Massive advances in eDiscovery technology and use-cases
The mission to perfect AI-powered eDiscovery technology will continue, while new use cases will explode. We’re already experiencing this as we begin Q2 2023. eDiscovery technology will likely expand beyond its traditional boundaries as organizations look to leverage its power in areas such as cybersecurity incident response, privacy, information governance, and much more. Businesses and legal professionals will increasingly turn to the unstructured data analytics within eDiscovery to solve a range of challenges around human-generated and AI-generated data.
If you need any evidence of this already taking place, look no further than the explosion of generative AI tools like ChatGPT and DALL-E. These tools are going to be a major focus area for legal practitioners—creating new considerations and use cases for advanced eDiscovery solutions in a variety of situations.
Additionally, the technology underlying Web3 will continue to proliferate and raise complex legal questions, despite the slow rate of adoption of the Metaverse. For example, the conversion of real-world assets into digital ones with NFTs raises questions about the extent that real-world rights carry into augmented or virtual reality. As Metaverse or Web3 devices become less expensive and the user experience becomes more accessible, adoption and legal questions will continue to grow.
Softening of M&A activity
After several years of robust M&A activity, the market is expected to experience a dramatic slowdown in 2023, driven primarily by economic headwinds. If the global economy continues to experience a period of slow growth or uncertainty, it may make companies cautious about making new investments or acquisitions, with the LegalTech space no exception to the rule.
However, while M&A is softening, it will certainly remain relevant. The activity that will take place will be extremely deliberate, strategic, and meaningful to the companies involved. This is good for the industry, as it gives the entire space time to think, rethink, and make well-informed decisions.
Economic headwinds will drive AI-powered innovation in order to do more with less
While the economic uncertainty will likely affect M&A activity for the remainder of the year, it is simultaneously is driving greater adoption of legal technology to control budgets. Challenges in securing tech budgets may lead to corporate legal departments outsourcing to ALSPs that can provide access to the AI-powered tools they may not be able to directly procure in 2023. eDiscovery is expected to see increased use of AI to reduce document review costs in 2023.
The force multiplier effect of legal AI means it may see widespread adoption as practice groups and legal departments must do more with less. Crisis often is the most fertile time for organizational transformation, and 2023 is no different.