For far too long, legal departments have been considered the slow-moving arm of the business. This presumption is true for many reasons—chief among them the fact that the legal department’s primary role is to balance risk with opportunity. Such responsibility often requires endless hours spent analyzing massive amounts of contract data to forecast potential gains and minimize losses.

But with the advent of generative AI, many processes that slowed down the legal arm of the business can be rapidly accelerated, especially when it comes to an organization’s contract data analysis and management systems. In fact, now that our industry has a much clearer vision of what generative AI can do—and how it can improve contract management workflows—tedious routine tasks that previously took up an exorbitant amount of time can be completed in a matter of minutes. These advancements have major implications for the legal department and its impact on the rest of the organization.

As we begin 2025, three emerging trends point to a future where legal teams will have the insights they need to play an integral role in their organization’s revenue goals. Here’s a look at how these shifts will transform legal work, freeing legal leaders from redundant, time-consuming tasks to focus on big-picture strategies.

1. Modern-day legal teams will be more agile, allowing them to move at the new speed of business

Generative AI has ushered in a new era of contract management strategies. With the right solutions in place, legal teams can become more agile and effective, supercharging productivity in ways that were unimaginable less than two years ago. But before legal teams can take advantage of generative AI solutions that are actually useful versus just being cool, business leaders must be more thoughtful about their AI investments and implementations.

It’s imperative businesses understand and lean into effective data grounding efforts to avoid “garbage in, garbage out” scenarios often associated with the large language models powering today’s more popular generative AI platforms. Data grounding will be a key factor in generative AI’s ability to deliver accurate and high-value outputs within contract management programs. Once teams are able to prioritize their data grounding efforts, tasks that took months to accomplish will be completed in minutes. Generating first drafts, writing clauses based on playbook analysis, searching endlessly for contracts that are often kept in disparate systems—these are just a few use cases where generative AI will drive productivity across legal workflows and processes.

2. Contract data will be recognized as a business-critical asset, unlocking unrealized revenue gains and new levels of growth

Contract data is not only the key to unlocking cost-saving opportunities, it is also one of the largest sources of untapped revenue for organizations that haven’t optimized their contract management programs. From identifying revenue leakage and overspending on vendors to developing more profitable contract provisions and renewal terms, there are a multitude of ways that contract data can drive massive revenue gains. Unfortunately, most CLM platforms fail to provide high-value insights that can move the needle on their organization’s most important goals.

But the tides are turning. Effective enterprise-grade contract AI solutions are changing the game when it comes to how legal teams leverage their contract data. With full visibility into their contracts—along with tools that can automate complex data analysis—forward-thinking legal teams will be able to realize the organization’s contracts as the business-critical asset they are.

Before legal teams can maximize the value of their contract data, it’s imperative that their contract management solutions come equipped with a contract-AI knowledge engine to avoid the “garbage-in, garbage-out” challenges often associated with generative AI tools. It is also important that CLM software includes an AI-powered repository that enables legal teams to expertly organize their contracts and extract key insights from a centralized—and searchable—database. Another key component of an effective contract management platform is ensuring it is not only intuitive, but accessible to stakeholders outside of the legal department, including sales leaders, finance teams, and the procurement department.

3. Enterprise-grade contract AI will allow legal leaders to achieve outcomes that go far beyond the legal department

The introduction of enterprise-grade contract AI technology makes it possible to extend the value of contract data well beyond the legal department. With the right platforms in place, sales, procurement and finance teams will gain access to previously unavailable contract insights that get them closer to their most important goals. Legal teams can turn contract data into revenue drivers, while procurement teams can better manage vendor relationships. Sales can optimize renewal terms within customer contracts and close deals faster, while finance leaders can rely on contract data to identify cost saving opportunities, as well as find—and stop!—revenue leakage.

The reality is now that legal leaders have a more realistic view of generative AI’s capabilities and limitations, they are better positioned to implement processes that maximize the value of their contract data.

One key benefit of the modern-day legal departments will be the ability to create self-service contract management solutions that can be used by business leaders outside of the legal department, including the CFO and head of sales. And that’s the real promise of enterprise-grade contract AI: delivering unhindered access to valuable contract data to the people who can activate it and drive measurable revenue growth.

There’s no question that the future of legal work is undergoing massive shifts. Legal leaders are reconsidering how work gets done and being more intentional about how they integrate generative AI solutions into their workflows. For the teams that are able to capitalize on these shifts—finally able to take full advantage of their contract data—the sky is the limit.

