal operations being their ultimate delegation challenge. So, you might ask, why take the risk? In short, because of the payoff in cost savings and efficiency can be huge.  

How do I get started?

If you are just starting out with legal operations, don’t feel like you need to go straight to calculus. Some basic addition and subtraction is just fine when getting your feet wet. In other words, find the easy wins to get things started and to prove the value of the operations role. For example: 

• Implementing e-signature technology 
• Implementing (or enhancing) e-billing, budget tracking and metrics 
• Basic vendor management 
• Enhanced invoice review 
• Strategic planning 
• KPI creation and dashboard management 
• Knowledge capture and management 
• Simple work-flow processing improvement that can pay off big with minimal resources expended 
• Use of generative AI within the department 

Your goal should be to go back to the CEO and/or CFO at six-months and one year later and present your results. The odds are good that they will like what they hear if you focus on the easy stuff first. 

If you think that a legal operations group could help your legal department or want to learn more, there are some great resources to get the process underway. Start with reading the materials on the CLOC and ACC Legal Operations websites. Membership is inexpensive and, even if you’re not a member, there are many free resources available to help you get started. Check out LegalOps.com, a site dedicated to legal operations (and sign up for the free newsletter). The ACC’s seminal Legal Operations: Leading Practices in Implementing Strategy, Leading Change, and Advancing Law Department Excellence is a must have. Lastly, attending a conference dedicated to operations is an excellent and relatively inexpensive way to get caught up. 

Legal operations are not just for mega-size legal departments. The math varies but somewhere between 25% to 50% of in-house legal departments (of all sizes) have created legal operations functions but that number is only going to grow – here in the US and internationally. All in-house legal teams should take a hard look at how a legal operations function would improve service and reduce costs.

If you have access to Practical Law, you have access to many of the resources needed to get a legal operations function off the ground quickly and with maximum benefit. And the Thomson Reuters legal operations archive is a free resource to help you get started.

 

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Legal terms • contract • master service agreement

 

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What is a master service agreement (MSA)?

A master service agreement (MSA) is a fundamental contract outlining the scope of the relationship between two parties, including terms and conditions for current and future activities and responsibilities. There is great value in using these arrangements, especially for entities with multiple agreements pertaining to the same client.   

MSAs are contracts that formulate the basic terms between vendors and clients at the beginning of a business relationship. This initial agreement helps to speed up the negotiation process for future contracts and facilities the project management process, resulting in a more efficient and streamlined process. By establishing these basic terms upfront, subsequent agreements can be more easily negotiated and agreed upon, saving time and money for everyone involved. Due to their ability to simplify the contract negotiation process, MSAs are a popular choice for businesses of all types.  

There are several important considerations when crafting an MSA and creating one can offer many benefits for organizations and individuals looking to bolster the speed and efficiency of their business arrangements and deliverables. They accomplish this by offering a good balance of consistency to a business relationship as well as the flexibility to make changes necessary to adapt to evolving circumstances. To that end, these agreements are especially useful for entities engaged in long-term business relationships with one another.   

The coming sections will explore in detail how these frameworks are crafted, where they are most useful, some specific clauses included in them, and some potential concerns for those who engage with them. Additionally, some examples of existing MSA language and terms are also included for reference.   

What does an MSA accomplish?

As an important document for businesses, an MSA outlines the duties and commitments of all parties involved. This legally binding agreement sets forth the terms and conditions of a service agreement, including services provided, pricing models, payment methods, ownership rights, and more. It functions as a contract between two or more parties to guarantee that essential agreements are in place before any service commences.  

An MSA serves to minimize disagreements by providing an unmistakable description of what the parties can expect from one another. It can also be a limitation of liability or safeguard costs that may result if either side fails to deliver as promised. In some cases, it might include details such as dispute resolution techniques like mediation or arbitration should any issues appear during the course of the agreement.  

MSAs are usually used to lay out the nitty-gritty legalese considerations that are usually of interest to the transactional lawyers working on an agreement, while the subsidiary arrangements and agreements are, generally, more helpful to the operations teams. Having a proper MSA with clearly defined terms and conditions for both parties involved can help offer greater protection against unforeseen risks or losses associated with a service agreement.  

While there is no set rule about what types of entities would best be served to craft an MSA, there are a few that MSAs are used for, such as:

• Software license agreements
• Privacy policies
• Indemnification of a third-party
• How to manage private information, and
• An alternative solution of attorney fees 

It is critical for attorneys handling MSAs to have a firm grasp of the holistic considerations included in an MSA as they can sometimes be challengingly broad. To that end, it is not uncommon for a master agreement to cover disparate, unrelated transactions, so understanding the context of the framework takes on even greater significance for attorneys working in this space.   

