It’s a common theme among law firm leaders, particularly big law firm leaders, to claim that their firms have some sort of vaunted “culture” that has been painstakingly developed over many years. This incredible culture, the theory goes, imbues the firm with some kind of wonderful familial aura, enabling the firm and its lawyers to respect a time-honored profession.

Based on what I’ve seen lately, I have to largely call bullshit on all that. Yes, at one time, the practice of law was indeed a profession. Lawyers practiced in stable firms, firms that often had partners who had been there their whole careers. Compensation was often lock step under the one for all theory. As partners aged or had some bad years, they remained partners, albeit at perhaps reduced compensation. Under this milieu, many firms did indeed have a culture developed by long time partners who understood how the firm developed and grew. There was a history made by people who knew their seniors when they were young and who now were seniors to the next generations. Culture was important.

But something changed. As profits per partner began to rule the day, law firms turned from culture to profits above all. Want some proof? Here are three developments that were recently reported:

3 recent reports bear this out:

1.        Moving associates to full partnership has been replaced by the practice of creating large classes of “nonequity” partners. A recent article shows just how pervasive this has become. Let’s face it: nonequity partners are just glorified associates. They have no stake in the partnership; they have little control over their work and lives.  Why has this happened?  It’s all about money and control. The more nonequity partners there are, the fewer equity partners there are to share in the overall pie. And as discussed below, more money is available to appeal to and recruit lateral partners with significant books of business. Firms can set salaries of nonequity partners with impunity since they are, by and large, fungible. Nonequity partners are also easier to manage and control. Equity partners, on the other hand, have independence, especially if they have big books of business. Yes, nonequity partners can become equity partners, provided they develop big books of business. But law firms today are controlled and run by partners with significant books of business. A culture of inclusion of only one type of partner: those motivated by money above all else. Other voices are no longer heard.

2.        Another article emphasizes the increased de-equitization of equity partners. Aren’t performing and continuing to bring a big book of business as equity partner year after year? Firms simply de-equitze you and demote you to the ranks of the nonequity. This leaves more money for the rest of the equity piggies at the trough. Firm culture and long term loyalty be damned. Again, the equity ranks gradually are composed of those who have only one motivation. It’s all about the money

3.        The culture of most firms is now dictated by lateral partners, as has been often reported. Lateral partners don’t give a whit about “culture.” They know little about the history of the firm. None of that matters. What matters is money and power.  On the management side, the opportunity to increase profits by bringing in laterals at the expense of firm culture and tradition is just too tempting. Want to increase profits? Bring in lateral with a big book of business. If you have a big book of business and believe you aren’t making enough as an equity partner? Leave, go someplace else that will guarantee you more. Firms will often claim that they take steps to ensure that laterals understand and respect firm tradition and history. But really, how much respect can you have if your primary motivation for joining a firm is to make more money and money is your primary focus when you get there?

What Does This All Mean?

What does this all mean? Making partner ain’t what it used to be. Cohesive law firms with partners devoted to the firm and their partners are becoming a thing of the past. It’s hard to have real culture when equity partners come and go, and you aren’t secure as an equity partner. Indeed, making equity partner may soon be something only a few achieve with big books of business. Firms are managed mainly by those who, at the end of the day, focus only on making money and profit.

Some would say that the olden tradition based law firm just doesn’t work in today’s days and times and I’m just being naive. Yes, other businesses focus on money and bottom-line profit just as much, if not more so.

All that may be true. But let’s not pretend we are something we aren’t. That we are family, that we have some deep-seated and real culture, and that we are a profession. The truth is big law firms are businesses and often cutthroat ones at that. And management of law firms is a business, a business more and more focused on the bottom line and the all important profit per partner.

One GenAI legal disruption that’s not talked much about is its potential to head off disputes and problems in advance. Elimination of disputes means less need for lawyers, particularly litigators. I have written about the potential for technology to do just this before. But GenAI and AI have the potential to advance preventive lawyering in ways we haven’t thought of. I learned of one interesting way in a recent conversation with Bruce Kiefer, Vice President of Software Engineering of OpenText.

OpenText is a giant enterprise information management company. It specializes in developing software solutions that help organizations manage and utilize unstructured data, such as documents, emails, and multimedia content. 

E-discovery is all about data and data management.

In the past, it has offered a variety of e-discovery related products. But like many e-discovery vendors, it is branching out in various ways, a development about which I have written before. After all, E-discovery is all about data and data management. However, the tools used to find, identify, and determine the relevance and significance of data can be used for tasks beyond e-discovery.

