Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hello and welcome to another episode of The Odd Lots podcast.
Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2: Tracy, I was at my cousin's wedding this weekend, and
Speaker 2: I have a lot of lawyers in my family, and
Speaker 2: every time I know that, yeah, yeah, and my extended
Speaker 2: family a lot of lawyers in there, and I'm always
Speaker 2: asking them, like what they do and stuff. Within like
Speaker 2: five seconds of any conversation, I'm like, tell me about
Speaker 2: trials and techniques like swathe the jury, etc. The stuff
Speaker 2: I see on TV. I am aware though that that
Speaker 2: is actually not that big of a part of many
Speaker 2: lawyers like day to day.
Speaker 3: Well, I have a lawyer in my family too, an
Speaker 3: ex lawyer, my husband, who did big law, big corporate law,
Speaker 3: absolutely hated it and got out of it luckily. And
Speaker 3: so I have a feeling in this particular episode, I'm
Speaker 3: just going to ask a lot of work life balance
Speaker 3: questions based on my own experience of my husband's experience. Yeah,
Speaker 3: but it is a huge industry, and it's one of
Speaker 3: those industries that I think all financial journalism actually doesn't
Speaker 3: do a good job of covering along with accounting. So
Speaker 3: we should talk about it.
Speaker 2: We definitely should talk about it. We should talk about
Speaker 2: it way more than we do. Within the AI conversation, specifically,
Speaker 2: you hear a lot about the prospects of this being
Speaker 2: either like a force multiplier or a labor reducer, because
Speaker 2: my understanding is that a lot of like, especially like
Speaker 2: junior lawyers, they're up all night. What are they like
Speaker 2: looking for misplaced commas because those could be a big
Speaker 2: deal in contracts, right, and so in theory, and again, Tracy,
Speaker 2: I'm sure you know way more about this than I do.
Speaker 2: But in theory that sort of seems like something a
Speaker 2: I might be good at, Like, oh no, if the
Speaker 2: is not here and it's there, then that totally changes
Speaker 2: the definition of this clause or whatever.
Speaker 3: There's a famous case involving a commo that did exactly that.
Speaker 3: So many points to make here. First of all, I
Speaker 3: am vastly in favor of anything that makes corporate lawyers
Speaker 3: lives slightly more efficient and happier, so AI could be
Speaker 3: useful here. But I also wonder, you know, the lawyer profession,
Speaker 3: they have things like templates and standard forms and stuff
Speaker 3: like that. So I also wonder how much of an
Speaker 3: improvement AI will be here. So I'm excited to talk
Speaker 3: about it.
Speaker 2: You know that, Tracy, when they get the AI tools
Speaker 2: really in place, they're just going to give them more work.
Speaker 3: Yeah, well that's what I suspect.
Speaker 1: Yeah, yeah, no, one's.
Speaker 3: Actually by the way, I have a lot of stories
Speaker 3: of like partners calling from their fishing boats on the
Speaker 3: weekend demanding that junior lawyers go into the office and
Speaker 3: like fix a comma and things like that.
Speaker 2: All Right, Well, I'm really excited to say we do
Speaker 2: have the perfect get. Someone that I've known for a
Speaker 2: very long time, someone who just knows about a lot
Speaker 2: of stuff. Someone who is lawyer. We're going to be
Speaker 2: speaking with Joel Worthheimer. He's currently at Worthheimer Fleet LLP
Speaker 2: of civil rights firm here in New York City. He's
Speaker 2: previously at the White House. He's done big law in
Speaker 2: the past. He knows a lot about a lot of stuff.
Speaker 2: He knows a lot about poker, he knows a lot
Speaker 2: about AI. Someone I think we had just talked to
Speaker 2: about anything. He knows a lot about elections. He just
Speaker 2: sort of knows everything. Joel, Thank you so much for
Speaker 2: coming on Odd Laws thrilled to have you here.
Speaker 4: Thank you for having me.
Speaker 2: Why do you real? Quickly tell us, like who you are,
Speaker 2: what do you do? Why are we talking to you.
Speaker 5: I run my own civil rights law firm. I just
Speaker 5: partnered up, and we sue the government mostly for violations
Speaker 5: of civil rights. Sometimes that's false arrests or wrongful convictions.
Speaker 5: Sometimes that's wrongful removals of kids and let's say child
Speaker 5: services for a shaken baby that was a false accusation,
Speaker 5: that sort of thing, And we try to get people
Speaker 5: compensation for the wrongs of their constitutional rights. That's about
Speaker 5: eighty percent of what we do.
Speaker 3: Question. Are civil slash criminal lawyers? Are they happier than
Speaker 3: corporate lawyers?
Speaker 5: I would say on average, sure, but the distribution is
Speaker 5: probably pretty wide for each you know. Look, I do
Speaker 5: think on the nice thing on the plaintiff side, and
Speaker 5: it's like I'm my own boss. I get to, you know,
Speaker 5: determine how much I work, and each extra case it's
Speaker 5: just more money or less money if I if I
Speaker 5: decide not to take it, and so I can sort
Speaker 5: of set my own work life balance when I do that,
Speaker 5: you know, and it's it's constantly a decision of sort
Speaker 5: of what's the expected value of a case and is
Speaker 5: it worth it to me in terms of the hours
Speaker 5: I have to put in.
Speaker 2: So let's talk about when you were at a big
Speaker 2: law and you know, I joked that you know people
Speaker 2: they're up at one am and they're looking at commas.
Speaker 2: I know that's a little bit of an exaggeration, but no,
Speaker 2: it's not, and it really isn't.
Speaker 1: Yeah, I guess it's not.
Speaker 2: And I know that lawyers are really obsessed with billbile
Speaker 2: hours and I think they even like measure things in
Speaker 2: ten minute increments, like so six minutes, six minute increments.
Speaker 2: If you're a junior associated or enter a law firm, whatever,
Speaker 2: what is the modal use of your time? What are
Speaker 2: you mostly doing when you're clocking those six minute increments?
Speaker 4: Right?
Speaker 5: So it's gonna I can only really speak to litigation
Speaker 5: because of corporate you're I think we're just reviewing contracts
Speaker 5: and deal points constantly. For litigator, A lot of your
Speaker 5: your time is in discovery, and that's true small law,
Speaker 5: big law, but you are reviewing documents, uh, synthesizing what
Speaker 5: they say. Maybe you're trying to do a privileged check
Speaker 5: and say, okay, this document we can't turn over. You know,
Speaker 5: that's changed some actually with machine learning, the predictive coding
Speaker 5: has shrunk the amount of time that you know, junior
Speaker 5: associates are spent doing that legal research, fights with opposing counsel.
