What stuck out to me when attending the TLTF Summit (https://www.tltfsummit.com/) was that everyone agreed that the incentives behind billable hours are opposite to the incentives behind implementing technology in a law firm, but it wasn’t viewed as a ‘problem’ per se, or at least not one was trying to solve. The logical next thought among conferences attendees is to think ‘who is solving this?’. It stuck out to me because it felt abnormal to be among so many entrepreneurs that unanimously recognized a problem, yet not see any companies building products to solve it. Instead of labeling it as a problem to solve with a product, vendors were discussing how to ensure their revenue model is aligned with the incentives behind billables rather than against them, e.g. usage or data based pricing so the cost can be disbursed to the client.
Is there an answer to this problem?
Clients are the most influential party to incentivize firms to use tech that would provide them better services and prices. Clients can ask firms for a tech update about what tech they’re using (example: https://www.slaughterandmay.com/our-firm/innovation/) and more importantly verify it’s actually being used once retaining them.
Sometimes the tech-stack that an RFP claims a project will use is not actually used once the RFP is approved. The easiest way for clients to hold the firm accountable is to ask them about their tech-stack. Some legal software also has a client portal aspect where the client will also be using the tech, in which case the client can just ask for their login. For example, Clearbrief has this.
Three tools clients should know that their lawyers can use:
- Spellbook:
- It can draft new clauses for you based on the existing clauses in the rest of the contract.
- It can detect clauses that are abnormally high-risk/aggressive.
- It suggests what to negotiate, e.g. “I would negotiate a smaller board. Five directors seems a like a lot, especially given X Capital would get to appoint two of them.'
For our entrepreneur friends, this is great for term sheets. The coming soon feature is even better for M&A firms because it will help with due diligence by reading documents in the data room and identifying what is out of the ordinary hence what needs further due diligence. It might say “The previous investor has high liquidation experience”, or “The advisor agreement with X advisor is abnormal”. Just imagine GPT-3 trained specifically on legal contracting. Here it is: https://www.spellbook.legal/.
- Clear|brief:
A core aspect of legal work is reviewing transcripts, or medical records to find facts or quotes to support an argument. This is what Clearbrief’s AI does in a nutshell. It contextually searches documents, most often transcripts, to find the quote in the transcript to support an argument. The innovation is that rather than click ‘find’, then typing the exact word you want to find in the document as you would in Adobe or Word or any PDF that has been OCR’d, Clearbrief allows you to search for a concept. For example if the transcript contained ‘fooled around with’, using the AI contextual search you would be able to find this section by searching ‘cheated on’. Obviously you couldn’t do this in Adobe.
Clearbrief is a Microsoft Word Plugin, so as a paralegal is typing up a demand letter in Word they highlight their key arguments, and Clearbrief will find the relevant section to support it in the transcript and add in a hyperlink to that section to their demand letter.
Key Definition - 'OCR': The process of making a document or image searchable, by identifying the characters in the document as letters.
- Alexsei:
Alexsei is a legal memo drafting software powered by AI. When Alexsei first came to market, it reduced the work load of a lawyer by eliminating the need to find and review cases and legislation and write a legal memo, to only needing enter the facts of the case and a question about the legal issues into their software. From this it produces a memo, about 5-10 pages in length, with excerpts from relevant cases and answering the question. BUT, now that GPT-3 is integrated into Alexsei, the lawyer no longer needs to translate the legal facts into an intelligently worded question that identifies the legal issue.
Alexsei has updated their product so that all the lawyer needs to do is describe the legal research and case facts generally (less structure required and no need to separate the question from the facts). Alexsei’s AI reads this and formulates a legal question that identifies the legal issues that needs to be researched. THEN it generates the memo as per usual (except far cooler than ‘usual’ if you’ve never seen it generate a memo before). Here’s an example.
Clients are the most influential driver of law firms adopting a more client friendly billing structure and of adopting technology. However the recent news in the crypto industry means many big law firms have lost revenue from losing Web3 clients, so that could be a motivator to adopt tech, but as per usual only if it reduces cost and increases revenue. What could clients say to motivate law firms? They can ask the firm if they have published tech updates on their site. Here is an example tech update: https://www.slaughterandmay.com/our-firm/innovation/.
Ask for the client-side login to tech the firm is using (such as Clearview), and ask if they have any alternative pricing structures such as billing for the project or transitionally, or on a monthly subscription. Legal payment providers like Gravity Legal facilitate monthly billing for firms. It’s easy if the tech is one used by both client and firm and the client is already aware of the tech. An example of this is Formally which helps immigrants to the US generate their immigration petition depending on which Visa they need, and has a login for both the applicant and the law firm to upload and review documents. An immigration client can indicate that they’re only retaining a firm that uses Formally.