Benefits of an MSA  

As an invaluable asset for any business relationship, MSAs offer a range of advantages and benefits that can help improve operations and protect against potential risks. An MSA encourages transparency by outlining the expectations of both parties in writing, allowing them to easily refer back to it, should any issues arise. Negotiations on terms and conditions within the agreement can also be conducted by both parties, giving them more control over how their services are delivered.   

Also, MSAs protect from potential disputes which may arise between the two parties involved in the agreement. They also help streamline operations by providing detailed guidance about how services should be delivered and save time and money due to no longer requiring lengthy negotiations or redrafting contracts every time something changes or needs amending. All of this reduces the chances of costly mistakes being made due to miscommunication or misunderstandings.  

Investing in an MSA proves beneficial as it promotes transparency and flexibility while protecting against expensive disputes. It also helps streamline processes while saving time and money which would otherwise be spent on negotiating terms or redrafting contracts. Therefore, businesses looking to set up a service with another party should highly consider getting an MSA to ensure a successful business relationship going forward.  

 

What are some common risks of an MSA?

When it comes to master service agreements, there are a few potential pitfalls that businesses should be aware of. Some disputes include the injury or death of an employee, property damage, timely communications with respect to requests for business updates, deadlines, payments, product defects, and purported unauthorized charges contributing to allegations of cheating or foul play.   

One of the biggest risks is failing to accurately predict the work required for the project, resulting in misunderstandings over responsibilities and obligations. Additionally, MSAs may not include provisions for cost overruns or scope changes — so any extra services or additional costs must be negotiated separately which can already take up a lot of a party’s time.   

Furthermore, these agreements also rarely provide for dispute resolution or litigation procedures — meaning that disagreements between two parties can become costly to settle. If one party isn’t satisfied with the workload or the result of the work, then parties may accuse each other.

Moreover, service providers could hesitate to accept certain terms due to fears of liability — such as warranties and indemnification clauses which can leave them liable for client losses incurred from their services. It is therefore critical for businesses creating an MSA to consider these risks before signing a contract and take appropriate measures before continuing the contract process. Knowing possible issues ahead of time will ensure both sides are satisfied with its conditions.  

 

Terminating the agreements can become especially tricky, too, especially when there is work in progress under, for example, a statement of work (SOW) associated with an MSA.   

Like any business arrangement or agreement, the success of the relationship will depend on the time and energy put into the details of the work. MSAs are no exception, and with proper diligence, many of the above-stated issues can be avoided before they manifest into something prohibitive. By addressing common risks associated with MSAs upfront, companies have a better chance of avoiding unexpected losses down the line. This helps protect their interests while minimizing potential exposure during negotiations.  

What should be included in an MSA?

MSAs, in general, are a holistic consideration with far-reaching implications. As such, there are several important components to a working MSA. While each agreement will inevitably vary based on a wide range of variables, some examples of existing MSAs do highlight some key characteristics worth considering for those interested in developing such an agreement. 

When constructing an MSA, certain components must be included such as services to be furnished, delivery dates and timelines, payment terms and conditions, indemnification and termination, confidentiality clauses, and intellectual property rights.

All facets of the agreement need to be accurately described in order to ensure accuracy and effectiveness. Any modifications or amendments made to the MSA should be documented so that both parties have access to an up-to-date version at any point throughout its duration. As such, it is essential to ensure that the MSA is accurate and effective in order to protect both parties’ interests. This can be done by including certain elements in the MSA.   

Primarily, the agreement should list the names and addresses of all involved parties so they can be identified if any issues arise. Additionally, it must provide an extensive description of services being provided such as products/services offered, duration, delivery dates, payment terms, etc., allowing both sides to know what to expect throughout the contract’s duration. Next, each party’s responsibilities should also be clearly defined in order to avoid potential misunderstandings or conflicts.  

Payment terms like pricing structure, invoicing details, and payment schedules are also necessary for an MSA; providing clarity on how payments will be handled while avoiding disputes caused by miscommunication regarding payments down the line. Furthermore, clauses specifying governing law and jurisdiction for disputes must be included in order to guarantee legal procedures are followed correctly if a disagreement arises during its term.  

Finally, modifications or amendments need to be noted over time so changes are accounted for; otherwise, businesses risk invalidating existing parts of their agreement which could lead to costly disputes further down the line. Having access to an up-to-date version at all times also prevents confusion about what was agreed upon previously.  

Implementing these components into an MSA ensures transparency between two parties while safeguarding against unexpected risks or losses associated with a service agreement. It additionally encourages flexibility and streamlines operations by giving detailed directions about how services should be delivered throughout its term; ultimately saving money and time while helping foster positive relationships with clients.  