Speaker 5: You need to give us these documents you're saying they're privileged,
Speaker 5: they're not privileged, that sort of thing. And then there's
Speaker 5: the smaller section on taking depositions, you know, briefing things
Speaker 5: to court. So that's very broad overview of those six
Speaker 5: minute increments, and yes, editing and reviewing, looking for hanging commas,
Speaker 5: you know, hanging headers. That was always the ban of
Speaker 5: my existence, was forgetting that there was a hanging header.
Speaker 4: Yeah, and getting ye all that for it.
Speaker 2: That sounds bad, you know, the economics of a big
Speaker 2: law firm. It feels like this very big pyramid structure,
Speaker 2: which I think is replicated in many industries around the world,
Speaker 2: probably in finance to some extent, and then I think
Speaker 2: even academia to some extent. But talk to us a
Speaker 2: little bit about like how that value accruise to the
Speaker 2: entire firm and the partners and the distribution of the
Speaker 2: fees that the clients are paying.
Speaker 5: Right, so you have what they call leverage in a
Speaker 5: law firm, So you have equity partners. Some firms have
Speaker 5: equity partners and income partners who don't actually own a
Speaker 5: chair of the firm, but the partners are trying to
Speaker 5: get leverage on the associates. So one partner to say
Speaker 5: four associate ratio, all of the big law firms basically
Speaker 5: pay the exact same amount to their associates.
Speaker 4: This is called the Cravat scale.
Speaker 5: You can look it up and it'll say a third
Speaker 5: year associate makes two hundred and fifty thousand dollars and
Speaker 5: gets this bonus each year.
Speaker 4: Let's just say for.
Speaker 5: The average associate bills seven hundred dollars an hour and
Speaker 5: is expected to bill about two thousand hours a year.
Speaker 5: So they're generating one point four million for the firm
Speaker 5: in revenue in terms of build out, and they're getting
Speaker 5: paid i'd say with taxes and everything, five hundred thousand.
Speaker 5: So the partners are making nine hundred thousand dollars for
Speaker 5: every extra associate. So if you have a four to
Speaker 5: one leverage, nine hundred thousand profits per partner three point
Speaker 5: six million. And that's how they're trying to think of it,
Speaker 5: and the big partners, the rain makers are the ones
Speaker 5: who can generate enough work to support those associates. And
Speaker 5: if you can't support those associates, your leverage goes down,
Speaker 5: your profits go down.
Speaker 4: You might have to let people off that sort of thing.
Speaker 3: It's nice to be a partner at big law. But
Speaker 3: on that note, so my understanding, at least in corporate
Speaker 3: law is that it is harder to make partner nowadays
Speaker 3: than it used to be. And this is part of
Speaker 3: the reason why it's a miserable experience, because it used
Speaker 3: to be in the past. You know, you work really
Speaker 3: really hard, basically give up your life for like two
Speaker 3: decades or whatever, and then you get rewarded with a
Speaker 3: huge salary and you don't have to do as much
Speaker 3: of the grunt work. Your job is basically sourcing deals
Speaker 3: and making the intros and stuff like that. Do you
Speaker 3: get that impression as well on your side?
Speaker 5: I definitely see from the outside that it seems harder
Speaker 5: to make partner. I think that's led to people more
Speaker 5: people leaving earlier to do their own firms. I think
Speaker 5: it's easier than ever to start.
Speaker 4: Your own firm.
Speaker 3: And why is that.
Speaker 5: I mean, for one, I mean for me, for example,
Speaker 5: I didn't need an office when I started. I started
Speaker 5: in January of twenty twenty one. I had a desk
Speaker 5: at a you know, at another law firm that collected mail.
Speaker 5: I think the number of services are just easier to access,
Speaker 5: even things like you know now if you really wanted to,
Speaker 5: like cut, you could start with a cheaper legal research
Speaker 5: service than West Law. Things like that, I think, and
Speaker 5: you've seen it in the in the business creation numbers.
Speaker 5: I think you see a lot of professional services, you know,
Speaker 5: splitting off from firms. But I definitely think it's harder
Speaker 5: to make partner.
Speaker 4: They have had that.
Speaker 5: They've added this income partner level, so you make partner,
Speaker 5: but you're not an equity member of the firm. I
Speaker 5: think consolation prize, that's right, and you get to shop
Speaker 5: the title.
Speaker 4: I think it's the other reason. You know.
Speaker 5: So let's say you want to go in house somewhere.
Speaker 5: Now you're a partner at this firm and you can
Speaker 5: say you're a partner at the firm even if you
Speaker 5: haven't bought in.
Speaker 4: But I think that structure has been around longer.
Speaker 5: Honestly, it feels like the same thing it's in academy
Speaker 5: it's harder to get ten here now, it's just the
Speaker 5: latter's getting pulled up.
Speaker 4: I guess in the sort of.
Speaker 2: Industry, would anyone go into a big law firm if
Speaker 2: they knew in advance that they wouldn't make partner? Like
Speaker 2: there's some like the angel of the future comes to
Speaker 2: them in a dream and says, you know what, you're
Speaker 2: not going to make partner? Would that still be worthwhile?
Speaker 2: Or is the prospect even if it's declining of making
Speaker 2: partner like? Is that crucial towards that decision? If you
Speaker 2: knew in advance you weren't going to make it? Would
Speaker 2: anyone make that decision?
Speaker 5: So they do have staff attorneys at big law firms
Speaker 5: that are people who are not on partner track.
Speaker 1: Okay, and those are fine careers.
Speaker 5: And they're fine careers I think people you know, but
Speaker 5: they also have less expectation of how much they're going
Speaker 5: to work.
Speaker 4: You typically wouldn't do it.
Speaker 5: And the reason they have this up or out sort
Speaker 5: of system at the big law firms is because the
Speaker 5: prospect of being partner drives you to sell you twenty
Speaker 5: twenty five hundred hours, how many it is you're showing.
Speaker 3: How well the light at the end of the tunnel, right.
Speaker 1: That's right?
Speaker 5: So you know, I think, Look, the training is really good,
Speaker 5: the cases are really interesting, Like I actually quite enjoyed
Speaker 5: some of it, But that pressure to bill and work is.
Speaker 4: You probably wouldn't I want that.
Speaker 1: When you say training, like, you know, I don't, like
Speaker 1: what's the deal? Like in law school you don't even
Speaker 1: learn about any of the things you actually do as
Speaker 1: a lawyer.
Speaker 5: You certainly learn, you know how to think about the law,
Speaker 5: but you're not learning in the city and you have
Speaker 5: a leader.
Speaker 1: Because I think this is.
Speaker 2: Actually important for the AI component of like, Okay, what
Speaker 2: is how do you actually learn to be a lawyer
Speaker 2: if you don't really do it in law school? And
Speaker 2: then you know AI is going to take over more
Speaker 2: and more of these functions like the prospect where do
Speaker 2: you learn?
Speaker 3: Right?
