The legal services industry in the UK has historically been one of the largest in the world, with UK legal industry revenue expected to grow to almost £40bn by 2028. But the sector is in a state of flux as US law firms look to grow market share in the UK and Europe, while a report by Thomson Reuters on the UK legal market suggests it is becoming harder to stand out as legal work becomes commoditised. In addition, a growing number of UK clients are looking to keep more activity in-house to improve efficiency and cost savings.

Multinational, newly merged law firm A&O Shearman is one company innovating to stay ahead – part of its mission is to be the world’s most advanced in its sector. An integral part of this is delivering legal services in new and flexible ways and optimising technology. This drive prompted the organisation to become an early adopter of AI, allowing it to successfully carve out a competitive advantage in a traditional industry.

As David Wakeling, partner and head of A&O Shearman’s Markets Innovation Group (MIG), explains, the company started its generative AI journey in November 2022, when it began trialling a generative AI tool designed for law firms, named Harvey. “As lawyers, we’re extremely focused on risk management. My team and I looked at generative AI, and we quickly realised it was going to be really disruptive for the global legal industry, as well as carrying with it quite a lot of risks.”

When deploying Harvey, Wakeling and his team focused on the governance needed to enable safe deployment. They introduced a feedback loop to understand how lawyers were using the AI tool, as well as to capture any concerns they had or challenges they were experiencing. “We did an incremental rollout, piece by piece, and developed governance around deployment, to ensure that it was done responsibly and in a way that was trustworthy. We made it our objective to roll it out to 2,000 lawyers across 43 jurisdictions by Christmas Eve 2022.”

The feedback from lawyers painted a very clear picture: “We could quickly see that this technology was going to augment, rather than displace the lawyer,” says Wakeling. “AI can ‘hallucinate’ – bringing up incorrect or misleading results – meaning that human decision-making and judgement, tailored to the specific industry sector in which the lawyer operates, is paramount.”

After the successful trial, the technology was integrated into the firm’s global practice, making A&O Shearman the first firm in the world to deploy generative AI at enterprise level.

A productive partnership

This led A&O Shearman to partner with Microsoft and Harvey to develop its own generative AI contract negotiation tool that leveraged its unique company knowledge. “We wanted to create an AI tool for lawyers that streamlined contract review and negotiation, while also managing the risk of hallucinations. We did this by grounding the AI output in high quality ‘benches’ of legal knowledge – in other words, a bank of gold standard precedents. We wanted to make sure the lawyer had a really good work product, which is quality assured,” says Wakeling. The result was ContractMatrix.

Wakeling says lawyers have long worked in Microsoft Word, meaning that they are familiar with the Microsoft environment. “We made ContractMatrix a Word add-in because we wanted it to be operated from the natural workspace of the lawyer. The idea is you hit the app, ContractMatrix opens, and your benches and previous deals are immediately accessible to you. It was so logical to build it in that environment.”

The tool speeds up many manual tasks, associated with drafting contracts, that a lawyer usually undertakes during their working day. “No one went to law school for manual process exercises – this is about enabling lawyers to focus on tasks that require strategic thinking and decision-making,” says Wakeling. “From a business perspective, it’s more productive and more efficient.”

The firm currently has more than 1,000 of its lawyers using ContractMatrix, and Wakeling estimates that the tool saves seven hours on average for each contract review, which is a productivity gain of about 30%. “That’s pretty significant,” he adds.

One of the biggest advantages afforded by ContractMatrix is the ability to access gold standard precedents in seconds. “We can find precedent contracts and bring those up to the screen with a couple of prompts of an AI engine,” says Wakeling. “That is huge for lawyers because the whole legal system is based on precedent, so if you can get the best precedents quickly, that is extremely impactful.”

ContractMatrix runs on Microsoft’s cloud computing platform, Azure, which was an additional pull for partnering with Microsoft. As John O’Donovan, chief technology officer at A&O Shearman, explains, the law firm has a large IT infrastructure and a huge amount of information based in existing data centres. “It’s quite an intimidating job for a law firm to manage and organise such a vast infrastructure; you really need to be in the data centre business.”

Centralising technology with Azure

The opportunity to move its infrastructure into Microsoft Azure’s cloud computing platform enabled A&O Shearman to centralise its technology. “When you build things in an on-premise environment, you have to buy lots of infrastructure, such as new servers, and that restricts you. By moving from on-premise to a cloud environment, you can scale quickly and easily according to your needs.”

This also enabled A&O Shearman to scale ContractMatrix as software as a service for client and wider market use. As Wakeling says, this has presented a unique opportunity for the law firm to differentiate itself with, what is effectively, a new business. “We’re a law firm focused on the deployment of legal AI to clients, with Microsoft as the common infrastructure of delivery. Clients know how to use Microsoft Azure and we can deploy it for clients’ in-house legal functions through that environment, so it is very enabling.”