MSA templates and standard documents

A template is a pre-set format of a legal contract that is often used by businesses. Using a template results in saving time and money. Many templates of MSAs are available for a business to use while entering into a contract, based on the type of contract and the obligations of the parties.

General service level agreements

Professional services agreements are used for the engagement of professional services, which may be for a specific project, ongoing services, or an MSA.

 

Service level agreement

Service level agreements (SLAs) are standard documents used in outsourcing agreements to set out service levels. An SLA is often attached either to the Statement of Work (SOW) or the MSA.

 

Marketing service level agreements

Promotion and Marketing Services Master Agreements are used in circumstances where there are multiple promotional and marketing projects for products or services and the company is conducting promotion and marketing activities on behalf of a client. Typical provisions used in this template are related to ownership of deliverables, approval rights, and client account staffing.

 

Master Online Marketing Services Agreements are preferred in agreements involving digital and internet marketing services. The terms of this agreement are often neutral and reasonable and intended to favor both the provider and the recipient of the service.

 

Service agreements by state

Some templates are categorized based on the state of operation and governing law. These templates are more often than not drafted from the perspective of the service provider and not the customer and aim to be reasonable. The templates may be for a specific project, ongoing services, or an MSA.

 

Sale of goods agreements

A Master Sale of Goods Agreement (Pro-Seller) is used in agreements involving the non-exclusive sale or supply of goods. Standard terms include provisions related to ordering procedure, shipment, price, payment, product warranty, etc. This template favors the seller or supplier of goods.

Master Sale of Goods Agreement (Pro-Buyer) is similar to the master sale of goods agreement (pro-seller), with terms and conditions being similar, the only difference being that the agreement is drafted in favor of the buyer.

Case study: ProQuest Company and International Business Machines Corporation 

ProQuest, a Delaware company with its chief offices in Ann Arbor, Michigan engaged in an agreement with the International Business Machines Corporation with respect to an information technology services and products contract. The MSA, posted here via the U.S. Securities and Exchange Commission, provides helpful insights into some of the chief components of a previously drafted MSA.    

Notably, the scope of the agreement, provided in Article I subsequent to the Recitals, offers some particularly critical insights. As such, it established a “contractual framework” for the forthcoming provisions. ProQuest is listed in the document as the “Client Parent” while the International Business Machines Corporation is deemed the “Supplier Parent.”  

The top of the agreement speaks directly to that relationship. It reads:

In order to provide a uniform mechanism for implementing the principles of this MSA, the provisions of this MSA, as between Supplier Parent and Client Parent, shall be applicable worldwide and shall be implemented by Client Parent and Supplier Parent, and their respective domestic and foreign subsidiaries and business units, entering into Service Agreements which incorporate the principles of the applicable provisions of this MSA, modified as may be necessary by reason of local Laws or commercial custom.

 

The agreement then goes on to elaborate on how that relationship would impact subsidiary parties associated with the operative entities and lays out the broader impact of the agreement as it relates to the absence of other “locally appropriate” provisions.   

It adds:

Client Parent and Supplier Parent each acknowledge and understand that their respective subsidiaries are not parties to this MSA and will not be legally bound by the provisions of this MSA unless and until they agree to be so bound. However, during any period and to the extent that a locally appropriate Service Agreement for any such Services is not then currently in effect, Client Parent and Supplier Parent shall each remain obligated to the other for the performance of the respective obligations of Client and Supplier stated herein.

 

Additionally, there are a number of definitions laid out, operational and general provisions, a lengthy list of terms and conditions, exhibits, and schedules.  

More research and drafting resources

MSAs are useful because they allow the parties to make short- and medium-term plans while also speeding the ratification of future agreements. They also outline the terms and conditions of a particular service. It helps to protect both parties involved and ensures that all expectations are met, along with specifying legal procedures in case of a disagreement.

This reality is largely driven by the fact that MSAs create a substantially holistic contract framework that establishes the foundation for all future actions.  An MSA should include all relevant information, such as the scope of service, payment terms, and any other important details. To ensure that an MSA is accurate and effective, businesses should be familiar with the legal requirements for such agreements and should consult with a lawyer if needed. 

Businesses should also consider investing in software that can help them simplify their MSAs. By automating the process of drafting MSAs, businesses can save time by quickly creating templates based on existing documents or customizing existing templates to suit their needs. Additionally, automation software can help minimize errors while ensuring accuracy throughout the entire document.  

 

Originally published by Thomson Reuters on July 10, 2023

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One of the most valuable skills an in-house lawyer brings to a company is the ability to negotiate contracts. While contract negotiation is an important skill, it is rarely taught in law school. Below we will discuss a number of contract negotiation tactics that in-house lawyers can deploy to help the business get more contracts completed in less time and with better terms. 

