There’s little doubt that In today’s rapidly evolving legal landscape, the integration of artificial intelligence (AI) into legal is poised to change the way lawyers operate. Clio’s unveiling of Clio Duo, a multifaceted AI tool designed to assist legal professionals, raises some interesting questions about the future of the legal profession, what constitutes success and how being a good lawyer is defined.
Clio CEO Jack Newton introduced Clio Duo today at ClioCon. According to the press release, Clio Duo will serve as a coach, intuitive collaborator, and expert consultant to legal professionals. Clio claims that Duo will enable customers to unlock their own data, become more effective business owners, and get better outcomes for clients. The video of the tool unveiled at the keynote showed a person asking Duo about the status of bills and cases, to summarize documents and for help getting ready for client meetings. Like so many vendor introductions in this arena, the Clio GenAI tool is a promise, not a reality today. But that’s perhaps to be expected, given how quickly the area is being developed.
Will AI replace lawyers?
But the Clio approach to the announcement was a little different. Before talking about Duo, Newton posed one central inquiry: Will AI replace lawyers? Newton, in his Keynote ClioCon address, offered some insights on this question.
Newton began by dispelling the common fear that AI will lead to a decrease in demand for legal services. Drawing parallels with the introduction of spreadsheets in the accounting field, Newton argued that disruptive technologies historically create new avenues for growth rather than rendering professionals obsolete. While the fear was that the spreadsheet would replace accountants, Newton cited data that the number of accounting professionals since its introduction actually increased. Why?
Newton noted that there is an inherent fallacy that Luddites often employ with innovation fear mongering. And that is that there is only a finite amount of work to be done. So, if an innovation takes away some of this work, there will be less work and less need for humans to do it.
AI will automate routine tasks, freeing up lawyers to focus on more complex, billable work
But with accountants and, Newton argues, perhaps with lawyers, more and different types of work can be done once AI and automation replace work that humans don’t necessarily need to do. The crux of his argument lies in the idea that AI will automate routine tasks, freeing up lawyers to focus on more complex, billable work.
Newton has long claimed that a tremendous amount of legal needs are not being met, which is no doubt true. The problem is that these needs are not met because the cost of serving the needs is more than this market will bear. Lawyers’ hourly rates are simply too high for people with unmet needs can afford. Yet, to meet expenses, pay study loans, and have at least a modest standard of living, many lawyers can’t charge the kind of rates to tap into this market.
Newton’s thesis is that AI and automation can do much of the work to meet these needs and reduce the amount of work humans need to do. This will enable lawyers to do more with less and increase revenues from this work. Legal services will become more affordable and hence drive more work within this market to lawyers. Lower dollar value but more matters can be handled.
The biggest challenge lies in the traditional billing model, which relies heavily on billable hours
However, the optimism surrounding AI’s potential impact on the legal market is tempered by practical considerations. The biggest challenge lies in the traditional billing model, which relies heavily on billable hours. Since there are only so many hours that can be billed in a given time period, the only way to make this work affordable but profitable is for lawyers to charge for the task more than for the time. As history has repeatedly shown, however, for a whole lot of reasons, driving a stake in the billable hour model has proven elusive. (Somewhat ironically, many of Clio’s products are based on the premise many lawyers need help in recording, billing, and collecting fees based on the billable hour.)
But Newton’s second reason for being optimistic about what AI can do for the legal market may be more realistic. Clio’s yearly Surveys clearly establish that lawyers spend too much time on nonbillable matters. I have discussed before what may be AI’s effect on law firms’ back office work. If AI can replace that nonbillable work, then a lawyer can spend more time on billable matters.
And by necessity, many law firms have substantial back office personnel doing things like facilitating billing and collections. If AI tools like Clio Duo automate many of these tasks, then many of these costs (and people) may no longer be necessary. Again, history may be instructive. When I was a young lawyer, we had multiple secretaries who would take lawyers’ words and create documents. Some lawyers, myself included, had not one but two and sometimes three secretaries. Go to a law firm today, and you see lots of empty secretarial stations and cubicles. Why? Word processors eliminated the need for many secretaries.
And while spreadsheets may not have reduced the number of accountants, they may very well have reduced the number of bookkeepers, for example. The reduction of personnel directly reduces costs, assuming of course that the cost of the technology is less than the overall human costs.
Again, all of this assumes that there is more work out there than lawyers and legal professionals can do if only they had more time. I think this is true and not true. Talk to any good lawyer and ask them if they could do more for their clients and serve them better if they had more time. The resounding answer will be yes. But the true answer may not be the same for lawyers who are not so good. Who do not look for and see opportunities and new ways to get work done.
For proficient lawyers willing to embrace technological advancements, AI represents an unprecedented opportunity
The idea that lawyers using AI will replace those who don’t has been expressed so often that it’s almost cliche. But I don’t think it’s entirely accurate. For proficient lawyers willing to embrace technological advancements, AI represents an unprecedented opportunity to enhance their practice, tap into new sources of work, and ultimately boost profitability. However, this increase in work and profitability could come at the expense of those lawyers who do not see opportunities.
Innovation and adaptability will become the hallmarks of successful legal professionals, of what is considered a “good” lawyer. On the other hand, lawyers who resist change and overlook the potential offered by AI may find themselves marginalized, unable to compete in an increasingly tech-driven legal landscape. Being experienced, and knowledgeable substantively may no longer be enough to compete in the brave new world
For good lawyers, AI poses an opportunity. For bad lawyers? It may be a disaster.