Speaker 5: So what is So here's an example. You don't learn
Speaker 5: how to have a dispute about discovery in law school. Okay,
Speaker 5: you know I sent out discovery demands you owe me documents.
Speaker 5: Right under in the American system of law, somebody you get,
Speaker 5: you end up in a lawsuit, and each side is
Speaker 5: obligated to exchange documents with each other. And you you
Speaker 5: send out demands and you ask for a certain category
Speaker 5: of documents and they come back and say we're not
Speaker 5: going to give them to that request was overly burdensome
Speaker 5: or they're not really or they say they lost them,
Speaker 5: or they say they lost them, and you have to
Speaker 5: have a fight about getting the documents. What keywords did
Speaker 5: you search, who did you collect documents from? All of
Speaker 5: those sorts of things, and how to have that dispute,
Speaker 5: how to make the request so you don't get the
Speaker 5: denial those sorts of things, and what the writing looks
Speaker 5: like and feels like you just don't get. In law school,
Speaker 5: you just the and even writing a brief, and what's
Speaker 5: a persuasive brief? The edits those sorts of things. You
Speaker 5: learn how to do legal writing, but it's just you
Speaker 5: can't do it until you're doing it.
Speaker 1: Got it okay?
Speaker 3: So on that note, I mean, AI seems possibly most
Speaker 3: at home replicating the work done by say a mildly competent,
Speaker 3: maybe not too tired, junior associate. And historically you do
Speaker 3: that work for many years and you build foundational skills
Speaker 3: of being a lawyer, like attention to detail and issue
Speaker 3: spot and I guess, risk triage, and that sort of thing.
Speaker 3: If those tasks, those formational tasks are now outsourced to AI,
Speaker 3: what do you see as the impact on junior lawyers.
Speaker 5: It's a great question. I think it's going to be
Speaker 5: hard for junior lawyers at big law firms to get
Speaker 5: their sort of that training. On the other hand, it
Speaker 5: may just be that they are doing more work and
Speaker 5: so on the same things, but more efficiently. Maybe they're
Speaker 5: now going to have more fights about documents and less
Speaker 5: time spending reviewing the documents. Maybe they can increase the
Speaker 5: volume of things they demand, that sort of thing. I
Speaker 5: certainly think that the leverage model and the build our
Speaker 5: model is going to run into some difficulty. It'll also
Speaker 5: make their lives easier, just in terms of you know,
Speaker 5: as an example, you.
Speaker 4: Get discovery requests.
Speaker 5: I talk about discovery a lot because it's truly like
Speaker 5: a lot of the work of being a lawyer. But
Speaker 5: they come, you know, the other side will send you
Speaker 5: a PDF with a bunch of demands, and then you've
Speaker 5: got to respond to the demands, and even just the
Speaker 5: moment where you have to convert the PDF into a
Speaker 5: word document and start editing the work word document it's
Speaker 5: like the true bane of my existence. And I've actually
Speaker 5: started using this AI program which it's called brief Point AI,
Speaker 5: and and they are it's also very templated, right, so
Speaker 5: you're constantly trying to find templates. Hey, other associated in
Speaker 5: this law firm, can you send me, you know, a
Speaker 5: previous document?
Speaker 4: Now I can?
Speaker 5: They have you know, eighty different objections that you're used
Speaker 5: to making, and they convert them and it's a lot
Speaker 5: more pointing click And of course you have to know
Speaker 5: what you're doing when you're you know that these objections
Speaker 5: are valid. But just the document formatting and getting it through,
Speaker 5: you know, and it looked to look good and and
Speaker 5: not have to fight with Microsoft Word for three hours
Speaker 5: is really valuable.
Speaker 3: I realized I should have asked this earlier. But when
Speaker 3: we say AI, what does that actually entail in the
Speaker 3: legal field, Because, as you point out, I mean template
Speaker 3: standard forms, those sort of things have been around forever
Speaker 3: and a lot of law firms already use template software
Speaker 3: to quickly duplicate ork or make document packages or whatever.
Speaker 3: So when we talk about AI in law, what exactly
Speaker 3: would that be?
Speaker 4: I think it can be a lot of things.
Speaker 5: One, it can be making that template process a lot faster,
Speaker 5: and uh, you know that will free up labor time
Speaker 5: for sure. The you know Chatgypts three pro is doing
Speaker 5: legal research now that is quite excellent.
Speaker 2: This is really important. People who think that this that
Speaker 2: three is dumb or is a hallucination machine are not
Speaker 2: or that chagpts have not used oh three.
Speaker 4: That's that's my view.
Speaker 5: And you know, there's this professor at Georgetown I think
Speaker 5: its name is Danny Wels Townsend who's just sort of
Speaker 5: every time a new model has been coming out, has
Speaker 5: been running sort of exam questions that he gives to
Speaker 5: his students. I think it's in his Federal Courts class
Speaker 5: about you know, how they do on each of these questions.
Speaker 5: And when O three came out, not even O three PRO.
Speaker 5: When O three came out, it was it answered them all,
Speaker 5: some of them excellently, and even got what he was
Speaker 5: called an issue spotter question. So it wasn't on the
Speaker 5: face of the question it was an appellate jurisdiction question.
Speaker 5: If you really were thinking hard about it as a student,
Speaker 5: you would have noticed this issue that he wasn't asking
Speaker 5: about explicitly. But there might not have been jurisdiction to
Speaker 5: even bring the appeal that he prompted you about. And
Speaker 5: O three caught that. And when I've used it, you know,
Speaker 5: you hear a lot of these cases lawyers getting sanctioned
Speaker 5: because they're, you know, submitting things with hallucinated cases.
Speaker 3: And there's some funny examples of that.
Speaker 4: They're they're amazing.
Speaker 5: And the thing I think to myself is you would
Speaker 5: never admit as a as a partner at a law firm,
Speaker 5: you'd never submit whatever the junior associate just turned over
Speaker 5: to you. Sometimes they didn't understand the case exactly right.
Speaker 5: And so that's the job is checking the cases. Shepherdizing
Speaker 5: is the I think the Lexus term for it, and
Speaker 5: making sure the cases stand for what they say, that
Speaker 5: they're still valid precedent.
Speaker 4: That's the job of being a lawyer.
Speaker 5: And now I can rely on three to start some
Speaker 5: of the research for me, point me even just to
Speaker 5: point me to the cases and exciting to the cases.
Speaker 5: And this is without access to Bloomberg Law or Thompson
Speaker 5: Reuters or anything like that. I assume it's coming and
Speaker 5: once it's going to be integrated with those databases of cases.
