How Generative AI is Transforming Enterprise Legal Operations

Gartner projects that enterprise spending on legal software will triple between 2021 and 2025, with venture capital investments in legal tech surpassing $1 billion in 2022. These trends underscore a significant shift in how enterprises view legal operations—no longer as a cost center but as a strategic driver of business growth.

To meet growing demands, legal teams are embracing generative AI (genAI) solutions that elevate efficiency and unlock creative problem-solving capabilities. GenAI tools do more than automate tasks– they analyze patterns and enhance collaboration, helping enterprise legal departments optimize spend analysis, accelerate contract reviews, and streamline document management.

As the market gets flooded with buzzy AI products, it’s important to select a solution that can meet your legal team’s unique needs. Look at how generative AI is transforming the legal tech landscape for enterprise companies in these 3 key functions.

1. Optimize Legal Spend Analysis

Managing and analyzing legal spend is a critical but often time-consuming task for enterprise legal teams. Standard e-billing tools provide raw data but distilling that data into actionable insights often requires significant manual effort. Generative AI speeds this process up by not only analyzing past spend data but also generating clear reports, summaries, and suggestions tailored to enterprise needs.

With genAI-powered legal spend management tools, legal teams can automatically flag unusual billing patterns, such as vendors exceeding approved budgets or inconsistent use of alternative fee arrangements. These tools generate detailed, user-friendly insights, enabling legal professionals to uncover inefficiencies, negotiate better rates, and make data-driven decisions that reduce costs.

GenAI also offers predictive analytics, generating forecasts for future spending based on historical data and real-time trends. These forecasts help enterprises proactively adjust budgets and align with financial goals. Sharing these forecasts with finance departments fosters collaboration, ensures accurate budgeting, and demonstrates the strategic value of legal operations.

2. Accelerated Contract Review

For enterprise companies, timely contract review is essential to closing deals and maintaining compliance. However, traditional review processes often slow down due to manual inefficiencies. Generative AI can transform contract workflows by creating tailored drafts, automating redlining, and suggesting improvements based on previous data and predefined parameters.

Generative AI contract management tools like Onit’s ReviewAI analyze contract templates, clause libraries, and negotiation histories to produce pre-reviewed drafts, highlight missing terms, and flag potential risks. For example, genAI can automatically insert appropriate jurisdictional clauses or suggest redlines to align with a company’s standard playbook.  This minimizes delays in the sales cycle and improves legal accuracy.

Beyond expediting the process, generative AI fosters better collaboration between legal and sales teams. By reducing back-and-forth communication and eliminating bottlenecks, enterprise companies using genAI tools report faster deal closures (51% in this instance) and improved working relationships between departments. According to Onit’s Enterprise Legal Reputation Report, genAI not only accelerates contract turnaround times but also enhances the perception of legal teams as proactive, value-driven business partners.

3. Streamlined Document Management

Companies generate vast amounts of legal documents, from contracts and compliance reports to intellectual property filings. Managing and organizing these documents efficiently is crucial, and generative AI provides an innovative solution by automating categorization, tagging, and file organization while enhancing search and retrieval capabilities.

GenAI-powered document management systems (DMS) use natural language understanding to scan and analyze content within legal files, then generate metadata and labels that make locating documents intuitive and fast. The system improves over time, learning from user behavior and new uploads to create increasingly relevant organizational structures. 

In addition, generative AI enhances knowledge sharing across departments without compromising security. By creating access-restricted document views and summaries, genAI allows teams to access critical information quickly while keeping sensitive details protected. This seamless approach not only reduces the administrative burden on legal teams but also supports collaboration across the enterprise.

Why Enterprises Need Generative AI in Legal Operations

As enterprise legal departments face growing responsibilities, generative AI provides the scalability and creativity needed to meet these challenges head-on. Unlike traditional AI, genAI enhances workflows by creating new workflow options, offering tailored insights, and improving collaboration.

By optimizing legal spend, accelerating contract workflows, and transforming document management, generative AI positions legal teams as strategic business partners capable of driving growth. Embracing generative AI is no longer optional for enterprises aiming to stay competitive—it’s a necessity for sustainable growth in the modern legal landscape.