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Prepare

Preparation is the single most important factor for a successful contract negotiation. If you fail to take the time to properly prepare, you will almost surely get less than you could have otherwise gotten from the negotiation. The time you spend preparing should dwarf the time you spend negotiating with the other side: 

• Know your objectives: What are you trying to accomplish? What issues are important to your client, and which ones are not? What is your “walk away” position? 
• Know your client: Who is the business person you are paired with? What do they need to get a “successful” deal? Equally important is to manage client expectations and keep them realistic under the circumstances.  
• Know the strengths and of your position: Where are your positions the strongest and the weakest? What issues/circumstances run in your favor, and which don’t? 
• Know the other side: Use every resource to get a handle on the people on the other side of the negotiation. What motivates them? How do they negotiate? Do you know anyone who has dealt with them in the past? 
• Get information: Information is power in a negotiation and the side with the better/more information is the side that usually comes out with the better result. 

 

Understand leverage

A key part of preparation is understanding the commercial leverage each party brings to the negotiation. Leverage is the ability to influence the other side to move closer to your negotiating position. Consider how much your side wants or needs the deal and the same for the other side. Evaluate each side’s alternatives if no deal is reached. Determine who is facing time pressure, as patience can be a highly effective negotiation tool. Consider where you or the other side would go for goods or services if a deal cannot be struck. If those alternatives are not as good as the product or service being offered, then some of the commercial leverage will fall to the party offering the product or service. 

Don’t give up control

Resist letting the other side set a pace for negotiation that does not suit you or your team. If you need a break, take a break. If you want to go faster, push ahead. If you think the parties need to meet over the weekend to get a deal, set that out. Similarly, once there is a deal in place, work hard to get control of the first draft of the agreement. Make sure all of the issues and agreements are dealt with in the agreement (if it’s not in writing it is not part of the deal) and fight for language you are comfortable with. Don’t let up until the document is drafted and signed. 

Create a negotiation playbook

For any important contract negotiation, invest the time to prepare a written deal “playbook.” This document will summarize the key issues you face in the negotiation and provide a point-by-point summary of your position and the other side’s position, showing how those positions change over time. You will set out your preferred “landing zone” for each issue along with your “walk away” point, meaning the minimum terms or value you are willing to accept before walking away from the deal. This last point is important; you must always be prepared to walk away from a bad deal. 

Ensure you build room for flexibility during the negotiation, as a “take it or leave it” approach rarely works. The playbook should be regularly updated through each round of the negotiation. A playbook will keep everyone on your side focused on what’s important and will instill negotiating discipline, allowing you to maximize your leverage and strengths and focus on what’s truly important to your side. Here is an example of what a small section of a simple playbook might look like after one round of negotiation: 

Nothing is done until everything is done

Do not try to resolve your issues one point at a time. For example, of the first three issues in a contract negotiation your side may only truly care about one of them. If you fully negotiate all three issues, when you come to issues 18 and 19 — which both mean a lot to your side — you cannot trade issues two and three to get what you want for 18 and 19. Go through all of the issues once and understand generally each side’s position, without fully negotiating each point. Most importantly, do not give something unless you get something for it. Be clear that there is no deal until all issues are agreed to.  

Listen more than you talk

The best way to get information is by listening. The rule of thumb here is to listen 70% of the time and talk the other 30%. Ask them what they want and then listen hard to the answer. Let them explain their point to you and then summarize back what you heard to make sure both sides are thinking about the point the same way. This doesn’t mean you agree, but it will help keep you from missing each other.  

Build a rapport with the other side

It is worth your time to build some type of relationship with the other side during your negotiations. Even if it’s just small talk about family, where you went to school, etc. There is little downside to being friendly. Sometimes during tough negotiations, I would invite my counterpart to step out of the sessions and grab a cup of coffee. We’d talk about the negotiations and things we could do as facilitators to bring the sides together or we just talked about sports or the weather or whatever and used the time to clear our heads. We’d almost always come back to the room with some new ideas.  

Take rational positions

One of the most effective techniques in a negotiation is the ability to show why your position makes sense from a reasoned basis. There should be a reasonable, logical, and valid rationale for what you are asking for, and it should be fair. For example, if you can show that the clause you want to insert around liability caps is “at market” and is “fair” based on the revenue stream of the contract, it is difficult for the other side to refuse to agree. The focus of your negotiation is built on reasoning and logic, and not emotion. Likewise, you need to listen to the other side as they lay out positions and understand whether those positions are market-based, or are industry standard, or are otherwise “fair” under the circumstances. If you disagree, bring facts to bear and not just “I don’t want to do that.” And, if you can, always try to show how what you are proposing works for them or their position.  