Speaker 5: Right now, it's just trawling the Internet. I think it's
Speaker 5: going to do a fantastic job. And you spend so
Speaker 5: much time as a lawyer, as a litigator thinking of
Speaker 5: the Boollyan search terms for lexus, the and or these
Speaker 5: sorts of things, and you don't know the exact term
Speaker 5: that's going to come up in case, you know what
Speaker 5: the all of the precedent use this term, and not
Speaker 5: having to think about that, I can run it in
Speaker 5: the background as I'm doing another task and for twenty
Speaker 5: minutes and something comes back from three It's got the
Speaker 5: five cases that I need to to dig in and
Speaker 5: find the right you know, language to then go on
Speaker 5: Lexus and then to chase it down.
Speaker 2: I've been using three more for just sort of my
Speaker 2: own like intellectual questions from time lawsuits. No, I haven't
Speaker 2: done any I haven't started any lawsuits yet. But this
Speaker 2: is really the way that I've been using it, which
Speaker 2: is that it's a fantastic tool for just like discovering
Speaker 2: the existing research that's out there. I was looking at
Speaker 2: something I was curious about, like trade barriers within China
Speaker 2: between provinces, you know, something like that. There is a
Speaker 2: lot of research that's been done on the question of
Speaker 2: like Okay, if each of these provinces has some motivation
Speaker 2: to promote their champions, is there any tension?
Speaker 1: There is something?
Speaker 2: I would have it found all of this all. It
Speaker 2: had the links to the academic research that's been about it.
Speaker 2: It had summaries of them. The summaries may have been wrong,
Speaker 2: but I'm not in the I'm not going to like
Speaker 2: copy and past summaries and present it as my work.
Speaker 2: I could click on it most of the time, it is,
Speaker 2: they are pretty correct. It's so what you say in
Speaker 2: terms of like just even like being able to find
Speaker 2: the relevant case law, et cetera, seems extremely powerful and
Speaker 2: time saving.
Speaker 5: It's truly been life changing for me. Well, and I
Speaker 5: like doing legal research. I like getting into the cases,
Speaker 5: but just you know, if there's a new issue and
Speaker 5: you just don't know where to start, you know, that's
Speaker 5: that It was always I think for a juniors, where
Speaker 5: do I start? And I think it will make their
Speaker 5: life easier in that regard, even if it might also
Speaker 5: make their.
Speaker 1: Lives you know hard.
Speaker 3: Okay, time saving making associates lives easier, that sounds great
Speaker 3: from a personal perspective, but what does that actually mean
Speaker 3: for billable hours? Because of course, the whole business model
Speaker 3: seems to rely on eking out as much work as
Speaker 3: many billable hours as possible, right, and that includes grunt work,
Speaker 3: which theoretically could be done by AI. Now, and I'm
Speaker 3: not sure Big law or any law is going to
Speaker 3: be necessarily incentivized to use AI if it means a
Speaker 3: reduction in billable hours. I suppose they could make it
Speaker 3: up in volume. Maybe that's that's the idea they can
Speaker 3: take on more cases. But is that the expectation they
Speaker 3: might be able to make it up in volume. I
Speaker 3: do think things like they call them alternate fee arrangements
Speaker 3: are going to become more popular. We get a flat
Speaker 3: fee of let's say five million dollars to do this
Speaker 3: deal for you or something like.
Speaker 1: That, then you're incentivized to do it in the fewest
Speaker 1: hours possible. That's right, keep going.
Speaker 5: So that's one possibility that the model just changes the
Speaker 5: billable hour, it stops being the model. The other thing is,
Speaker 5: you know the way it works right now is it's
Speaker 5: been a while for me, so you know, the big partners,
Speaker 5: let's say they're building out at two thousand dollars an
Speaker 5: hour or fifteen hundred dollars an hour and the associates
Speaker 5: are seven hundred dollars an hour. I think in a
Speaker 5: lot of ways, what the client is paying for is
Speaker 5: the is really like five thousand dollars an hour for
Speaker 5: the partner and four hundred or three hundred for the associate.
Speaker 5: But it just gets built out sept differently. And I
Speaker 5: think one thing is that partners might just accrue a
Speaker 5: lot more of the value with fewer associates. They still
Speaker 5: have the billd hours, they're just a lot more efficient.
Speaker 5: And you know, in particular, I think for general counsels
Speaker 5: who are hiring at the big law firms, they're hiring
Speaker 5: for safety. You know, nobody ever got fired for hiring Cravat.
Speaker 5: It's sort of like a way to think about this
Speaker 5: or a big law firm, if something goes wrong, you
Speaker 5: want to have hired the best lawyer you could and
Speaker 5: say to your board or your CEO, look I hired
Speaker 5: a great law firm, and they just they just missed it.
Speaker 5: But look this is everybody agrees this is a great
Speaker 5: law firm. Which is all to just say that. I
Speaker 5: think one possibility here is the bill hour remains, but
Speaker 5: all the value accruise to the top top lawyer.
Speaker 2: Yeah, I mean that seems like it'll have implications. We
Speaker 2: should talk about that further. Something I have done is
Speaker 2: I'll take episodes transcripts of odd lats, and afterwards I'll
Speaker 2: do a little self criticism session. Well, I'll like say, like,
Speaker 2: where could we have pressed this? Where were the weaknesses
Speaker 2: in the guests?
Speaker 1: Answer?
Speaker 2: Where should we have pressed further and harder? What were
Speaker 2: some of the logical flaws? What would you have done differently? Etcetera?
Speaker 2: And sometimes I've found that to be useful. Have you
Speaker 2: been able to use AI for essentially like building better
Speaker 2: arguments or finding weaknesses in an argument or anything like
Speaker 2: that yet.
Speaker 5: I haven't done that yet. I'm sure I will. I
Speaker 5: have used it for taking audio and making it into
Speaker 5: oh transcripts. I mean that's just like a foundational thing
Speaker 5: for me. Prison will produce an audio of a hearing
Speaker 5: or something like that, and I need the transcript and
Speaker 5: I need to like just read it instead of listening
Speaker 5: to it for forty minutes.
Speaker 2: But self criticism, Yeah, but it also it does sound
Speaker 2: like you mentioned the issue spotter question, like actually being
Speaker 2: able to identify real legal questions.
Speaker 3: Not just an identify precedent.
Speaker 2: Yeah, not just identify president, but actually logical sequences or
Speaker 2: where like it sounds like if you're getting.
Speaker 4: That, I'm sure it is coming.
Speaker 5: And I think as I, you know, get as the
Speaker 5: models get better, and I have to produce a brief
Speaker 5: and maybe I can start running it through. Of course,
Speaker 5: lawyers all have huge confidentiality concerns so everything they do,
Speaker 5: so I'm very careful about what I'm putting into GPT. Yeah,
Speaker 5: you know, and I can run your own deep sea instance.
Speaker 5: I think that that's right. And I think the big
Speaker 5: law firms are having sort of servers on site with
Speaker 5: their own models, but those models aren't as good as
Speaker 5: three yet, and so I think as you can start
Speaker 5: to have great models in house on your own servers,
Speaker 5: that's going to really be the thing that launches it.