Kiefer told me he sees the potential for “AI agents to survey trends to manage risk portfolios.” By this, he meant the potential for using AI on a forward-looking basis instead of a reactionary basis. He believes, for example, that AI can be used to identify trends and correlations. This, in turn, would enable in-house counsel to perhaps head off problems before they develop. He gave as an example of the problem of airplane exit doors flying off airplanes. Using an LLM to look at all the data surrounding an incident like this would enable a better and faster cause analysis. It would also enable airlines to more timely prevent future incidents from occurring.

We also talked about using LLMs to search through complaints and pleadings nationwide. This would enable in-house counsel to determine whether litigation trends were developing. They could then cogently develop strategies before litigation got out of hand. In-house counsel could also use these tools to look at publicity to determine if a litigation trend could develop.

A human still has to determine if something is interesting and merits further investigation. Or if it is completely irrelevant

Of course, all of this still requires a human to determine if the data really suggests a trend or correlations. Just because something happens close in time to an event doesn’t mean it’s causally related. A human still has to determine if something is interesting and merits further investigation. Or if it is completely irrelevant.

But the opportunities for this kind of forward-looking strategy are significant. Kiefer told me that using this approach would allow for better allocation of capital to risk. LLMs can help identify what is truly a risk and enable in-house counsel and business units to direct capital to that risk. It would prevent the allocation of dollars to what might appear to be risks but really aren’t.

GenAI and LLM will enable in-house counsel to do more and better preventive lawyering.

GenAI and LLM will enable in-house counsel to do more and better preventive lawyering. They could reduce the number of situations the analysis shows could lead to disputes and litigation. A few years ago, I heard a presentation by an in-house counsel of a trucking company in which a similar hypothesis was advanced. Looking at data showed truck drivers were much more likely to have an accident when they did not take their vacation benefits. The result was the imposition of mandatory vacation policies. The number of accidents, in turn, were ultimately reduced. Of course, back then, such an analysis was time consuming and expensive. Now, it can be done with the push of a button.

Lots have been written about what GenAI and AI will do to the way lawyers practice. We may have missed the most significant impact of all: using AI tools to prevent situations that could require lawyering in the first place. Several years ago, I wrote about how technology might disrupt law by eliminating disputes. I got a lot of pushback to that idea. But with GenAI and LLMs, I believe more than ever that legal will move to preventive lawyering. Just as in the medical profession, there will be less reactive lawyering, at least for litigation and dispute management. I’m not sure if law firms are ready.

The NetDocuments user conference, Inspire 2024, took place in Atlanta this week. NetDocuments is a sophisticated cloud-based document management system. It offers an end-to-end platform for document and email organization and management. NetDocuments has over 7,000 customers globally.

Three things stood out from the Conference.

  • NetDocuments is positioning itself to be a player in the AI, GenAI, and automation market by combining these tools with its document management services platform.
  • NetDocuments is positioning itself as a one stop platform for all document management services for customers’ content.
  • Most importantly, the tools NetDocuments is offering and will offer in the future provide a glimpse into just how disruptive GenAI will be in the legal marketplace. And how ill-prepared we are for it.
Continue Reading Three Takeaways From NetDocuments’ Inspire 2024: GenAI, One Stop Services and BTW, We Need to Talk

AltaClaro, an innovative provider of interactive, experiential legal training (about which I have written before), recently announced the launch of a new course, Guiding Effective Use of GenAI: A Supervisory Course for Law Firm Partners

The launch is noteworthy for several reasons. The course is unique in that it focuses not on summer associates or even associates but on partners and senior legal professionals. It’s specifically designed to equip partners and managers in law firms and in-house legal departments with the skills and knowledge needed to effectively oversee the use of Generative AI (GenAI) by everyone on their teams. AltaClaro developed the supervisory course in collaboration with K&L Gates law firm and its AI Solutions group. (Interestingly, according to Abdi Shayesteh, AltaClaro CEO, K&L was AltaClaro’s first client some five years ago).

Continue Reading Empowering Lawyer Leadership: K&L Gates and AltaClaro’s GenAI Supervisory Course for Partners. Yes, Partners.
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One of the central themes of the recent Clio user conference held in Austin was the anticipated death of the billable hour. Jack Newton talked a lot about this in his keynote, as did other Clio executives in presentations and their talks with me.

The idea is based on one of the more startling findings announced by Clio at their 2024 annual Conference that just concluded. According to Clio’s Annual Legal Trends Report,  AI can automate up to 75% of the work for which legal professionals currently bill. That’s a startling finding and should put fear into the hearts of managing partners. This billed time percentage is significantly higher than that reported by Goldman Sachs in March of 2023. At that time, Goldman Sachs believed 44% of legal tasks could soon be automated.