It’s not a war

A frequent mistake people make heading into a contract negotiation is to think of it as a “war” where someone has to “win” the day. The basis of a good negotiation is that everyone gets something and if you can help the other side feel like they got things important to them (even if they’re not important to you) it can go a long way to reaching a deal. If you want a war, that’s what the courts are for. Each side will go into the negotiation with strong points and weak points. Don’t overestimate your strong points or underestimate those of the other side. Every once in a while, you come across the “bully” negotiator. This technique rarely succeeds as there are many problems with preconditions and ultimatums and an attitude of “they lose” does not equal “you win.” If you do come across a bully, don’t make it personal. Let them rant and rave and then say either “Are you through and can we start the negotiation now?” or “We’ll come back when you can behave like an adult” and leave. 

Your word is your bond

The one thing you have in your professional career is your reputation. If that gets tarnished, it is very hard to recover. People respect tough, hard negotiators. People despise liars and cheats and will look for the first of many opportunities to “stick it” to them down the road. If you have a reputation for being truthful, living up to your word, and doing what you say you will do, your negotiations will go much better and deals will be easier to reach because there is a level of trust between the parties.  

 

Many experienced contract negotiators have different tools and “tricks” that help them succeed. The above just touches on the basics. You can add and subject or adjust to suit your particular style or the specific needs of the negotiation. There is no “one way” to negotiate but the above are tried and true and work. If you have access to Practical Law, you have many tools at your disposal to negotiate great contracts. They are just a click away. 

 

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Let’s say you’re the general counsel for the buyer in an acquisition. The seller’s team tells you they want a 15% reverse break-up fee if the deal does not close. The seller insists this is standard, but you’re sure this can’t be true. How do you shore up your negotiating position? 

Or perhaps your client, the CEO and Chairman of a company on the verge of going public, says that he doesn’t want to divide power by splitting his role. He has been running the company from the beginning and doesn’t care about the recommendations from the underwriters and the proxy advisory firms. How do you help him see what the standard really is? 

In the past you may have combed through deals manually looking for guidance from the market. Now, you can use What’s Market Analytics to understand the market trends and standards and easily communicate them. The tool is part of Practical Law Dynamic Tool Set with CoCounsel.  

This platform makes it faster and easier for you to access the know-how and guidance of Practical Law. It draws upon artificial intelligence, visualization tools, and the proven expertise of more than 650 attorney editors to help you get the answers you need quickly and expertly apply those answers to a matter. It includes What’s Market Analytics as well as Quick Compare, Knowledge Maps, Interactive Matter Maps,  and Search & Summarize Practical Law. 

Overview of What’s Market Analytics

Attorneys use What’s Market Analytics to quickly research and communicate market trends with visual charts. This tool significantly reduces the time needed to analyze and present similar deals, helping attorneys support their negotiations and other conversations with clear, data-driven evidence.  

By replacing hours of tedious research and formatting with quick access to visually compelling insights, attorneys can understand and communicate trends more effectively. This frees you to spend more time counseling clients and business partners. It also makes the negotiation process faster and more persuasive.  

To use What’s Market Analytics, start on the What’s Market home page. Select your desired deal type from the “Select deal type” menu, then click “Access Analytics.” 

You can choose an Editor’s Pick or create a custom chart. To create your own, click “Create your chart” and follow these steps: 

1. Add Data Points: Click “Add data point,” search or browse for the data, and select the relevant points. For example, select the years 2018-2021 to review deals during a specific timeframe. 
2. Apply Filters: Filter the data to refine your chart further. You can apply multiple filters and remove them as needed. 
3. Customize the Chart: Adjust how the chart displays information, such as using percentages or switching between chart types. 

You can save and share your chart by email, download it, or embed it in a presentation. Charts update automatically with new data fitting your parameters. You can also customize Editors’ Picks using the same tools.  

Figure 1 Instantly create data-driven insights and visualizations with What’s Market Analytics so that you can analyze and share market trends and deal terms in a fraction of the time 

 

What’s Market editors selected six practice areas for the Analytics tool. These are the areas that benefit the most from visualization and include the following:  

• Antitrust Risk-shifting 
• Follow-on Equity Offerings 
• Initial Public Offerings 
• Public Merger Agreements 
• Private Acquisition Agreements 
• Underwriting Agreements 

What’s Market Analytics puts you in the expert seat quickly

Understanding and articulating the market standards for key clauses is critical in transactional matters. Current trends are often the only empirical “evidence” you have to counteract someone’s gut feel, ego, or bluster. Now that you can see the true distribution of terms and conditions across a matter type, you will be better able to counsel business partners and clients and formulate a strategy. And since a picture is worth a thousand words, you’ll be able to make your point even more clearly with the visualization tool. 