Speaker 5: I can't do that because it's just me and I'm
Speaker 5: not going to host a server farm, but I do know,
Speaker 5: right the new Apple chips on these very nice the
Speaker 5: news they can run you know, things like Lama very well,
Speaker 5: and so it's coming. But I think for the top models,
Speaker 5: I'm sort of reluctant to put everything up there that
Speaker 5: makes sense.
Speaker 3: This is exactly what I was going to ask next,
Speaker 3: which is how do clients feel about AI in the
Speaker 3: legal industry, because I imagine, you know, nobody ever got
Speaker 3: fired for hiring Kravath as you mentioned, or some other
Speaker 3: magic circle law firm. But on the other hand, if
Speaker 3: Kravath is now using AI, I imagine on the client side,
Speaker 3: maybe there's some concern over having their material contracts or
Speaker 3: employee data or financing documents or whatever getting uploads to
Speaker 3: off site servers. And then there's also the question of
Speaker 3: what if AI just makes a mistake, although, as you
Speaker 3: pointed out, no partner would ever submit something done by
Speaker 3: a junior associate without actually reviewing it first, so maybe
Speaker 3: that's not as much of an issue. But are there
Speaker 3: any qualms I guess coming from the client side that
Speaker 3: you see.
Speaker 5: So I can't speak to the big law as much
Speaker 5: any sure, And it's very different I think on my side,
Speaker 5: and I think, you know, my clients are their qualms
Speaker 5: are much sort of bigger in terms of privacy and
Speaker 5: much more you know, focused on the government and are
Speaker 5: wanting to get just the best representation they can. So
Speaker 5: but for example, I'm getting medical records from my clients
Speaker 5: a lot. That's a lot of the job of a
Speaker 5: plaintiff side lawyer is documenting injuries things like that, and
Speaker 5: they're certainly concerned about their medical privacy, and so I can't,
Speaker 5: you know, use AI yet to take the medical recD
Speaker 5: and condense them into you know, the quick summaries. But
Speaker 5: those programs I'm sure are coming where you know you
Speaker 5: have there's there's privacy and security and all of the things.
Speaker 5: They probably exist already. I'm just not using them yet
Speaker 5: to make that part feasible. I am sure that you know,
Speaker 5: if you are Goldman Sachs and you hire a big
Speaker 5: law firm and they've been doing your your deals or
Speaker 5: your IPOs such as they exist right now, and you
Speaker 5: don't want the law firm training on your documents to
Speaker 5: go use them in other deals. I'm sure this is
Speaker 5: an issue. On the other hand, you know it might
Speaker 5: reduce your legal costs by by half, and you can
Speaker 5: fight about that, and so you know what they're willing
Speaker 5: to do.
Speaker 4: I don't. I don't know.
Speaker 2: Let's extend forth some of these economic questions, because allowing
Speaker 2: the senior partners to accrue more value by not needing
Speaker 2: to allocate as many hours to the junior lawyers, that
Speaker 2: makes total sense for this specific generation, right, because Okay,
Speaker 2: some people are lucky enough to have made partner before AI,
Speaker 2: and then other people are going to be in this
Speaker 2: situation which their value may be could be done more
Speaker 2: cheaply or for a few hours, but ten years from
Speaker 2: now whatever, a lot of those partners are gonna be retired, etc.
Speaker 2: Like what is the downstream consequence of your view in
Speaker 2: your view of some of these shifts that happen right now,
Speaker 2: because you know, eventually all the partners you know, ventually
Speaker 2: Evere's get die and there's gonna be new, Like where
Speaker 2: does this go?
Speaker 1: Like what's the next? What are the consequences?
Speaker 5: So I think that the skills that will be valued
Speaker 5: in lawyers are just going to change a lot. The
Speaker 5: interpersonal skills of client management, walking your client through the
Speaker 5: risks that they have, their nervous they're getting sued. These
Speaker 5: are bet the company litigations. The lawyers who can make
Speaker 5: them feel safe and let them understand what's happening to
Speaker 5: them and what their odds are. Those sorts of things.
Speaker 5: The lawyers who are great at taking depositions and the
Speaker 5: lawyers who are great at oral argument, those skills are
Speaker 5: going to go up and up. I think in skill
Speaker 5: in value and the skill of legal research or just
Speaker 5: being great at writing a brief, I do think that
Speaker 5: that's going to get maybe not the ninety ninth percentile
Speaker 5: brief writing the people who are going to the Supreme
Speaker 5: Court and who are just truly excellent.
Speaker 4: Maybe that will take time.
Speaker 5: But the sort of gruntwork, you know, solid junior associate,
Speaker 5: mid level associate, senior associate who are writing the brief,
Speaker 5: that I question whether that skill will have the same value.
Speaker 5: But there's a lot of interpersonal skill that matters a
Speaker 5: lot for being a lawyer, and that's going to go
Speaker 5: up in value.
Speaker 2: Now. Question with any new technology is does it because
Speaker 2: one argument is clearly, okay, there's an x amount of
Speaker 2: demand for legal services and there's an x amount of
Speaker 2: people who supply them, and maybe you save some money.
Speaker 2: Could the market for legal services grow such that if
Speaker 2: capacity to do legal research and some of this other
Speaker 2: stuff gets cheaper, that there are more areas it's like, oh,
Speaker 2: you know what, maybe this is worth filing the laws.
Speaker 3: This was actually going to be my question as well,
Speaker 3: but particularly for poorer plaintiffs who normally can't afford a lawyer,
Speaker 3: what did they call them.
Speaker 5: In indigent and they sometimes will file pro se and
Speaker 5: their on behalf.
Speaker 1: Or maybe more.
Speaker 2: Lawyers like you take on cases, take other cases that
Speaker 2: five years ago the economics wouldn't have made sense, but
Speaker 2: today the economics made sense.
Speaker 1: Like could it just be you know, Jevin's paradox?
Speaker 5: But for law I think that's absolutely going to happen.
Speaker 5: You know, I can just sort of walk through the
Speaker 5: economics in one of my cases. You know, somebody comes
Speaker 5: in and they say they had a false arrest case
Speaker 5: against the NYPD and they spent let's say five hours
Speaker 5: in custody. We sort of know what the expected value
Speaker 5: of that case is. You know, you're doing what chance
Speaker 5: are you do you have to win? And what are
Speaker 5: the damages you are going to get when you win?
Speaker 5: And I can sort of and then I I a
Speaker 5: contingency fee, typically a third in New York, and you
Speaker 5: can sort of do that math of the expected value
Speaker 5: of the case and then think about how many hours
Speaker 5: it's going to take to win that case or get
Speaker 5: to a settlement. And if I'm using AI to make
Speaker 5: myself more productive in my research, the number of hours
Speaker 5: that I'm expecting to put into that case goes down.
