PG has posted quite a number of AI-related items as they impact authors.
To make certain that authors don’t feel singled out, the following article discusses the impact AI is having on practicing lawyers and their support staffs.
From LegalTech News:
With so many antiquated fixtures in the legal industry colliding with new trends like artificial intelligence, data-harvesting and an altered relationship professionals have with their careers, the legal business is ripe for disruption.
But while the disruptive forces are timely, the reasons behind them are familiar: pricing pressure from consumers of legal services and service providers striving to deliver more value at a more competitive price point.
Here are three of the most commonly cited disruptors already underway in legal businesses, according to professionals implementing them who spoke at Legalweek 2023.
Bar Associations May Not Like Alternate Business Models…But Consumers Do
Corporations’ sophisticated use of data to control outside vendor costs is rubbing off on their legal service providers through greater attention to how projects are staffed and monetized.
At the front lines of these innovations in process management are alternative service legal providers and non-standard legal business structures, according to Legalweek panelists, many of whom are themselves leaders at alternative legal businesses.
In the minds of legal service consumers, distinctions between traditional law firms and new-age law firm businesses are breaking down, according to Rachel Zahorsky, managing director of client development at legal service provider Novus Law.
Plenty of resistance remains to the formation of alternative business structures in law, but it’s coming from state bar associations, not consumers, Zahorsky said. She said changes in Arizona and Utah will catch on in other jurisdictions because demand for new ways of accessing legal representation is there.
“Now there is no hesitation about where you fit or where you are [in the legal industry],” she said. “Although all the state bars are resistant, the buyers are all for it.”
Panelists said fee arrangements that differ from traditional hourly billing will play a role in legal departments’ decision-making. Technology has made legal teams so efficient that it’s hard to justify a high number of hours billed at high, four-figure hourly rates, said Stephanie Wilkins, Editor-in-Chief of Legaltech News.
. . . .
George Rudoy, firmwide leader of the legal consulting vertical of Crowe Global, a Swiss verein, said flat pricing is attractive to in-house legal departments because it incentivizes law firms to become more efficient so lawyers don’t work more hours than is profitable for the firm.
“If things are limited to a certain number, efficiency becomes key,” he said.
And contingency fees are attractive to corporations that want their law firm to share in the risk of pursuing a claim, Zahorsky said.
Pedigree Isn’t Everything
Until recently, and still in many corners of the legal industry, long-term relationships determined who got the work and who got hired. That goes for law firms recruiting from law schools and corporations sending work to their trusted counsel.
But panelists said the “rite of passage” for a young lawyer to practice for six years at a law firm before either making partner or heading in house has evolved; indeed, many young lawyers today have transitioned directly from law school to an in-house post, according to panelists. And law firms are diversifying their own recruitment pool to contend with a dearth in LSAT admission in recent years.
Rudoy said one of his favorite clients was a firefighter before becoming a lawyer, and she paid her way through law school by working at the station.
“When I approached her about the delivery of services through project management, it made sense to her because firefighters are all about process,” Rudoy said.
His anecdote highlights not only the growing emphasis on process management as a staple of attorney-client relationships, but he said it’s also a sign of the diversifying routes people can take to becoming a lawyer.
“For the new generation graduating from law school now, the world is open,” he said. “They try out different things. They might not be lawyers for a while. It’s a much more open field that allows lawyers to be more than one thing.”
Staffing for “large scale litigation,” once a question of how many lawyers of various ranks to staff, is becoming something closer to a movie production, uniquely designed for the needs of a specific project, Zahorsky said.
“It’s not going to be same team always. It’s going to be about who has the particular skill set or expertise,” she said. “Staffing is not just about the numbers but who are the specific experts.”
This skill shake up is also taking place between law firms and the corporate clients they serve. Panelists said in-house lawyers are getting choosier about who they send work to rather than reflexively sending work to the firm with whom they have a long-time relationship or from whom they’ve been recruited.
“It’s common for counsel or an associate to have a relationship from the firm they came from and the corporate legal department will lean on that firm for their work, but now they are asking how much are they reutilizing knowledge,” Rudoy said.
“We see corporate entities being much more diversified with their law firms. If they have a smaller case, like an employment issue, they will look for better service for lower fees,” he added.