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Justin Schweisberger leads sales, marketing and strategic partnerships for Pramata, a leading end-to-end contract management platform. In this role, Schweisberger sets the company’s global market positioning and forges Pramata’s relationships with some of the world’s top brands.

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Mind Your Business is a series of columns written by lawyers, legal professionals and others within the legal industry. The purpose of these columns is to offer practical guidance for attorneys on how to run their practices, provide information about the latest trends in legal technology and how it can help lawyers work more efficiently, and strategies for building a thriving business.

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Interested in contributing a column? Send a query to [email protected].

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This column reflects the opinions of the author and not necessarily the views of the ABA Journal—or the American Bar Association.

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Baker McKenzie partner sues IRS for documents on partnership audit strategies

By Debra Cassens Weiss

March 20, 2024, 2:10 pm CDT

A lawsuit filed by a Baker McKenzie tax partner is seeking to compel the Internal Revenue Service to disclose documents about its tougher policies for auditing partnerships, other pass-through entities and their owners.

The March 18 suit filed by tax partner George M. Clarke says the IRS has not produced records in response to his Dec. 19 request under the Freedom of Information Act.

Law.com, Reuters and Law360 have coverage.

Among the documents sought is a paper discussed by its author, an IRS employee, at a November 2023 conference sponsored by the ABA Section of Taxation. An article about the employee’s remarks appeared in Tax Notes with the headline “IRS Taking Partnership Audits to New Level.”

The IRS is auditing 75 of the country’s largest partnerships and has sent compliance letters to 500 partnerships, according to the Tax Notes article attached to the complaint. The scrutiny is part of the agency’s increased focus on wealthy taxpayers.

Clarke says in the suit he wants to learn more about IRS practices, “so that I can better represent my clients.”

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Suit accuses Sullivan & Cromwell of employing ‘creative but misleading strategies’ that aided FTX fraud

By Debra Cassens Weiss

February 20, 2024, 4:00 pm CST

A proposed class action lawsuit filed by investors in cryptocurrency exchange FTX accuses Sullivan & Cromwell of aiding and abetting fraud by providing legal services that went “well beyond” usual legal work.

“As the evidence will reveal, S&C lawyers were eager to craft not only creative but misleading strategies that furthered FTX’s misconduct,” according to the Feb. 16 suit, filed in the U.S. District Court for the Southern District of Florida.

Law.com, Bloomberg Law and Reuters have coverage.

FTX founder Samuel Bankman-Fried was convicted in November 2023 on seven counts of fraud and conspiracy a year after the collapse of his company. Another law firm, Fenwick & West, is also facing a suit for its legal work for FTX.

The new suit that alleges Sullivan & Cromwell formed a close relationship with FTX U.S. as its outside counsel after the company hired firm partner Ryne Miller as its general counsel in 2021. The relationship between FTX and Sullivan & Cromwell was so close that Bankman-Fried often worked out of the firm’s New York office, the suit says.

While working as primary legal counsel over a 16-month period, Sullivan & Cromwell billed about $8 million in fees, the suit says. The firm was also hired to manage FTX’s bankruptcy and has since earned more than $180 million for FTX legal matters.

FTX was able to avoid the scrutiny of regulators such as the U.S. Commodity Futures Trading Commission by buying companies that already had the necessary licenses, the suit says. The firm also generated for FTX entities “the appearance of legitimate operations; strict adherence to regulatory obligations; and esteem for legal compliance, which permitted the scheme to grow in scale and persist in duration,” the suit alleges.

The suit alleges civil conspiracy, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, and violation of the civil federal racketeering law.

The alleged RICO enterprise aimed to persuade customers to entrust FTX U.S. and FTX Trading Ltd. with their assets and to conceal misappropriation of customer funds, the suit says. The firm offered legal advice “knowingly, recklessly or with willful blindness to the nature of the RICO enterprise,” the suit says.

Sullivan & Cromwell has previously said its relationship with FTX was limited, and it reported concerns when it learned of problems. It did not respond to requests for comment by Reuters, Law.com and Bloomberg Law. Nor did it immediately respond to an email request for comment by the ABA Journal.

The case is Garrison v. Sullivan & Cromwell.

The investors are represented by the Moskowitz Law Firm.