Speaker 5: Suddenly my hurdle rate for you know, what it takes
Speaker 5: to take on that case has gone down, and I
Speaker 5: can take on more cases for the same number of hours.
Speaker 5: And so that I definitely think is coming. It's also
Speaker 5: the case that right and because of that, because lawyers
Speaker 5: have to think in that term of you know, how
Speaker 5: much is it going to cost me to do this
Speaker 5: case in terms of labor, there are a lot of
Speaker 5: cases brought pro sae in the court system right now.
Speaker 5: I think it's like twenty twenty five percent of cases
Speaker 5: are from pro se litigants. These are other people represent
Speaker 5: the who represent themselves because they can't afford a lawyer
Speaker 5: or you know, my cases are contingency. People aren't paying
Speaker 5: out of pocket, but so I can't afford to take
Speaker 5: on the case because the damages aren't potentially high enough.
Speaker 4: That's how I have to sort.
Speaker 5: Of think about it. And so I think there's going
Speaker 5: to be a lot more representation.
Speaker 4: Of those people.
Speaker 5: It's also the case probably that pro say it lawyers
Speaker 5: are going to start getting better that you know, you
Speaker 5: said you were doing research on your own, you know,
Speaker 5: with three it's possible that you know, if it was
Speaker 5: just a little dispute with somebody over some amount of money.
Speaker 5: You might think I can do this myself rather than
Speaker 5: trying to go find a lawyer. And so, you know,
Speaker 5: but for legal aid, for people who are criminal defense
Speaker 5: attorneys at legal aid, those attorneys that I think are
Speaker 5: about to go on because of how overworked they are
Speaker 5: and underpaid they are, they they might get a lot
Speaker 5: more efficient and be able to represent a lot more people.
Speaker 2: Tracy, I'm imagining a lot of very annoyed judges by
Speaker 2: like pro.
Speaker 1: Saying frivolous lawsuits.
Speaker 2: No I mean no, I mean like someone who did
Speaker 2: their own research, because nothing's more annoying than someone who
Speaker 2: does their own research. And then they're like they're like
Speaker 2: citing all these cases that they learned about yesterday and
Speaker 2: stuff like that. Like it just seems like you have
Speaker 2: a high potential for obnoxious, obnoxious people who think.
Speaker 3: They know No, no, you're democratized in case. Yeah, that's
Speaker 3: what I say.
Speaker 4: I want to be clear, they're already getting that.
Speaker 5: The judges are getting a lot of it, especially pro
Speaker 5: SA prisoners who get to spend a lot of time
Speaker 5: in the legal librarian or filing cases. And some of
Speaker 5: them are excellent, but sometimes they're not so good. I
Speaker 5: clerk for a federal judge, and we saw a lot
Speaker 5: of this litigation, a lot of it pro se. I
Speaker 5: don't know that they're you know, providing AI access in
Speaker 5: prisons unfortunately in terms of litigation. But I think, I
Speaker 5: actually think there are going to be a lot of
Speaker 5: annoyed judges because there's going this is going to happen.
Speaker 5: It also might be the case that it raises the
Speaker 5: floor of You see a lot of bad legal writing,
Speaker 5: even from lawyers, and I could see it getting it
Speaker 5: actually getting a little bit easier to be a judge and.
Speaker 3: A clerk if everything becomes more volume oriented or the
Speaker 3: business model becomes more about the volume rather than the
Speaker 3: billable hours. Do you see a situation where I guess
Speaker 3: the emphasis on sourcing deals in corporate law or sourcing
Speaker 3: cases in plaintiff, Does that become more important, Like that's
Speaker 3: the skill set that you actually need, that sort of
Speaker 3: like matchmaker process.
Speaker 4: I think that there's yes.
Speaker 5: I think finding the deals, making the economics of the
Speaker 5: of the relationship work is going to go up a
Speaker 5: lot in value. You know, I think it's already the case.
Speaker 5: You all see legal advertisements for personal injury lawyers everywhere
Speaker 5: all the time. So I mean legal search terms on
Speaker 5: Google are the most expensive cost per click. I mean
Speaker 5: these thousands of dollars for cost per click. Case acquisition.
Speaker 5: I think is might go up even more because if
Speaker 5: you can just get the case in and you're still
Speaker 5: you're working less on the case, but you're still getting
Speaker 5: your third contingency fee, you might be willing to pay
Speaker 5: even more and more to just generate this volume. I
Speaker 5: mean already mills exist, they call them, you know, plaintiff's mills.
Speaker 5: People who are doing you know, six hundred cases per
Speaker 5: you know, every couple of attorneys or something like that.
Speaker 5: The economics of that and just acquiring the case are
Speaker 5: going to go I think, way way up until maybe
Speaker 5: they start competing on price because they can do so
Speaker 5: much more volume.
Speaker 1: I want to talk about advertising.
Speaker 2: Have you, Tracy Orgel, have either of you heard the
Speaker 2: radio ads for top Dog Law?
Speaker 4: Yes?
Speaker 3: I have not you.
Speaker 2: Every listener go to YouTube and just type top Dog
Speaker 2: Law ad. They're the most incredible, aren't they, Joel, Like
Speaker 2: they're really incredible.
Speaker 3: Yes.
Speaker 2: Just go search right now or when the episode and
Speaker 2: listen to some of these and do you buy ads
Speaker 2: on Google?
Speaker 5: I've done some Google ad campaigns. I haven't really there's
Speaker 5: actually another topic we're interested in. But a lot of
Speaker 5: I mean a lot of plaintiff side civil rights lawyers
Speaker 5: are buying. It's just not how I've chosen to compete.
Speaker 5: I do more referrals from defense lawyers that sort of thing.
Speaker 5: But I mean I actually have started to think about, Right,
Speaker 5: we know this stuff about young people are starting to
Speaker 5: use chat, GPT and other services as they're sort of
Speaker 5: portal to the Internet. They're using it for search and
Speaker 5: so right, all of these law firms spend a lot
Speaker 5: on SEO, but what is SEO in a generative AI
Speaker 5: world is sort of an interesting question? What are people
Speaker 5: what are the engines turning up in terms of search terms?
Speaker 5: What do you have to have on your website in
Speaker 5: order to get people to find you through GPT rather
Speaker 5: than Google?
Speaker 3: Is Lexus and Nexus doing anything what they are?
Speaker 4: They are?
Speaker 5: I have not really used their AI products Lexus and
Speaker 5: I know West Law is doing the same.
Speaker 4: I use Lexus.
Speaker 5: I assume Bloomberg Law, which is also is doing something similar.
Speaker 5: But right now the models that they're using just aren't
Speaker 5: as good as three.
Speaker 4: It's basically and so if.
