Cleary
Gottlieb
makes
its
money
billing
clients
for
legal
tasks.
Cleary
Gottlieb
also
owns
a
subsidiary,
ClearyX,
building
tools
to
help
clients
handle
those
tasks
on
their
own
—
and
to
do
them
cheaper
and
faster.
In
ordinary
times,
firms
don’t
cannibalize
their
own
business
model,
but
Cleary
Gottlieb
does
not
believe
these
are
ordinary
times.
ClearyX
began
as
a
captive
ALSP
performing
the
sort
of
tasks
that
clients
would
prefer
not
pay
law
firm
rates
to
perform.
But
this
month,
ClearyX
stepped
beyond
the
traditional
ALSP
role,
launching
its
own
AI
software
products
branded
as
CX+
and
marketing
them
directly
to
clients.
CX+Insights
aids
in-house
teams
trying
to
figure
out
what’s
actually
in
their
contract
portfolios,
while
CX+Transact
assists
clients
with
M&A
diligence.
ClearyX
claims
these
tools
delivered
40-60
percent
time
and
cost
savings
based
on
more
than
150
deals.
Which
is
great
for
the
clients,
but
not
necessarily
as
great
for
the
parent
institution
still
billing
by
the
hour.
Unless
Cleary
Gottlieb
is
right
that
AI
is
poised
to
steal
away
huge
chunks
of
billable
time
over
the
next
few
years
no
matter
what.
In
that
case,
the
firm
is
hedging
its
bets
by
bringing
its
credibility
to
the
disruption
party.
ClearyX
CEO
Carla
Swansburg
acknowledges
that
her
company
has
an
unconventional
relationship
with
the
firm.
“One
of
the
questions
that
gets
asked
a
lot,
and
more
of
the
partners
and
the
leadership
of
the
firm
is,
‘isn’t
this
cannibalizing
some
of
the
firm’s
business,”
she
said,
before
answering
her
own
question.
“Yes,
it
is.”
But
that
doesn’t
really
matter
once
lawyers
accept
that
it’s
work
that
largely
goes
away
anyway.
When
Claude
unveiled
a
legal
plug-in,
the
markets
briefly
—
to
use
the
technical
term
—
freaked
the
hell
out
before
remembering
that
the
dedicated
legal
AI
providers
have
a
far
better
handle
on
the
idiosyncratic
needs
of
lawyers
than
a
product
that
occasionally
wipes
a
company’s
whole
database.
But
any
legal
process
that
can
be
automated
by
seasoned
experts
can
eventually
be
mastered
by
a
language
model
given
sufficient
time.
Providers
hoping
that
legal
know-how
is
a
moat
will
find
that
body
of
water
shrinking
rapidly.
But
that
doesn’t
mean
legal
tech
providers
will
be
left
without
defenses.
Addressing
the
Claude
plug-in
sized
elephant
in
the
room,
Swansburg
explained
that
in-house
teams
“don’t
have
the
support
technology
tools”
in
the
budget
to
take
their
chances
with
a
consumer
model
and
a
slick
skill.
“They
don’t
get
the
budgets
to
buy
six
different
tools,
a
general
AI
tool,
and
then
four
point
solutions.
And
then
they
don’t
have
engineers
or
knowledge
workers
or
the
sort
of
resources
that
we
all
take
for
granted
in
the
law
firm
environment.”
While
legal
tech
may
be
wrong
that
their
expertise
cannot
be
learned,
they’re
very
likely
right
that
in-house
teams
aren’t
going
to
have
a
robust
support
staff
to
deal
with
the
fallout
when
GPT
goes
wrong.
Or
when
a
novel
legal
problem
presents
itself
requiring
a
unique
tweak.
The
cardinal
rule
of
the
computer
industry
since
its
inception
is
that
companies
salivate
over
flashy
new
products
and
features
but
the
real
value
is
in
supporting
that
product.
Research
shows
in-house
teams
plan
to
cut
outside
counsel
spend,
even
though
everyone
acknowledges
increasing
demand
for
legal
services.
That’s
an
equation
that
ends
with
in-house
teams
trying
to
tackle
more
of
the
workflow
on
tighter
budgets
and
that
screams
out
for
tech.
For
all
the
Biglaw
posturing
about
“leaning
into
AI,”
the
tasks
that
AI
is
best
suited
to
perform
are
tasks
where
clients
really
don’t
need
outside
counsel
pushing
the
button.
Whatever
the
tool,
clients
will
find
a
product
capable
of
moving
expensive
yet
automatable
work
in-house.
Trying
to
cling
to
that
business
over
the
next
few
years
will
just
end
in
massive
write-downs,
frustrated
clients,
and
damaged
relationships.
With
ClearyX,
the
firm
continues
to
profit
from
the
natural
migration
of
that
work
while
doubling
down
on
the
tasks
outside
counsel
have
to
perform.
And
even
though
ClearyX
is
a
separate
entity
and
not
necessarily
tied
to
Cleary’s
existing
client
base,
it
offers
a
warmer
handoff
if
a
client
using
a
product
developed
by
the
Cleary
brand
eventually
needs
to
hire
human
outside
counsel
for
higher
level
work.
Cleary
is,
in
a
sense,
drinking
its
own
milkshake.
Joe
Patrice is
a
senior
editor
at
Above
the
Law
and
co-host
of
Thinking
Like
A
Lawyer.
Feel
free
to email
any
tips,
questions,
or
comments.
Follow
him
on Twitter or
Bluesky
if
you’re
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and
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news.
Joe
also
serves
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Managing
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Search.