The convergence of digitalization and artificial intelligence (AI) is transforming the legal landscape through applications like legal chatbots, virtual legal assistants, e-justice systems, compliance platforms, contract analysis tools, predictive crime analysis, and automated dispute resolution. AI technology, divided into engineering AI and cognitive AI, focuses on creating cognitive systems that can generate outputs like predictions or decisions based on inputs, varying in autonomy and adaptiveness. Despite the benefits, AI legal tech raises ethical, social, and economic concerns, requiring a thorough evaluation of its impact and legal adjustments. This research investigates how legal professionals in both the public and private legal domain use AI technology, identifying the associated legal, ethical, and practical challenges. It outlines the origins of AI legal tech within computational law field, introduces a framework for comparing AI legal instruments, develops a taxonomy of autonomy levels and risk models, addresses related legal and ethical risks, and identifies legal regimes for AI liability.