O’Donovan adds that lawyers rely on Microsoft’s suite of tools – such as SharePoint and OneDrive – in their everyday work, and this creates further opportunities for A&O Shearman to build on that within the wider Azure environment. “Microsoft has really invested in legal technology in the last couple of years, and we see that in the use of other tools like Power BI [a data visualisation tool augmented by AI]. So we can use those platforms to build customised tools and workflows for our firm and our clients – we’re not having to develop them from scratch. We are also able to help Microsoft to make products more relevant to the legal market, so it’s a mutually beneficial partnership.”

A&O Shearman has invested heavily in improving the firm’s technology capability over the years. The company ramped this up when generative AI appeared. “We hired loads of developers and added some data scientists, but we also realised we needed to upskill certain functions,” says Wakeling. “Our risk committee needed to be upskilled, as did some of our board members. All members of our risk committee now consider AI in their day-to-day work.”

The firm’s investment in generative AI touches everyone in the company, from marketing and finance to project managers, and the technology is transforming the business. “AI provides some very generic capabilities, such as using Copilot for Microsoft 365 [a Microsoft AI assistant designed to enhance business productivity] to take and distribute meeting notes,” says O’Donovan. “People used to have to do these things manually, so there are some simple, huge efficiencies being gained.

“But our use of AI now goes all the way through to augmenting the very specific skills and knowledge of our lawyers. ContractMatrix, which was made by our lawyers, for lawyers, is a prime example of this.”

A&O Shearman’s integration of AI has also prompted it to overhaul its graduate recruitment process, chiefly by asking graduates questions around AI, such as how they would write the prompts if they were given a certain research task. “We’re looking at their logic and prompt engineering,” says Wakeling. “And then we’re saying: ‘How do you validate the output and look for errors?’ So we’re asking them for a different skill set right from the beginning of their careers. We’re thinking about what’s going to make graduates good lawyers in the coming decades – it’s no longer about learning by rote; it’s more strategic.”

The innovation doesn’t stop there. Allen & Overy’s very recent merger with Shearman & Sterling has also been enabled by working with Microsoft, helping with the integration of systems and data. For example, O’Donovan cites Microsoft’s cross-tenant synchronisation capability, which allowed A&O Shearman to reroute the two legacy firms’ companies email addresses to the new email domain, as well as manage communication between the two organisations through Teams.

“These technologies have been invaluable in taking two large law firms and bringing them together,” he says. “A lot of work is required in a merger, which usually takes years, but we’ve been able to do some things fairly quickly by taking advantage of these technologies.”

Wakeling and his team are looking at opportunities to apply generative AI beyond contract negotiation, such as to due diligence, litigation discovery and mergers and acquisitions. “That’s where we’re starting to turn our attention,” he says.

A&O Shearman’s unique experience of developing and deploying AI systems also means that a large number of clients have approached it for advice on how to deploy AI safely within their businesses. “Since last summer, we have had incredible demand from clients for our global expertise on the key issues around AI deployment, as well as for advice on AI-related disputes, AI collaboration agreements and AI-focused transactions. Our tech expertise on building and deploying AI systems, unusually, sits at the centre of our AI legal advisory group. This is so valuable as clients want to know what responsible AI looks like in practice.”

Wakeling adds that it is likely that future apps his team develops will be devised in tandem with Microsoft. “It has certainly set a very good precedent for how one of the best tech companies can work very successfully with one of the best law firms.”

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Non-independent content produced as part of a commercial deal with Guardian Labs.

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A pioneer in the insurance comparison industry, today, Confused.com serves millions of consumers a year, helping them find the best prices to protect the things they love, power their homes and finance big purchases. At a time of rising living costs and economic uncertainty, consumers are increasingly seeking informed, trusted advice that enables them to make confident financial decisions. According to Mintel, 73% of UK adults have used a financial comparison website within the past year as they strive to find the best deals on financial products quickly and easily.

In such an aggressive and fast-moving sector, Confused.com must continually deliver a superior customer experience to maintain its competitive edge. This relies on understanding exactly what customers need and why, to ease anxiety so often associated with financial decisions. Being truly customer-centric is reliant on optimising data, as Nick Sharp, director of data and technology, Confused.com, explains: “Delivering a seamless customer journey, enabling real-time interactions, personalised experiences, and offering a range of tooling beyond the price comparison itself is all about being data-led. It’s about making decisions based on data insights.”

Confused.com’s traditional in-house data framework was frustrating this ambition. “When you have an on-premises infrastructure and simple integrations, you are dealing with silos,” says Sharp. “We wanted to bring that together to deliver a more cohesive customer journey. Making financial decisions can be overwhelming – our aim is to reduce that burden as much as possible.”

