Tracking Generative AI: How Evolving AI Models Are Impacting Legal

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.

10 thoughts on “Tracking Generative AI: How Evolving AI Models Are Impacting Legal”

  1. The only time this shark has used “hourly fees” have been:

    • When required to by rule, which is all too frequent; the “reasonable fee” in federal court when assessed against the loser (copyright matters, class actions, sanctions, civil rights, employment discrimination… the list goes on) is the “lodestar,” which is defined as “hours expended times the customary and reasonable hourly rate”

    • When specifically requested by the client for consistency with the client’s other matters and billings

    • When, after initial discussion, this shark and the client agree that there are too many variables to make a flat fee appropriate or fair

    This shark’s billing statements, since before the turn of the century, have often looked like hourly billings… but they are based on “units,” such as “number of DMCA notices issued during the preceding quarter” multiplied by the flat rate per notice.

    Hourly billing is for the convenience of corporate and insurer accountants. I don’t know any lawyers who like it.

  2. PG, you and I have similar paths with regard to the transition from IBM Selectrics to dedicated word processors (my first was a Smith-Corona that diplayed six lines of text at a time) to personal computers. (Before all that, my favorite manual typewriter was a Royal portable that folded into its box, then a large, electric Olympia that was somehow clunkier than my little Royal, then those wonderful iterations of the Selectric.)

    Anyway, all of that was to say I couldn’t agree more about WordPerfect. I still grieve over it going away. And while we’re (sort of) on the topic of legacy software, Aldus PageMaker was the go-to desktop publishing software. At one time I was editing and publishing three quarterly little-literary magazines with APM. The glory days. 🙂

    • Which Word Perfect do you mourn?
      It is still available and maintained by Corel. At least for Windows…

      Now, the ATARI, AMIGA, SUN, DATA GENERAL, DEC, and 20 different UNIX versions, those are gone. Along with their platforms. (I had the ATARI version myself.)

      As to Pagemaker, we favored Ventura Publisher on the day job because it was better suited to long format technical papers.

      Wikipedia says:

      “Development of PageMaker had flagged in the later years at Aldus and, by 1998, PageMaker had lost almost the entire professional market[17] to the comparatively feature-rich QuarkXPress 3.3, released in 1992, and 4.0, released in 1996. Quark stated its intention to buy out Adobe and to divest the combined company of PageMaker to avoid anti-trust issues. Adobe rebuffed the offer and instead continued to work on a new page layout application code-named “Shuksan” (later “K2”), originally started by Aldus, openly planned and positioned as a “Quark killer”. This was released as Adobe InDesign 1.0 in 1999.[18][19]

      The last major release of PageMaker was 7.0 in 2001, after which the product was seen as “languishing on life support”.[20] Adobe ceased all development of PageMaker in 2004 and “strongly encouraged” users to migrate to InDesign, initially through special “InDesign PageMaker Edition” and “PageMaker Plug-in” versions, which added PageMaker’s data merge, bullet, and numbering features to InDesign, and provided PageMaker-oriented help topics, complimentary Myriad Pro fonts, and templates.[21] From 2005, these features were bundled into InDesign CS2, which was offered at half-price to existing PageMaker customers.[22][23]”

      Pagemaker is still supported but it only runs on Windows XP. (Riight!) 😉

      Computing is decidedly darwinian.

      • Thanks, Felix. I don’t remember version numbers, etc. but it was the “real” WordPerfect with all the bells and whistles. I’ve seen the dried-out husk Corel uas now. The only similarity with the former version is that it uses words.

        I first learned Aldus PM in college in the early 1990s. Only computer-type course I ever took. Then in the early 2000s I found the British company Serif and bought Serif PagePlus X6 up through X9. Great for designing covers and ostensibly for other DTP applications. I liked X6 best, and recently found and bought a copy on ebay. Serif’s new line includes Affinity Publisher. Easily gives Adobe a run for its money and is a one-time purchase vs. subscription.

        • Ah, yes, Serif.
          I think I have an old copy somewhere.
          Not into DTP these days.
          Even let the old laserjet 5L move on.
          (Those things were seriously overengineered.)

          • No, I’m not doing any DTP myself these days. Thanks for reviving some good memories. Back in the ’90s I edited and published 3 quarterly little literary magazines (The Roswell Literary Review, The Raintown Review: Essay Edition and The Raintown Review: Poetry Edition). I was editing, printing, stapling, cutting (a local print shop had a machine), stamping and mailing around 500 copies of one or the other every month. All with Aldus PageMaker. These days I use Serif to design my covers for my own novels, short stories and collections.

  3. I still remember WordPerfect fondly myself, but there were adequate workarounds (not quite macros) for use with Word and, other comparisons aside, the convenience of the office suite (which briefly Lotus contended for (and I preferred)) inevitably pushed it out. [I was once in an advisory meeting at Microsoft with a group of others explaining why Lotus Notes was superior to their alternatives, and got to watch MS leadership (Steve Ballmer) register our input and nod in satisfaction — the stuff we liked wasn’t the core of the market they were going after and they found our egghead enthusiasm… amusing. Infuriating, but they weren’t wrong economically.]

    Yes, I prefer expert products to convenience, but there’s a tipping point for everything, and if the expert product is no longer reliably maintained (by companies which will reliably continue to exist) then prudence drives a lot of sales.

    • Balmer may have been smiling because he poached Notes creator Ray Ozzie to be Chief Software Architect after Gates. (One thing Balmer got right.)

      Gates gave them MSBASIC, DOS, WINDOWS, Office, Xbox, and NT but Ozzie gave them AZURE which all by itself is out-earning most of the above.

      And now Nadella is building a new wing out of subscriptions and (apparently) GPT.
      Not bad for a company nearing 50.
      Turns out there’s still life in “platforms and tools”.

  4. Oh, WordPerfect! Still on my computer, and I revert to it whenever I’m not using Scrivener. If I have to write a one-off, e.g., a letter, I use my edition of WordPerfect. That’s where I save passwords, since you can even password protect a given document. I fell in love with WP in college, when I discovered its marvelous Reveal Codes feature. Briefly I worked for a lawyer who used WP, which I was grateful for because it let me write my first novel during copious downtime at work. I kept the novel on a 3.5 floppy disk and carried it back and forth from home to work. LawyerBoss was devoted to WP, and he even pulled a Charlton Heston about replacing it: “From My Cold Dead Hands.” A sentiment I discovered to be his one redeeming feature 🙂

    I remember Aldus PageMaker, too. My college newspaper used it, and one of the editors moaned and griped about the difficulties of typesetting, and how she was stressed about it. I offered to learn PageMaker to help her out, but she refused the offer on the grounds it was too difficult a program to “just pick up on.”

    The next year I transferred to a different college and had my first internship for a magazine. One of the senior editors taught me PageMaker in five minutes and I retroactively lost respect for my college editor. I learned then to never take anyone’s word for a task being “too difficult.” Also since then, I’ve learned people will ascribe magic powers to anyone who is capable of doing something as basic as “reading the manual” to solve a tech problem.

    I second the recommendation for Serif’s Affinity series. I bought the whole suite when they had a sale during Lockdown. The Photo / Design programs immediately earned their keep for me by addressing some shortcomings of Photoshop & Illustrator CS6, without Adobe’s never-ending Creative Cloud subscription. I’ve yet to thoroughly test drive Publisher, which is Affinity’s competitor to InDesign, but the fact that it opens InDesign’s .idml files is already a good sign.

    • FYI — MS Word has supported file password protection for quite a while. It’s handy for my belt-and-suspenders approach to password management tools (LastPass and Psw-protected Word doc).

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