AI in Corporate Law: Efficiency or Overhead? The Emerging Role of Technology in Negotiations and Document Drafting

The corporate legal landscape in the UK is undergoing a transformation, driven by the rise of AI platforms designed to streamline everything from document drafting to corporate approvals. With more in-house teams and law firms embracing this new technology, AI is fast becoming an integral part of corporate legal practice. But as with all technological advances, there are important questions to consider about its true value, particularly when it comes to accuracy, commercialism, and how it could impact the demand for junior solicitors and paralegals.

AI Tools Transforming Corporate Legal Work

Leading law firms like Allen & Overy, Clifford Chance, and Freshfields Bruckhaus Deringer are already integrating AI into their workflows with platforms such as Kira Systems and Luminance, which are particularly effective in contract review and due diligence tasks. These platforms use machine learning to analyse and extract key clauses from complex agreements, allowing lawyers to work faster and more efficiently. The AI is trained to identify risks, anomalies, and opportunities in contracts, offering a quick snapshot of a document’s contents.

In addition, other major law firms, including Linklaters and Herbert Smith Freehills, have also developed proprietary AI platforms to enhance their document management and negotiation capabilities. These in-house innovations are pushing the boundaries of how corporate law can be delivered more efficiently.

Well known law firms and in-house legal teams are also embracing AI to streamline operations. For instance, Kudocs is a platform gaining attention in the UK market, designed to automate routine legal document generation and filing processes. It offers tools for creating corporate approvals and preparing filings with regulatory bodies such as Companies House, helping legal teams save significant time on administrative tasks. It’s particularly valuable for in-house teams who need to quickly generate routine documents like board resolutions, shareholder approvals, and various corporate governance documents.

Accuracy vs. Practicality: AI’s Limitations in Corporate Law

While these AI platforms boast impressive capabilities, there’s a significant caveat—accuracy doesn’t always translate into a simplified, more cost-effective process. In theory, AI should streamline corporate legal work and drive down costs. However, in practice, the reliance on AI could lead to heavy mark-ups and extended negotiation periods. Why? Because AI, no matter how sophisticated, still struggles with the nuances of real-world negotiations.

For instance, when negotiating complex corporate agreements, AI tools can identify risks or suggest revisions, but they lack the human judgment to understand the broader business context or strategic objectives that underpin a deal. This could lead to overly cautious or incorrect suggestions that require more negotiation time and higher fees to resolve. The reliance on AI in this context may also create an environment where clients are less likely to trust the “quick fix” of automation, leading to unnecessary back-and-forth as human lawyers override the AI’s recommendations.

Moreover, while AI is excellent at handling routine administrative tasks—such as filings and approvals—its involvement in strategic negotiations may sometimes overcomplicate rather than simplify the process. What could have been a straightforward, commercially-driven negotiation might become bogged down by AI’s attempt to standardise or over-elaborate contract terms, leading to delays and inflated costs. In a competitive market, this could shift client expectations, leading to rising legal fees instead of the anticipated cost-saving benefits.

What Does This Mean for Paralegals and Junior Solicitors?

The rise of AI in corporate law does raise a valid concern: Will this lead to a reduced demand for paralegals and junior solicitors? The answer is nuanced. While AI platforms can automate many of the repetitive and administrative tasks traditionally handled by junior lawyers, there will always be a need for human oversight. Paralegals and junior solicitors will continue to play a critical role in managing complex client relationships, interpreting AI’s findings, and applying legal judgment in negotiations. However, their roles may evolve to focus more on higher-level tasks and oversight of AI-driven processes rather than the traditional document drafting or compliance tasks.

Ultimately, AI in corporate law isn’t about replacing jobs—it’s about shifting the value proposition. Junior solicitors and paralegals who embrace AI tools will find themselves empowered to focus on more strategic, impactful work.

Conclusion

AI has the potential to revolutionise corporate law by improving efficiency, reducing administrative overhead, and enabling lawyers to focus on higher-value tasks. However, it’s not without its challenges. As firms and in-house teams continue to adopt these tools, they must be mindful of the limitations of AI and the potential for overcomplicating negotiations or increasing costs. The key to successfully leveraging AI will be finding the right balance between automation and human expertise—ensuring that AI serves as a partner, not a replacement, in the quest for more efficient and cost-effective corporate legal work.

If you would like to discuss any of the matters raised in this article please contact Valeriya Zinchenko.