You can also use the data, insights, and images to create thought leadership content that will appeal to clients and prospects alike. Blog articles and social media posts about changes in trends are simple to develop when the analysis and visualizations are readily available. With the facts established, you can spend your time providing insight and wisdom about what to do as the standards change. 

What’s Market Analytics helps you quickly and effectively communicate complex market trends using attractive, visual charts. Your clients, business partners, and the people on the other side of the bargaining table will all take notice. You’ll be able to develop stronger negotiating positions, build confidence with your own party, and save time while doing it.  

Ready to stand out with your wisdom on market trends? Find out more about What’s Market Analytics and the entire Dynamic Tool Set with CoCounsel by visiting Discover the Dynamic Tool Set with CoCounsel in Practical Law. You can explore the features, watch additional demonstrations, and consider how these tools can benefit their practice. 

 

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Despite some firms calling employees back to the office, hybrid work is here to stay. According to the 2024 Law Firm Office Attendance Policies Report from Thomson Reuters, fully 85% of large law firms require four or fewer days in the office. Organizations focused on retention should note that satisfied employees are less likely to leave, reinforcing the need for flexible attendance policies. 

Legal professionals are adapting, with many firms adopting a “work from anywhere” model, balancing team attendance with productivity. Both corporate and government legal departments have seen similar increases in flexibility over the past several years.  Legal AI assistants enable lawyers to stay productive anywhere by quickly completing tasks such as document review, data extraction, and drafting correspondence.  

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“Work from anywhere” goes beyond remote work

Work from anywhere is a business model that organizations adopt so they can deliver services and manage teams from any location, using digital-first and remote-first technologies. This approach goes beyond traditional remote work by prioritizing digital solutions over physical ones, allowing legal organizations to enhance both virtual and in-person experiences seamlessly.  

Moving to this model helps organizations access a broader talent pool and experience improved business continuity. They may find greater cost efficiency and scalability through cloud technologies and real estate costs. They are also able to provide a popular perk – working remotely – while maintaining productivity levels.  

While challenges such as legacy systems and data security exist, the shift promises increased productivity, flexibility, and preparedness for future growth. 

A legal AI assistant enables productivity from anywhere

A legal AI assistant, like CoCounsel from Thomson Reuters, is an AI-powered tool designed to help legal professionals handle a range of tasks quickly and accurately. Within a single interface, it can:

• Prepare for a deposition 
• Search a database 
• Review documents 
• Summarize long, complex documents 
• Extract contract data 
• Monitor contract policy compliance 
• Draft correspondence 
• Assemble timelines  

Legal professionals experience significant efficiency gains with legal AI assistants, whether they’re in the office, in transit, or working from home. That’s because a tool like CoCounsel Core can rapidly analyze vast amounts of material. The system takes minutes to complete tasks that would take hours for a human, such as reviewing 100 pages of contract material.  

Additionally, legal AI assistants offer high levels of accuracy, reducing human error in tasks like contract review and extraction. By streamlining repetitive tasks, these tools allow legal professionals to focus on more strategic and client-centered work, ultimately improving productivity, accuracy, and the quality of legal service. 

Here are three ways a legal AI assistant supports a work from anywhere model: 

• Having a sounding board
  Legal professionals often need to talk through ideas or issues with colleagues, but this is hard when the team isn’t in the office. Scheduling a virtual meeting isn’t as convenient as stopping by someone’s office. Attorneys can ask a legal AI assistant to summarize documents or draft deposition questions as a starting point, then check that against their expertise to move forward confidently. 

• Learning the ropes
  New attorneys may struggle without direct access to more seasoned attorneys. A legal AI assistant helps bridge this gap. For instance, it can monitor contract compliance to ensure work product matches the organization’s standards. It can also summarize complex documents, providing insights that help newer associates refine their work. It’s like on-the-spot coaching. 

• Maintaining responsiveness from anywhere
  Remote workers sometimes face scrutiny about productivity. A legal AI assistant helps attorneys respond quickly by summarizing contracts or legal documents and validating the information, saving time compared to manual review. 

The Thomson Reuters report found that more senior attorneys have more flexibility to work remotely than newer attorneys. Equipping the team with a legal AI assistant can be especially helpful for those days when there isn’t a partner to pop in on – even if the new associates are in the office. 

Transform how you learn and deliver your craft

A legal AI assistant is a powerful tool that can help transform the way lawyers learn their craft and deliver results in a work-from-anywhere environment. Lawyers can use them to stay productive and manage their workload seamlessly, regardless of their location.  

When you’re walking out of court, use it to respond to an urgent request for a summary of the implications of a particular legal document. When you’re on the subway, double check that you haven’t missed any important questions in your deposition prep. And at home, use it for perspective and understanding when you don’t have ready access to a colleague. 