Working with a trusted partner

This need prompted the company to seek help from long-term partner Microsoft, which also works with many of Confused.com’s partners, giving it peace of mind that the technology company understood how it wanted to enhance customers’ experience. Confused.com chose to migrate to Microsoft’s cloud computing platform, Azure, a solution that enables it to manage and store its data securely, as well as giving it access to multiple applications, services and tools. “Microsoft’s maturity and range of assets made it appealing,” says Sharp. “The cost element was important too, as well as the huge support offered by Microsoft, which made it a very easy six-month migration.”

The migration to Azure, and becoming cloud native, has initiated a culture shift at Confused.com, putting technology at the forefront of the business and allowing it to innovate and challenge the market. “It focused minds on how technology could enable us to go beyond delivering the basic service and actually scale up what we were doing, helping us to derive greater insight and make a bigger difference to customers,” says Sharp. “It has empowered us to position ourselves as thought leaders, and that mindset is driving success.”

Considering Confused.com’s panel of partners was key to the decision. The company’s motor panel alone currently has more than 150 providers, and the numerous data feeds between customers and partners need to be robust and fast. “That was a driving factor for choosing Azure, as well as the ability to experiment, and scale,” says Sharp. “It was also about leveraging cloud technology and Azure’s out-of-the-box and customisable solutions.”

As Sharp says: “If we get the right message to the right customer at the right time, they are so much more likely to buy.” It was this need to deliver exactly what the customer is looking for at any given moment that also attracted Confused.com to Azure. Its generative AI enables companies to quickly build intelligent apps and scale them, training them to work with its customer data. “That is really where we’re seeing the uplift,” says Sharp.

For Confused.com, the technology has supercharged its marketing, improving spend by 10% through data enrichment and personalised offers and recommendations. “That relevance to customers shows we’re getting things right.”

Sharp adds that the integration of AI aligns with the company’s commitment to being a customer champion. “By leveraging AI for personalised services and gaining insights into customer needs, we can continue disrupting the insurance industry for the benefit of our customers.”

After all, people visit Confused.com seeking advice and reassurance. “For example, can we make any recommendations based on the information a customer has provided? If they are actively telling us they are interested in a product, or if there are any nuances we can respond to, we can be extra helpful,” says Sharp. “It allows us to anticipate what customers need and potentially save them even more time and money by alerting them to the most relevant product at the right time and at competitive prices.”

A key part of elevating technology to a more central role was using Azure’s AI capability to automate, freeing employees from repetitive tasks to focus on what Sharp describes as “the more gnarly stuff”. He says: “We can tackle the problems that haven’t been solved for customers – that’s where we can really add value – making that content relevant and personalised, and unearthing insights.”

Sharp adds that the impact of Azure goes beyond the company’s technologists. “All of our employees benefit from AI – ultimately it helps them to do their job better, spending more time helping customers to save money, and adding greater value.”

While use of Azure’s AI tools doesn’t remove the need for human input, Sharp says it is hugely valuable for generating ideas and starting conversations, as well as improving efficiencies. “It allows us to worry less about the infrastructure provisioning and scaling because that is all taken care of. Both AI and the cloud keep us operating at speed and meeting customer demand – that is where it matters and where we want our team spending their time.”

Reaping measurable benefits in the cloud

Since implementing Azure, Confused.com has reduced its analytics lead time by 50%, thanks to improved availability, speed, and richness of data, which is driving informed decisions. This benefits customers directly. “Customers rely on us for timely data products and services, they are not just simply getting a price,” says Sharp. “We are looking at the full customer journey, identifying friction points and experimenting and addressing them quickly, and we are able to swiftly respond to customer feedback.”

The company’s ceaseless drive to add value to customers has also been realised by Azure, allowing the company to introduce cashback and rewards, which are customised incentives rooted in data. “We are now able to give much more back to customers and make sure the experience is optimum,” says Sharp. “That additional capability has been enabled by our migration to Azure.”

Confused.com has big plans to continue building on its partnership with Microsoft and its success with Azure, and Sharp says it will carry on leveraging Microsoft’s latest off-the-shelf components and solutions to solve problems. “It’s a gamechanger knowing we don’t have to build everything ourselves or find our own solutions. We can tap into the expertise of a partner that truly understands our industry.”

He adds that the “ultimate dream” is simplification of the customer journey: “The more we can remove the friction points, the closer we can get to automatic switching. It’s great from a technology stance but it’s also great from a customer stance too. With so many people feeling the pinch at the moment, where people spend their money is important. So for us, saving people time, money and allowing them to make confident decisions, at no cost to them, is now more important than ever.”

Azure’s cloud and AI capabilities are playing a key role in ensuring that Confused.com remains dominant in a fierce market. “It is amazing being fully cloud native, and AI promises to be a very exciting next chapter,” says Sharp.

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Non-independent content produced as part of a commercial deal with Guardian Labs.

Header photograph: Gareth Iwan Jones/The Guardian

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