As the digital transformation wave continues to ripple across industries, the functions of Legal, Risk, and Compliance (LRC) are undergoing seismic shifts powered by Artificial Intelligence (AI). Among AI technologies, Generative AI (GenAI) emerges as a potent disruptor, uniquely positioned to automate and enhance complex LRC tasks that often require nuanced analysis and multi-variable assessments. GenAI can create data and scenarios based on its training, providing LRC professionals with more robust and versatile tools for decision-making.
According to a survey by Deloitte, 62% of legal professionals expect to increase AI adoption in the coming years. This statistic underscores the growing recognition of AI’s potential to streamline LRC functions. Below are the top ten use cases where GenAI can make a significant impact in the LRC sector, each complete with pertinent statistics and illustrative examples.
Generative AI Use Cases for Legal, Risk, and Compliance
1. Automated Contract Review and Drafting
GenAI can analyze the terms and conditions of various contracts and generate new, optimized drafts automatically.
ThoughtRiver’s AI contract review has reduced the time spent on contract analysis by up to 70%.
According to the Association of Corporate Counsel, automated contract review can decrease legal costs by up to 20%.
2. Real-Time Regulatory Compliance Monitoring
GenAI can continuously monitor for regulatory changes and generate compliance reports, highlighting areas of risk or non-compliance.
HSBC uses AI to automate its anti-money laundering checks, reducing false positives by 25%.
A report by Accenture estimates that AI can cut compliance costs by up to 50%.
3. Dynamic Risk Assessment Models
GenAI can analyze various business scenarios and historical data to create real-time risk assessment models.
KPMG’s CLARA analytics platform helps clients assess risk factors dynamically, improving risk management effectiveness by 30%.
According to McKinsey, AI-based risk assessments can reduce operational risks by up to 20%.
4. Predictive Litigation Analytics
GenAI can evaluate previous case outcomes and generate predictive analytics on potential litigation risks and outcomes.
Lex Machina’s analytics have been used by legal teams to predict case outcomes, achieving a 70% accuracy rate.
Gartner estimates that predictive litigation analytics can cut legal expenses by 10-15%.
5. Intellectual Property Management
Generative AI can generate potential patent applications or analyze existing patents for possible infringement risks.
IBM uses AI to manage its patent portfolio, reducing management costs by 15%.
According to the World Intellectual Property Organization, AI can speed up patent analysis by up to 40%.
6. Fraud Detection and Prevention
GenAI can sift through large volumes of financial transactions to flag potential fraudulent activities.
American Express employs AI in detecting fraudulent transactions, achieving a detection rate that is 20% more effective than traditional methods.
PwC estimates that AI can reduce fraud detection costs by up to 60%.
7. Data Privacy Compliance
GenAI can scan various databases to ensure that personal data is handled in accordance with privacy laws like GDPR or CCPA.
OneTrust’s privacy management software uses AI to assist in data mapping and compliance, reducing privacy-related risks by 30%.
According to IBM, automated privacy compliance can reduce data breaches by up to 25%.
8. Automated Due Diligence
GenAI can perform due diligence tasks for mergers, acquisitions, or partnerships by analyzing voluminous documents and flagging potential issues.
JPMorgan’s COIN AI platform reduced due diligence document review time from thousands of hours to seconds.
KPMG reports that AI can reduce due diligence time and costs by up to 60%.
9. Insider Trading Surveillance
GenAI can analyze internal communications and trading patterns to detect possible insider trading activities.
Goldman Sachs employs AI-based surveillance tools that have led to a 15% increase in the detection of suspicious activities.
According to Accenture, AI-driven surveillance can improve detection rates by up to 50%.
10. Environmental, Social, and Governance (ESG) Compliance
GenAI can analyze various data points to generate ESG compliance reports, helping companies meet sustainability goals and requirements.
Unilever uses AI to track its supply chain sustainability, leading to a 20% improvement in ESG compliance.
A report by McKinsey suggests that AI-driven ESG compliance can increase investment returns by up to 12%.
Generative AI holds the promise to revolutionize LRC functions, offering not just automation but also a qualitatively higher level of analysis and insight. Its ability to analyze, predict, and generate data makes it an indispensable tool in the LRC toolkit for the modern enterprise. Given the legal complexities and risks involved in today’s globalized business environment, the adoption of GenAI in LRC functions is not merely a technological upgrade but a strategic imperative.
These are our top ten generative AI use cases for legal, risk, and compliance. Did we miss any? If so, please share your ideas.