Why Knowledge Management Is the Real Foundation of AI-Powered Legal Drafting

The Knowledge Foundations of AI-Assisted Drafting

Generative AI is rapidly reshaping legal drafting across Europe Law firms are experimenting with new tools, new workflows and new expectations around speed and efficiency. Yet amid the excitement, a hard truth is becoming increasingly clear: AI does not create value on its own. 

AI systems do not think, reason or understand legal nuance independently. They operate by accessing, processing and recombining existing information. As a result, the quality of AI-assisted legal drafting is directly dependent on the quality, structure and accessibility of the knowledge it draws from. 

Interviewees in the report co-created by The Global Legal Post and LexisNexis consistently emphasise that KM and data foundations are critical if firms want to benefit from AI. Firms that treat KM as a strategic capability are already seeing tangible benefits, including faster drafting cycles, improved consistency and stronger first drafts. 

To realise the full, transformative potential of AI, lawyers need to be willing to share their knowledge, ensuring that AI systems remain current and continue to draw on up-to-date expertise and practical know-how.

We must be more collaborative using intelligence and using AI tools if we want to identify relevant precedents or clauses in seconds,” said Sara Molina, a partner in the legal tech and digital transformation practice at Pérez-Llorca in Spain.

“There are a lot of ways AI can help us, but lawyers must share their knowledge so we can get the most out of the AI systems." (The future of legal drafting report, p.3) 

From document chaos to strategic assets 

Despite years of investment in document management systems, many firms still operate with fragmented knowledge environments. Precedents may exist, but they are often: 

• spread across multiple systems 
• duplicated in slightly different versions 
• disconnected from current legal developments 

Lawyers frequently rely on personal experience or informal networks to locate “the right document”, increasing both inefficiency and risk. The report highlights a recurring frustration among KM leaders: even when a relevant precedent is found, ensuring that it reflects the latest case law or market practice remains difficult. 

AI does not resolve these underlying issues automatically. In fact, when deployed on top of fragmented knowledge, AI can reinforce inconsistencies by reusing outdated or incomplete material at scale. For AI-powered drafting to deliver real value, firm knowledge must therefore be treated as a managed asset, not a by-product of past work. This requires three core principles:

• Centralisation: a single, authoritative source of firm knowledge
• Structure: clear classification, metadata and contextual tagging
• Governance: ownership, review processes and ongoing maintenance

Under these conditions, precedents stop being static documents and become living knowledge assets, continuously informed by practice, experience and legal change.

KM becomes a strategic lever 

Rather than describing a wholesale transformation of KM functions, the report points to a more practical and immediate challenge: ensuring that firm knowledge is current, reliable, and accessible at the point of drafting.

Interviewees repeatedly stress that the issue is not a lack of precedents, but the difficulty of locating versions that reflect the latest legal developments. As a Joana Mascarenhas, leader at Vieira de Almeida (VdA) explains:

“The second challenge is even if we find the right precedent, sometimes it’s not easy to update it according to new case laws” (The future of legal drafting report, p.3) 

To address this, the report underlines the importance of centralised and well-governed knowledge, made available directly within drafting environments, rather than forcing lawyers to search across multiple systems. When access to firm knowledge is closer to the drafting workflow, it becomes more immediately usable, supporting stronger first drafts and more consistent outcomes.

Why this matters now 

According to our last report: “The future of legal drafting”, firms are facing increasing pressure to modernise legal drafting processes, while continuing to ensure accuracy and quality.

“Traditional legal drafting processes can be slow, cumbersome and fraught with potential risk.” (The future of legal drafting report, p.2)