Artificial Intelligence Will Force Lawyers to Be Tech-Literate
It’s no revelation that data and technology will continue to play a role in the legal profession as lawyers look for ways to anticipate client needs and automate mundane functions. However, previous legal tech trends haven’t caught on the way panelists expect artificial intelligence to.
Wilkins said firms’ use of technology is going to be a differentiating factor for general counsels choosing firms, especially when it comes to artificial intelligence. Unlike other tech trends in law, AI isn’t a fad, Wilkins said, because its potential uses are so broad.
“AI will get legal to not be the tech dinosaur that it’s been,” Wilkins said.
“AI is not replacing lawyers, but lawyers who use AI are going to replace lawyers who do not,” she continued. “You have to be willing to be innovative because your competition is.”
But panelists said emerging legal tech like AI isn’t a magic bullet, and is only as good as the professionals—and processes—deploying them.
“There needs to be the right people to solve those problems,” Wilkins said. “The best tool in the world can’t help anything if you don’t use it and your people don’t know how to use it.”
Rudoy, a former Am Law 50 firm leader, said he once asked how technology would be used in the process of a certain case, to which a partner asked him why he would ask such a question if he’s not in the IT department.
“Knowledge of tech isolated from legal advice or legal advice isolated from the process is a thing of the past,” Rudoy said.
The competitive environment for gaining client business based on evolving standards has led law schools to begin developing classes on legal business management with a tech focus, said Elizabeth Lugones, COO and senior advisor at UpLevel Ops, which consults in-house legal departments. This is a contrast from a sole focus on the “black letter of the law,” Wilkins said, referring to her own legal education.
“You have got to get them young,” said Lugones. “This shouldn’t be the first time you hear about how to manage a budget or what a CLM is. These are critical concepts for lawyers. We need to start earlier. You’re going to start seeing schools offering classes on how you run the business of law.”
Link to the rest at LegalTech News
PG started talking with attorneys in various bar associations about making their practices more efficient using technology in smart ways more than forty years ago.
PG was an early convert to dedicated word processors before the personal computer showed up. His basic premise was, “Why have your secretary/paralegal/assistant type the same thing twice if you can save an electronic file of the document and, with minimal changes to customize that document for the benefit of another client and another one after that, etc., etc. etc.
When the personal computer showed up, PG bought the first one long, long before any other attorney within 200 miles had purchased one. He went through the small number of word processing software products available before he settled on WordPerfect (let us all give a silent prayer for Allan Ashton and Bruce Bastion for this wonderful product, now left to languish after the two founders sold it about 15-20 years later).
At the height of WordPerfect’s popularity with lawyers, Microsoft Word was a retrograde, difficult to use mess that wouldn’t format legal documents without an immense amount of aggravation.
Wordperfect was very handy to use with macros and PG had at least a hundred of them for his law practice. His two secretaries had their own computers with their own favorite macros on their machines.
For some types of documents, PG could finish an initial client interview, escort the client out of his office to sign a retainer agreement and write a check for an initial payment, then go back to his office, create the document and have it printing out on one of the laser printers near his secretaries before the client had left the law office.
With only a handful of exceptions, one of PG’s assistants would contact the client two-three days later to come back to the law office to review and sign the documents that PG had finished printing within 2-3 minutes after they had left his office following their initial conference.
PG performed about 70-80% of his work on a flat-fee basis instead of charging by the hour. His flat fees were typically about 10%-20% lower than the going rate of every other attorney within twenty-five miles of his office.
PG can confidently say that he had a larger income than any of those attorneys because he handled far more clients efficiently than other law offices did and could generate error-free documents because he and his secretaries used computers and top-quality computer programs as something much more than typewriters.
Charging for legal work by the hour was dumb way back when and it is dumb now. Hourly fees reward inefficient attorneys or OCD attorneys (two sides of the same coin). Attorneys typically have a higher rate of divorce than many other professions because they spend way too much time working in their offices instead of with their families.
Since PG is on a retrospective rant, he will also report that he was very popular with the organizers of Continuing Legal Education programs because he always drew a large crowd (each member of which had paid a fee that was always too high to the CLE organizers) to watch PG while he showed them how he used his computer in his law office.
But that’s all ancient history except too many lawyers are still OCD and inefficient.