 

CoCounsel is the legal AI assistant from Thomson Reuters. Discover our comprehensive suite of AI-powered tools designed to revolutionize the way legal professionals work. 

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Legal work is on the cusp of a major transformation, thanks to the integration of advanced generative artificial intelligence technologies. Legal Tracker, the global leader in spend management solutions for in-house legal departments, is setting new standards for efficiency and productivity in legal departments. Here’s how the GenAI capabilities of Legal Tracker and Legal Tracker Advanced are helping other departments reshape the landscape of legal operations and how you may be able to do the same for your company. 

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What is Legal Tracker Advanced?

Thomson Reuters® Legal Tracker provides world-class spend and matter management, including powerful analytics and unrivaled benchmarking tools, to help legal departments understand, control, and reduce their spending while increasing efficiency. Legal Tracker is a solution built by legal operations experts for legal operations experts and rated as the #1 spend and matter management system globally. In fact, 164 of the Fortune 500 and 343 of the Fortune 1000 are already using Legal Tracker to take complete control of their entire legal landscape, making it the most widely used system of its kind. It’s not just a tool to manage outside counsel spending; it’s a comprehensive solution designed to seamlessly integrate with essential enterprise platforms like Microsoft Outlook and Microsoft Teams. Legal Tracker has been using AI-powered innovations for more than a decade and is a leader in technological innovation for spend management. 

Legal Tracker Advanced adds even more functionality and analytics to Legal Tracker, providing analytics and insights that give you a deeper understanding of your legal spend and allow you to act decisively and quickly based on your data. Consolidated dashboards provide stronger internal and external benchmarking to see the impact of proposed rate increases in real time. Enhanced workflow tools allow users to form proactive strategies for managing rate requests – including powerful automation tools to auto-accept or reject and freeze rates. 

By using AI natural language data processing models, Legal Tracker can systematically catch billing violations that previously could only have been caught with time-consuming manual review, enforcing billing guideline compliance and providing opportunities for even greater reduction of outside counsel costs. 

“Legal Tracker became the backbone of our entire management system for the legal department.”  – Jeff Carr, Senior Vice President, General Counsel, Retired, FMC Technologies

 

AI-driven matter intake

Your department’s legal requests probably come through Outlook and Teams – so your spend and matter management system needs to closely integrate there. Using CoCounsel for Microsoft Outlook, which directly feeds into Legal Tracker, powerful GenAI models based on deep legal experience automatically handle sophisticated scanning, evaluating, and routing of legal requests. So, no request goes unnoticed, and all necessary instructions are included right from the start. By automating these initial steps, legal professionals can dedicate more time to substantive legal work rather than administrative tasks. 

Invoice management enhanced by AI

One of the standout features of Legal Tracker is its ability to transform the invoice management process. The AI-driven system automatically converts non-LEDES invoices to LEDES format, ensuring consistency and compliance with billing guidelines. Furthermore, it detects duplicate line items and flags excessive timekeeper hours, thereby preventing billing errors and promoting financial integrity. 

 

Compliance and billing efficiency

The AI in Legal Tracker also significantly enhances compliance and billing processes. It improves the audit efficiencies of block billing, a common yet often criticized billing practice. By ensuring that billing practices meet stringent standards, Legal Tracker helps legal departments maintain their credibility and avoid disputes over billing. 

“Now we have a single workflow, one process, one route to get timekeeper rates approved and data captured… With very little impact on people’s day to day lives, we get amazing results!  – John Elliot, Manager Legal Operations, Netflix

 

Technological expertise extends beyond AI

Legal Tracker optimizes your enterprise legal workflows with an industry-leading array of APIs to integrate into your existing software infrastructure. If major legal departments use a software package, Legal Tracker probably integrates with it. 

And that expertise is wrapped in enterprise-grade data support and protection, aligned to the strict global security and privacy standards of the world’s biggest banks, security, and defense contractors. Legal Tracker maintains SOC, SOC2, GDPR, and HIPAA compliance, runs Veracode Security scans, updates security libraries monthly, and runs annual penetration tests. To further protect your data, Legal Tracker has a wide choice of global data centers, including US, UK, Germany, Canada, and Australia. 

The power of Legal Tracker Advanced

Legal Tracker Advanced gives budget-stressed legal departments a set of powerful additional tools to understand, manage, and optimize their spend. Consolidated dashboards provide stronger internal and external benchmarking, as well as powerful reporting capabilities for the department and to your C-Suite. Matter pricing and RFPs allow legal departments to enhance their competitive advantage and get the work they need at the right price, supported by the market’s top corporate spend data library. Spend analytics powered by Westlaw help you better manage litigation expectations by leveraging data-driven insights on attorneys, law firms, courts, and judges.  