Continue Reading Clio’s Legal Trends Report 2024: AI, Automation and the Death of the Billable Hour?

This week I’m attending the annual extravaganza put on by Clio, the cloud based practice management provider. ClioCon never disappoints. In addition to offering sessions devoted to its products, it also provides presentations that make you think about broader issues that impact the profession. One of these session was the Tuesday Keynote by Nita Farahany. Farahany is the author of The Battle for Your Brain: Defending The Right to Think Freely in the Age of Neurotechnology.

The thrust of Farahany’s talk was that technology can detect brain activity that reveal things like your mood, what you find appealing and not, and your memories. All of these can result in the creation of data. All that data is the world of GenAI can be used for tremendous good in the treatment of things like mental illness, epilepsy, and other neurological diseases. It can be used to detect fatigue in workers or the attention of students. But unchecked, it can be used for a lot of bad as well.

Continue Reading Neurotechnology in Litigation: The End of the Beginning or the Beginning of the End?

I am thrilled to post this insightful article from my good friend, Tara Cheever. Tara is a co-founder of LitSoftware. LitSoftware suite of products, including TrialPad and TranscriptPad, among others, revolutionized how litigators practice their cases. Thanks Tara!

A cultural clash has been brewing within law firms for years. On one side are midlevel associates who grew up immersed in the sleek, intuitive world of Apple products. On the other side, legacy IT teams prefer entrenched Microsoft-based infrastructure, and are often dismissive of Apple altogether. As this clash reaches a boiling point, law firms may soon face an existential choice: stick with what’s comfortable for their IT departments, or embrace the future of technology that a growing number of associates not only prefer but demand.

Continue Reading Who’s Afraid of the Big Bad Apple: Is Your IT Team Holding You Back?

As many of you know, I regularly participate in Bob Ambrogi’s LegalTech Week journalist roundtable on Fridays. This past week, we actually did the roundtable live and in person at Relativity Fest. I raised two articles/developments during the roundtable. The first one had to do with the settlement by DoNotPay with the FTC, which Richard Tromans of Artificial Lawyer analyzed in a recent article. DoNotPay was fined for alleging offering legal services to consumers that they could not deliver. (Josh Browder,the owner of DoNotPay was not named as a defendant in the action).

The second was the announcement that Rocket Lawyer had been granted approval by the Arizona Supreme Court to operate as an alternative business structure. This approval paves the way for nonlawyer law firm ownership. Rocket Lawyer has previously secured similar permissions in Utah and the UK. I usually don’t post what I talk about during the roundtable since that would be a little redundant But the two articles raise some access to justice (A2J) issues that merit additional consideration and thought.

Continue Reading Access to Justice: Perfection Can’t Be the Enemy of Progress

I’m attending Relativity Fest this week in Chicago. Relativity Fest is put on by the e-discovery software provider Relativity. Relativity is one of the largest discovery software providers. Relativity Fest is its extravagant user conference. According to Relativity, there are a record 2000 attendees at this year’s show, the 15th annual one.

I attended a panel discussion early in the conference on the findings of an annual in-house counsel Survey conducted jointly by the consulting firm FTI and Relativity. On the panel were Ari Kaplan, the principal investigator for the Survey, Adam Weiss, Relativity’s Chief Legal Officer; Wendy King, Senior FTI Director; and Celia Perez, in-house counsel at FreightCar America.

This was the sixth such Survey. Kaplan talked to some 34 in-house counsel in 11 countries.

Continue Reading Relativity Fest 2024: E-Discovery Providers Like Relativity Pave The Way for Legal Embrace of GenAI

I recently chatted with Noah Waisberg, co-founder and CEO of Zuva, an M&A contract analysis firm. Noah was kind enough to give me a copy of the book he and Dr. Alexander Hudek recently authored AI For Lawyers, which is an excellent read.

In his book, Waisberg and Hudek talks about something called the Jevons Paradox. The Jevons Paradox is that generally speaking, when the price of a good or service comes down, consumption of it will typically go up. Waisberg and Hudek postulate that the same should be true for legal. As automation, AI, and Gen AI reduce the cost of legal services, there should be more cases brought. 

In my view, that means greater demand for legal services. More demand should mean more revenue and profit for the providers of legal services.

Continue Reading Unlocking Potential: Can AI and Gen AI Can Transform Insurance Defense and Carrier Relationships?