2024-05-13: Of Legal AI

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Here’s today at a glance:

Long discussion with a senior partner at a major Bay Area law firm:

Takeaways

A) They expect legal AI to decimate the profession

  • Law firms charge by the hour, and generative AI specifically cuts time for many many tasks

B) Unimpressed by most specific legal AI offerings

  • ChatGPT with some prompting is still superior than specific tools

C) Generative AI error rates are acceptable even at 10–20%

  • “ 😂 you should see how dumb associates are, the partners have to correct everything anyway and don’t trust associates fully.”

D) The future of corporate law is in-house

  • They felt lots of work will transition to in-house counsel. No need to hire external firms that charge by the hour when twenty minutes with ChatGPT can get you decent results

  • would personally recommend moving in-house

E) The future of law in general?

  • Good for users in areas of law where services were too expensive for many to afford, e.g., divorces

  • Terrible for juniors entering the profession

  • Trial litigation is likely to remain the only human-only zone

F) Of one large legal AI player

  • They had tested product in January, found it was useless.

  • Just simple prompting directly with ChatGPT gave better results

  • The founders were like, what first-year associates? They don’t understand how law is practiced

  • They’re very well-funded but law firms are struggling to use them

  • Heard most of their revenue is coming from PWC, audit, and compliance work rather than legal

Postscript

I fired the above while the thoughts were fresh, they are AN opinion, not mine. I suspect the actual skills lawyers do have—perseverance, adherence to text, rule-following, rule-bending, re-interpretation, etc.—will be greatly desired in the new AI era. The actual bar-licensed profession? That seems more tenuous.

In some sense, we are about to go through a great era of deskilling and commodification. Manufacturing got rid of artisanal craftsmen, and AI will get rid of artisanal intellectual labor. As industrialists once became great users of machines, the new economy will produce a breed of entrepreneurs who use the surplus of intellectual capital in surprising new ways.

Are there legal niches that remain unexplored? A friend of mine advised a landlord on an American with Disabilities lawsuit. There happens to be a disabled man who drives around Southern California looking for strip malls without proper ramps, then goes into the establishment, buys something, thereby becoming a customer, and then sues under the ADA. The landlord usually settles for $10k+, and then brings the property into compliance.

The consequences of an anxious and newly unemployed cohort of junior associates, now empowered with both knowledge of the law and access to their own AI legal staff, are bound to be a dramatic increase in the use of the law to hunt down such lucrative edge cases.

It might also mean we get more disabled ramps.

Postscript 2

The great thing about Twitter is that you then get immediate feedback on angles that you didn’t even initially think of:

A) Why is ChatGPT still ahead?

B) Maybe the integration issues

C) Hope springs eternal

D) Beware the lawyers!

In order of professions that could be disrupted, lawyers come second… According to some estimates, like 45 per cent of what lawyers do can already be automated at the current level of ChatGPT. All right, so we are currently producing three times as many lawyers in the United States as there are jobs for them. So once half of the jobs go, you will have six times as many lawyers as jobs… These people are going to be very upset. And they’re very smart. They’re well connected. They are ambitious. And they’re good at organising. So this is a recipe for disaster.

Postscript 3

The best response was a detailed one from Cecilia Ziniti, founder of gc.ai, an AI general counsel service.

🏡 In-house - at companies and not law firms - is the best place for legal AI.

We are relatively cheaper and don't bill by the hour. We get more done. We hire and fire firms. CEOs trust us.

As a result, in-house lawyers have grown 7.5x times the rate of other kinds of lawyers the last 25 years. The role of "product counsel" boomed, just like the role of product manager in this time.

Today Google employs 828 "product counsel." That's more than only the biggest law firms.

AI accelerates that trend. Just like lawyers with more context about your business are more useful, so too is AI. Companies will want to own that and have their best judgement lawyers on it.

🏒 PS - I went in-house first in 2002 as a paralegal, then again in 2013 to Amazon when this chart went hockey stick

This was certainly news to me, but it made sense. Lawyers are involved in the rule-based exercise of power, and as tech became big and powerful, more lawyers were required to exercise that power.

The unfortunate fact in all of this is that very few engineers or tech people know how to use lawyers; they exist to point out risk, but it is the domain of the business to choose to accept, mitigate, or avoid it. Career engineers find this ridiculously scary, and hence, you perhaps have one of the many reasons the Google giant now lies ashore, tied down by so many tiny minions.

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