Conclusion

The spend management power of Legal Tracker Advanced is revolutionizing legal operations by automating routine tasks, ensuring compliance on rates, delivering data-driven spend insights, and turning spend reporting into a powerful management tool. As legal departments continue to face increasing pressures, the efficiencies brought about by GenAI and other spend management technologies are not just beneficial; they are essential. Legal Tracker and Legal Tracker Advanced are at the forefront of this revolution, proving that AI-driven technologies can significantly impact the legal industry’s future. 

Sign up for a demo of Legal Tracker Advanced today – and see how your department can benefit. 

 

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Corporate clients regularly push their firms to contain costs, while still demanding the best advice and service possible. As their budgets have tightened in recent years, while matter volume has continued to increase, their internal pressure to get more for less has been intense.   As a result, it’s clear that may corporate clients have turned to “downsizing” (or “tiering”) the type of firms they use: assigning more work to mid-market law firms as opposed to large law firms, as a means to control costs without compromising on quality. 

Here we look at why this trend is gaining momentum and how mid-sized and smaller firms can capitalize on this opportunity to capture more business from corporate clients.  

Corporate law departments remain cost-conscious…

The rates charged by law firms have been rising for a decade and last year saw another sharp uptick across all segments, with the biggest increases at AM100 firms. Yet cost-conscious clients are pushing back. Some work is staying in-house, but most clients still have more legal work, and more work requiring the specialized expertise your firm can provide, than they can handle. So, what’s the solution? 

Increasingly, one answer seems to be: to give more work to firms that offer exceptional service at a lower cost. Many GCs say they are shifting work to lower-cost firms as part of their cost control strategy, and we can see the reality of this on the ground in figures showing that the rates GCs report paying are not increasing as much as the rates firms report charging, suggesting that some work is moving from more expensive firms to cheaper ones. In addition, while demand for legal services grew by 1.1% across the legal industry last year, AM100 firms posted flat demand growth (0%), the AM200 fared slightly better at 0.6%, and mid-sized law firms enjoyed 2.4% growth in demand for their services.  

…but that’s not all that matters

Given how heavily corporate law departments rely on outside counsel, the stakes are high.  

However, winning more of this work is not simply determined by cost alone. While it’s clearly an important factor, corporate clients still have high expectations of the law firms they use, whatever their size. Key attributes buyers of legal services are consistently looking for include firms that can deliver high quality work efficiently, offer specialist expertise and provide a proactive, personalized service. For example: 

Streamlined communication and collaboration

One way in which firms can differentiate themselves is in the way they communicate with their clients. When we conducted research into what factors make for stellar performance among lawyers, we found that six in ten “stand-out” lawyers embrace a future-forward approach to communication. Though they value face-to-face communications when appropriate, they focus on adapting to their clients’ preferences about which communications channels to use, with the use of collaboration platforms increasing significantly in recent years. 

Collaboration tools enable outside counsel to communicate and interact more seamlessly and efficiently with clients and be more proactive about anticipating their needs and respond to issues, all within that client’s own dedicated, bespoke space. They also make it easier for lawyers to collaborate with colleagues on their team, so they can work in a more streamlined and joined-up manner to optimize client service. 

 

Deepening expertise and intelligence

Expertise is clearly another decisive factor in law firm selection. Mid-sized law firms have been adding to their bench of skills, while larger firms have been reducing associate headcount, but tech solutions can sharpen competitive edge here too. For example, trusted legal research and guidance tools that law firms have relied on for years are starting to be augmented by the power of artificial intelligence (AI) to provide trustworthy answers to legal questions faster. Stand-out lawyers say they exceed client’s expectations by capturing learnings and sharing knowledge via centralized platforms, and exploring the power of generative AI (Gen AI) in a way that is open and clear with clients. 

Technology in general, and AI in particular, offers  law firms a chance to level the playing field with larger competitors by making the way they work both more efficient and more effective. Those firms that embrace these tools should be well-positioned to win work: 57% of respondents to the 2024 Legal Department Operations Index said they consider a firm’s use of technology when deciding which external law firms to use. It’s therefore well worth mentioning in marketing efforts and pitch documents. 

Stronger client relationships

Corporate legal departments today are very choosy. Just one in six have a formal panel of firms, while almost half (46%) say they select firms on a matter-by-matter basis. Against this backdrop, developing strong client relationships is harder – but more important – than ever. By understanding – and adapting to – their specific needs, working smarter and delivering the excellence they expect in a cost-effective manner, smaller law firms can punch above their weight in terms of the value they deliver, and reap the rewards of “downsizing”. 

To learn more about what makes a stand-out lawyer, read our Stellar Performance Report 2024.

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