Speaker 5: You're still calling to a four era GPT or similar
Speaker 5: from claud or whatever, that sort of quality, I just
Speaker 5: don't think that they're getting good enough recent I think
Speaker 5: it really was whatever that step change was to O
Speaker 5: three's level, I think has made the research so much
Speaker 5: better that I just use it, and then I'll go
Speaker 5: look at all the cases on lexus.
Speaker 2: The difference in what you can actually learn from four
Speaker 2: h or whatever for zero, I don't the name it.
Speaker 2: Convention first all three it really is a very big deal.
Speaker 2: And I think like a lot of people formed impressions
Speaker 2: pre three impressions. What other tools are out there that
Speaker 2: are interesting or that come across your world, whether it's
Speaker 2: like I mean, you know, we've been talking a lot
Speaker 2: about three, and you mentioned that other one brief something.
Speaker 2: Is there anything else out there that's exciting or interesting
Speaker 2: or promising.
Speaker 5: There's one I looked at that look promising. Uh, it's
Speaker 5: like Ecutis or ike iq Idis something like that, and
Speaker 5: they looked pretty interesting in terms of sort of being
Speaker 5: full swite and wrap around. There's Harvey AI, but they're
Speaker 5: really focused on big law firms. But I know that
Speaker 5: they're working with a lot of big firms. But you know,
Speaker 5: the technology you know, for me that looks promising would
Speaker 5: be people where I can safely upload medical records and
Speaker 5: get instead of trawling through two hundred three hundred pages
Speaker 5: just like what was each progress note?
Speaker 4: What did it say? What's the injury?
Speaker 5: That sort of thing, And I think that's coming there
Speaker 5: are I think it's maybe something from case text or
Speaker 5: that summarizes depositions. And of course that's another thing where
Speaker 5: I've tried to use it in the past and it
Speaker 5: wasn't very good. I think just the context windows that
Speaker 5: they were able to use haven't been sufficiently large. But
Speaker 5: I think with RAG and with more and with better models,
Speaker 5: I think that will get better and better, you know,
Speaker 5: like this is the Ben Thompson line of this is
Speaker 5: the worst there ever going to be? Yeah, is something
Speaker 5: that I'm constantly trying to think about because I've used
Speaker 5: these these products in the past or tested them and
Speaker 5: they haven't been very impressive. But I also used four
Speaker 5: oh and wasn't very impressed at it's legal research and
Speaker 5: have seen that jump. And so I assume in terms
Speaker 5: of taking depositions and and getting concise summaries, of the
Speaker 5: most important facts for your case. That's going to get
Speaker 5: a lot better. I just think the products aren't there yet.
Speaker 5: And maybe because the API calls for the lms just
Speaker 5: aren't to their newest models yet, or it's too expensive.
Speaker 5: But I assume that's getting cheaper every you know, more's
Speaker 5: loss still applies.
Speaker 3: If you had to bet, if you had to put
Speaker 3: actual money on this question, would you say there will
Speaker 3: be more or less lawyers, say ten years from now as.
Speaker 1: A percent the population.
Speaker 4: Yeah, that's a great question.
Speaker 3: Thank you for the caveat check.
Speaker 4: It's important and I hadn't I hadn't thought about this one.
Speaker 4: I would.
Speaker 5: I would bet on fewer, but not that much. I
Speaker 5: would say, I don't think this is, you know, going
Speaker 5: to wipe out lawyers. I think fewer and what they
Speaker 5: do will change a lot.
Speaker 2: Could you imagine, you know, tech people are obsessed with
Speaker 2: the mythical who will be the first person to have
Speaker 2: a billion dollars startup with no employees? Could that be like, okay,
Speaker 2: you have you hung a shingle out. I think sometimes
Speaker 2: people use Could you imagine a megafirm with one employee?
Speaker 5: I could imagine mega lawyer with you know, so right,
Speaker 5: you think of se Selena and Barnes, those sorts of big,
Speaker 5: big plaintiffs law firms. I think they that I actually
Speaker 5: don't know, but it's a lot, and it's all across
Speaker 5: the country. But so much of what they do is
Speaker 5: make the discovery demand, respond to the demands, do the
Speaker 5: get the medical records, send out a settlement demand letter,
Speaker 5: Negotiate with the opposing council or the carrier from the insurer.
Speaker 5: You know, my client has a torn rotator cuff and
Speaker 5: a torn meniscus or something like that from this car accident,
Speaker 5: and they have an exact expected value of the case,
Speaker 5: and it's just negotiating that. And I think they could
Speaker 5: go from you know, let's say one hundred cases per
Speaker 5: attorney to a thousand or two two thousand because they
Speaker 5: could set up an automated workflow a lot easier, I think,
Speaker 5: And so you know, that person could could start making
Speaker 5: fifty million or one hundred million a year per one lawyer.
Speaker 5: Then the you know already five million that they're making
Speaker 5: or something like that.
Speaker 4: These top firms.
Speaker 2: One last little question I mentioned your a poker player.
Speaker 2: In poker, you know, big thing has been the emergence
Speaker 2: of solvers and you go back and you like, look
Speaker 2: at that, did you play it very well? But it's
Speaker 2: all about what you kind of what you described of,
Speaker 2: like your calculator EV right and.
Speaker 1: Did you play it right? And you don't always win.
Speaker 2: And you may have calculated ev right and you took
Speaker 2: on the case, but you don't get the outcome. How
Speaker 2: scientific is that the calculating evy on a given case
Speaker 2: and has it is there a technology that's working on that?
Speaker 5: So it's not very scientific at all. You know, it's
Speaker 5: a you can assess liability, I think pretty reasonably. Is
Speaker 5: this going to be something where we're definitely going to win?
Speaker 5: You know, the personal injury car accident lawyers to say,
Speaker 5: you know, the police report says this person made an
Speaker 5: a legal left turn. Perfect liability. I'm going to win instantly,
Speaker 5: and then you're just evaluating the damages. One thing I've
Speaker 5: actually explored is is looking into whether lms can estimate
Speaker 5: the damages based on the injuries that you describe pretty well.
Speaker 5: Go through the case law where there's cases this is
Speaker 5: called remitted, or cases where you might hear like, oh,
Speaker 5: this person got one hundred million dollars for their you know,
Speaker 5: hot coffee or whatever. You know, these sort of classic cases,
Speaker 5: and a judge will knock it down. They'll say, this
Speaker 5: case with this injury is only worth this much. But
Speaker 5: you could take all that language and start to estimate,
Speaker 5: you know, quantify because words or numbers. With these programs,
Speaker 5: you could start to quantify what are the injuries worth
Speaker 5: in the in the case law and then multiply that
Speaker 5: by So I think that sort of thing is going
Speaker 5: to get a lot more scientific, and they're going to
Speaker 5: use it on the carrier side. So Geico is going
Speaker 5: to be able to say, you know, you've described these injuries.
