We recently had the pleasure of being panelists on the opening plenary at ABA TECHSHOW 2024. We discussed emerging technologies and the future of legal services as our panel intended to set the stage for the presentations over the following three days. We thought we'd share some of what we covered and some other insights we took away from TECHSHOW.
For some perspective on how much things have changed with legal technology and the practice of law, but also how much they haven’t, at the start of our panel we asked attendees to go back to 1985––38 years ago. In 1985 the Titanic was located, Live Aid occurred, New Coke arrived and we had one of the coldest winters on record. 1985 was also the year of the first TECHSHOW (although it wasn’t called TECHSHOW until 1990). The hot topic at the first TECHSHOW, which had more than 1000 attendees, was how emerging and new technologies were going to automate the practice of law.
The automation of tasks in a law office has been an often-repeated topic of TECHSHOW presentations over the years. In many ways artificial intelligence (AI) continues that theme--although beyond automating basic tasks in a law office, it can also automate the legal-reasoning, analysis and writing you do as a professionally trained lawyer.
As you might expect, AI was by far the most frequently mentioned topic at TECHSHOW 2024. There were numerous sessions that directly focused on AI, and it came up in one way or another in most other sessions at the conference. AI was discussed on multiple occasions by most attendees, and it was part of the sales pitch of many vendors on the EXPO Hall floor. We were both surprised at how AI-based technologies are now available in many commonly used law office software products.
There is no doubt that AI will have a profound impact on how the work is done in a law office setting (more on this below) but there are other changes in the legal services arena that you need to consider.
Many legal needs surveys have been done over the years, and while the results vary, most conclude that lawyers provide services to roughly 15 percent of the people that have legal issues. There is a lot of money here, $375 billion annually in the United States, and $850 billion worldwide. And lawyers, and our regulators, generally have worked to vigorously protect our 15 percent of the legal services pie. That is shortsighted. We are failing to deliver legal services to the millions of people in the remaining 85 percent of this pie.
We ignore this 85 percent at our peril. In just a few decades the internet obliterated the centuries-old monopoly that lawyers had on the access to and delivery of legal information. Today, online self-help services are helping to meet the legal needs of the 85 percent of people that most lawyers ignored in the past, as well as people who have sought traditional services from a law firm.
There will still be a market for traditional legal services, but we believe that generative AI will cause such services to shrink. Combining generative AI with the internet will create an opportunity for lawyers to deliver legal services to those consumers who need help with their legal matters but have not been able to afford them. That affordability for consumers can still mean profitability for lawyers, but that may come in the form of flat fees.
The demise of the billable hour has been a repeated prediction at TECHSHOW sessions over the years. But like Paul McCartney, the billable hour is still a going concern. It is easy and remains the predominant way legal services are billed today, even though it doesn’t encourage efficiency or innovation. In some firms, looking at the profitability of individual lawyers, clients or practice areas is avoided because it could lead to uncomfortable insights and conversations. Once firms and clients understand the benefits of alternative fees, they are more open to exploring and implementing them, and we are seeing more firms do so. The key to figuring out how to implement any kind of alternative billing is knowing what your actual total costs are for particular matter types, or stages in matters. In the past most firms didn’t have or couldn’t easily access this data. The good news is that the practice management tools we have today give firms easier access to this information.
In several states––Washington, Utah, Arizona, Minnesota, New Hampshire, Oregon, Colorado––paraprofessionals have received limited licenses/Unauthorized Practice of Law (UPL) waivers to practice in certain areas, with educational and oversight provisions. The approaches vary slightly by jurisdiction and are under consideration in other states.
The key point our plenary co-panelist Jayne Reardon forcefully made: The practical result of the current regulatory approach and rules continues to limit the delivery models for legal services. Five or six years ago when the ABA passed a resolution encouraging state bars to review their regulatory schemes, many thought we would see changes and that more firms would adopt different delivery models, such that we’d see more limited scope representation, more virtual practices and other business models. We’ve seen a few such as Hello Divorce, the Subscription Lawyer and several others, but it has not been widespread. We feel generative AI and other emerging technologies will accelerate these changes. That is the opportunity that TECHSHOW can help lawyers achieve.
It is clear now that large language models (LLMs) and generative AI will have a profound impact on most practices and will force changes within the profession. Yet lawyers at the conference and throughout the world are only starting to evaluate how we will work with generative AI to harness and maximize the value we can deliver to our clients. Will lawyers and paralegals use it as another tool to solve client problems? Will some firms create client-facing generative products for our clients to query and get authoritative and quality on-demand answers? Will this technology handle certain tasks quickly, allowing humans to do more complex counseling and collaboration, as well as build better relationships with existing clients? Of course, all these questions lead to more questions.
We believe generative AI will significantly impact inventory of legal tasks and services. There will be fewer easy legal matters and the “grunt” work on many tasks will no longer be needed. This will lead to a diminished need for associates, and likely to a re-pricing of services (i.e., especially to flat fees rather than strictly by the hour). In larger firms, the partner pyramid may flatten. Leverage must be reimagined. It seems that firms that adopt generative AI will save labor, ultimately reducing staffing costs. Will those resulting profits be kept by firm owners or passed along to consumers? If costs go down, will fees go down, thereby attracting more clients? As you review your potential uses of AI in your firm, start to identify the roles in the firm that would be best positioned to use generative AI and what training they may need. Over time, we can identify positions that will be transformed or augmented. Don’t forget that your nonlegal competitors are looking to serve your current clients by doing the same thing.
Our discussion would not have been complete without a talk about legal ethics. Whenever there is a powerful new technology, ethical warnings explode on the scene. Remember when social media hit the scene and many CLEs focused on the ways that lawyers can get in trouble, rather than focusing on educating lawyers how to use social media ethically and profitably? Email was going to bring the downfall of the profession. Yes, a lawyer or two will fail to educate themselves and will veer off course, make mistakes and/or violate the Rules. We need to stop scaring lawyers away from new technology. It seems that lawyers are being way too cautious because of these scare tactics. Generative AI can be used ethically and is an important labor-saving device that will allow us to be more efficient and remain competitive. Competence requires us to balance the benefits and risks of new technology, not just avoid it because of the real or perceived risks.
The world of legal services is changing around us, whether we want it to or not. The proportion of legal services being provided by traditional law firms is shrinking, and while it will remain, it is one of many niches and opportunities that exist. To get a clearer picture on the future of legal services, read The Future of the Professions: How Technology Will Transform the Work of Human Experts, by Richard Susskind and Daniel Susskind.
Many of the predictions in earlier editions of this book have come to be today (the latest edition was published in June 2022). Nothing we have read paints a clearer picture of the future of legal services. Read it to help you figure out where you want and need to take your practice.
