AI Feeds Demand for Shared Client, Outside Counsel Work Space

AI adoption is spreading into shared workspaces between companies and their lawyers as the next frontier, bringing with it heightened privacy and security concerns.

Companies aren’t just thinking about how they’re using artificial intelligence but how they can use it alongside their outside advisers. Software to enable that shared use, which is in early development by startups, could change expectations around how legal services, and professional services more broadly, are delivered in an AI-enabled world.

The expanded use of generative AI promises faster and closer collaboration between companies and their advisers, legal tech providers say. At the same time, these spaces highlight the privacy and data security questions central to AI use, because more collaboration also means more data is passed between companies and their advisers, said Jon Chan, senior managing director and head of eDiscovery innovation at FTI Technology.

“Law firms, particularly in investigations, disputes, stuff that lawyers do, it tends to be the most sensitive data that the corporate client holds,” Chan said. “And we’re moving data and more data around much more quickly as a need to collaborate increases. So I’d say that that security and data control remains critical.”

Working Together Live

Law firms and their clients are deciding whether to build or buy AI tools. MinterEllison, a major Australia-based law firm, chose to partner with AI startup Legora as an early design partner instead of building collaboration software itself, said Simon Ball, the firm’s managing partner for AI.

“Our core business is being a law firm, and we don’t have the structures and infrastructure to build software at scale and at speed,” Ball said. “And so you really do want to stay in your core business, but you need this capability.”

The more important capability, however, is for in-house teams to collaborate internally, said Cecilia Ziniti, co-founder of GC AI, a startup that makes AI software for corporate legal departments.

“In-house, I collab with my business people 30 times as much as I would ever collab with my outside law firms,” Ziniti said.

PwC sees an opportunity to use technology to create closer relationships with clients, said Toby Popplewell, a partner on its deals team.

“AI is going to be the catalyst for a very different way for advisers to serve their clients,” he said. “And I think if you ask 100 people, you get 100 different answers as to what that could be, but we’re working through that live at the moment.”

As part of that, PwC partnered with Harvey to pilot new features like Shared Spaces. But the accounting firm also has built its own software tools for client collaboration, Popplewell said.

In an acquisition, a shared space would hold human resources, tax, and legal documents relevant to the deal, he said. AI would then empower automated, live updates of things like a shared risk and issues log, Popplewell said.

“What we’re thinking is not just about file storage,” he said.

Collaboration Software

Competitors Harvey and Legora late last year each announced the development of their collaboration tools. They say the platforms allow law firms’ clients to work with the companies’ workflows, file storage, and other features without subscribing to the legal tech platforms themselves.

Firms aren’t just competing on price or quality of their legal expertise, but on how that expertise is delivered.

“To stay on the panel of big corporates, you need to display how you’re leveraging technology,” Legora co-founder and CEO Max Junestrand said.

At the same time, outside firms can help clients innovate by bringing AI directly to legal departments, Ball, at MinterEllison, said.

“They’re expecting us to be at the forefront and the bleeding edge of AI and help them on the journey,” Ball said.

Privacy and Security

Privacy and data security have been a barrier to AI adoption for many companies since the technology’s inception, but those concerns intensify the further you move down the supply chain, FTI’s Chan said.

“Whilst there’s an advantage in these collaboration features allowing people to move at speeds faster than ever before, we have to just not forget the important validation and transparency steps,” he said.

Junestrand said Legora’s portal doesn’t fundamentally change the way law firms guard clients’ privacy. Legora doesn’t train on client data and complies with privacy and security compliance standards like SOC 2, he said.

“Data has been shared between clients and their firms in thousands of different ways, and Legora has from day one been an enterprise-ready product,” he said.

Matt Zerweck, head of enterprise product at Harvey, said the firm has more stringent data permissions than general purpose collaboration tools like Google Drive, recognizing attorneys’ specific privacy and security concerns.

“There will be all the fancy bells and whistles that come after,” Zerweck said. “But if people can’t trust it, it’s not worth basically the first version.”

Bloomberg Law sells legal tech and research tools.