Speaker 5: We have a database of a thousand cases just like this,
Speaker 5: and this was what we you know, and then you
Speaker 5: could haggle, oh, well this is a great plaintiff or
Speaker 5: something like that, and they're super sympathetic and you know,
Speaker 5: have that negotiation. But I think that process of evaluating
Speaker 5: the exact value of an injury or of a case
Speaker 5: is going to get a lot more scientific and facilitate
Speaker 5: settlements to happen quicker.
Speaker 3: I imagine AI might be especially useful in class action
Speaker 3: lawsuits as well, where you're dealing with like finding thousands
Speaker 3: of people potentially to attach to a case and then
Speaker 3: actually contacting them and getting information from them.
Speaker 4: That seems reasonable to me.
Speaker 5: Also, in the class action cases, you just got a
Speaker 5: volume of data that you have to do discovery on.
Speaker 5: But it hadn't occurred to me. But you know, I
Speaker 5: do know that sometimes class actions start because somebody finds
Speaker 5: a Reddit thread and they see on Reddit, you know,
Speaker 5: all the people are all complaining about this same issue
Speaker 5: with this product or something like that, and the lawyers,
Speaker 5: you know, reach out to them, and so it is
Speaker 5: entirely possible.
Speaker 4: I could I could see that.
Speaker 3: That's another thing where you could have AI just trawling
Speaker 3: the internet for possible cases.
Speaker 4: I think so.
Speaker 5: Or you know, what are people posting about on Twitter?
Speaker 5: What are they all getting harmed by?
Speaker 4: I don't know. So it's it seems entirely plausible.
Speaker 1: Since you mentioned it.
Speaker 2: I just want to say you mentioned illegal lefts and
Speaker 2: tracy and listeners. I had a issue last year whereight
Speaker 2: I'm not going to get into it, but it involved
Speaker 2: taking an illegal left.
Speaker 3: Turn a criminal.
Speaker 1: I'm not.
Speaker 3: Where you found innocent.
Speaker 1: I am not a criminal.
Speaker 2: Thanks to a referral that our guest here, Joel helped
Speaker 2: make for me. I'm not going to say it. We're
Speaker 2: not going to talk anymore about the case. It was
Speaker 2: super annoying. I'm not gonna say anything more, but I
Speaker 2: just want to. I'm it's my disclosure for this episode.
Speaker 2: So Joel Wertheimer, thank you so much for coming on
Speaker 2: odd last.
Speaker 1: That was fantastic.
Speaker 4: Thank you for having me.
Speaker 1: Tracy.
Speaker 2: Before we talk about conclusions, I must press upon listeners
Speaker 2: again to search for top dog law firm ads. In fact,
Speaker 2: after we do this episode, we walk back to our desk, Tracy,
Speaker 2: I'm going to insist that you watch.
Speaker 1: A few of them.
Speaker 3: I love that your priority for this episode. The one
Speaker 3: thing you must get out of this episode is listening
Speaker 3: to top dog ads.
Speaker 2: No, I swear I was an uber home several months
Speaker 2: ago and this ad came on the radio and just
Speaker 2: like nothing I had ever heard my entire life. Nothing
Speaker 2: will prepare you for this, this law firm's ads. Anyway,
Speaker 2: I am very intrigued. Yeah, all right, well that was
Speaker 2: a fantastic conversation.
Speaker 3: Yeah. One thing I am wondering is, you know, in
Speaker 3: the US, there's a lot of talk about an overly
Speaker 3: litigious society, and I kind of wonder if AI is
Speaker 3: potentially just going to make it worse.
Speaker 2: It sounds very to me that it will make it
Speaker 2: worse or better or worse. But I think, like, you know,
Speaker 2: it does. My guess is that there's going to be
Speaker 2: some sort of you know, Jeffen's paradox thing where like
Speaker 2: some existing labor will get really cheap or maybe completely unnecessary,
Speaker 2: and then other you know, the optimistic version is that
Speaker 2: defendants or people without a lot of money get better
Speaker 2: quality representation. I get, you know, it feels like it's
Speaker 2: not gonna just it's gonna probably have very big distributional
Speaker 2: and qualitative shifts on the industry.
Speaker 3: Yeah, and this is the thing I'm also wondering. So, Okay,
Speaker 3: junior associates, maybe they they're doing less work, maybe they're
Speaker 3: slightly happier. But I guess the idea that more of
Speaker 3: the value just accrues to the partners at a time
Speaker 3: when it's harder to become partner. Uh, that seems to
Speaker 3: be the downside if you're going into the legal profession.
Speaker 1: Yeah, no, totally.
Speaker 2: Like it feels like we're at this moment and this
Speaker 2: applies to a lot of actually AI economics quest and
Speaker 2: we should definitely do more on them where people imagine
Speaker 2: or people maybe even rightly surmised that you know, there
Speaker 2: will be a lot of benefits for you know, existing
Speaker 2: holders of wealth or companies can do layoffs, right, and
Speaker 2: I don't know the degree to that which is really happening,
Speaker 2: but at least in theory, and there's going to be
Speaker 2: firing of junior workers, et cetera. But that's like a
Speaker 2: temporary condition because you know, first of all, like, Okay,
Speaker 2: a company saves a bunch of money by firing what
Speaker 2: eventually becomes characterized as gruntwork. Well, what do they spend
Speaker 2: that money on, right, because that's savings and so does
Speaker 2: that do they invest in? Does that turn into consumption
Speaker 2: for the partners? Like there are a lot of you know,
Speaker 2: people are like, oh, it's gonna be mass layoffs. But
Speaker 2: I never find these questions joy satisfying because the money
Speaker 2: doesn't disappear. It's someone's savings, and someone's savings either become
Speaker 2: someone's consumption or someone's investment, and its anyone's consumption or
Speaker 2: investment becomes someone else's income. So therefore, you know, thinking
Speaker 2: through some of these next level things I think is
Speaker 2: really important. And AI clearly seemed just like ground zero,
Speaker 2: and I do think O three is really good and
Speaker 2: everyone no, seriously, everyone needs to check it out and
Speaker 2: update their views if they haven't yet on the quality
Speaker 2: of the research you can do.
Speaker 3: It does sound like it's maybe solved. The hallucination problem
Speaker 3: was that everyone was making fun of earlier.
Speaker 2: Yeah, I mean like they're still there for sure. But
Speaker 2: because you can actually find links to documents and stuff
Speaker 2: like that, the speed with which you can get up
Speaker 2: to speed on anything is very impressive.
Speaker 3: All right, I'm gonna go test it. Shall we leave
Speaker 3: it there?
Speaker 1: Let's leave it there.
Speaker 3: This has been another episode of the Oudlots podcast. I'm
Speaker 3: Tracy Alloway. You can follow me at Tracy Alloway.
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