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12 P E E R T O P E E R : I L T A ' S Q U A R T E R L Y M A G A Z I N E | S P R I N G 2 0 2 4 regarding technology, viewing IT and KM as expenses rather than investments. These firms will lack mature frameworks for data storage and governance. While they may utilize AI for research services or document drafting, they won't be able to harness the full potential of their data and will be ill-prepared to assess associated risks. Regarding risk, readiness to adopt AI isn't solely determined by technical and organizational preparedness. The firm's General Counsel and malpractice insurance carrier also play pivotal roles. Some malpractice carriers advise against using AI in client work due to its novelty in the legal sphere. Even if a General Counsel recognizes AI's value, they may find their hands tied by the constraints of the firm's insurance policy. Is your practice group ready? While every firm must assess AI readiness as an organization, different practice areas will encounter unique applications and potential roadblocks when considering whether and how AI should be applied to their work. For example, litigation groups accustomed to leveraging advanced tools like predictive coding to accelerate document review and discovery processes may find generative AI capabilities a logical extension of those efforts. However, even among tech-forward litigation teams, dedicated support staff often utilize and interact with technological tools more than practicing attorneys. On the transactional side, corporate, commercial finance, and regulatory groups routinely comb through high volumes of contracts, SEC filings, and due diligence materials. While contract AI systems are helpful in quickly extracting clauses or visualizing key data points, generative models could potentially streamline or even automate entire drafting workflows from ingesting precedent examples. Commercially available AI-based tools deliver impressive results by automatically generating substantive contract language, annotations, and support memos when trained on suitable examples. The biggest obstacle here is not the technology—it is overcoming lawyer unfamiliarity and skepticism. There is no shortage of AI tools available today, and plenty more are on the way, but whether to use them is a top-down decision, with practice group leaders setting the tone and agenda for their teams. Are clients ready? Just as firms and practice groups differ in readiness to embrace AI, clients are also at varying levels of preparedness. The level of AI knowledge and involvement varies across industries and companies, influencing the expectations placed on legal service providers. For example, clients may expect their law firms to invest proportionately in AI research and implementation in the financial industry, which has invested heavily in AI. Conversely, some clients may prohibit their firms from using AI on their matters due to its perceived novelty or concerns about data privacy and security. Addressing these varying client expectations presents a significant challenge for law firms. They must navigate a delicate balance between embracing AI to remain competitive and respecting client preferences and concerns. This may involve obtaining additional client consent for AI usage, revising engagement letters, and ensuring adequate controls are in place to safeguard client data. Is Information Governance ready? The evolution of Information Governance (IG) from managing paper records to overseeing the entire information lifecycle within a firm or legal department reflects the increasing complexity of data management in the digital age. With the emergence of cloud storage and computing, the boundaries between what lies inside and outside the firm's firewall have blurred. Copilot's access to data within the user's Microsoft F E A T U R E S

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