One
of
the
panels
assembled
by
NetDocuments
at
its
Inspire
Conference
focused
on
AI’s
broader
implications
for
legal
practice.
The
panel
was
composed
of
Zach
Abramowitz,
Nicola
Shaver,
Zach
Warren,
and
Jennifer
Poon
of
NetDocuments.
These
folks
are
among
the
most
astute
observers
of
legal
tech,
AI,
and
innovation
that
I
know.
They
advise
law
firms.
They
undertake
surveys
and
analysis
of
the
market.
They
keep
their
fingers
firmly
on
the
pulse
of
what’s
going
on.
When
they
talk,
I
listen.
And
they
said
a
lot.
Here’s
a
rundown.
ROI
and
AI
The
panelists
agreed
we
have
not
yet
figured
out
how
to
measure
AI’s
ROI.
Quite
simply,
what
AI
does
can’t
necessarily
be
quantified
on
financial
statements
ruled
by
bean
counters.
Most
technology
requires
that
many
employees
in
an
organization
use
it
in
a
certain
way.
AI
is
different.
Its
first
adopters
were
ordinary
consumers,
not
businesses.
People
use
AI
like
a
personal
assistant
in
various
and
individual
ways
to
help
them
do
work
(and
lots
of
other
things).
People
want
to
use
it,
are
going
to
use
it,
and
are
happier
when
they
do.
But
this
kind
of
use
and
benefit
does
not
show
up
on
a
P
and
L
statement.
Defining
ROI
for
AI
is
also
hard
because
while
it
may
improve
efficiency,
it
can
reduce
billable
hours,
so
the
ROI
may
even
appear
negative.
But
AI
offers
other
intangible
benefits
like
happier
employees
which
businesses
retain
longer.
It
gets
better
quality
results.
It
creates
the
ability
to
do
things
that
couldn’t
be
done
before.
All
things
real
but
intangible.
Another
intangible:
AI
can
enable
predictive
analytics
which,
in
turn,
leads
to
preventing
legal
disputes
and
the
associated
costs.
But
despite
the
fact
avoided
costs
are
hard
to
quantify,
businesses
may
be
ready
to
embrace
this
one.
Here’s
why:
When
I
was
a
younger
lawyer,
I
had
an
idea
to
work
with
clients
to
help
them
avoid
litigation.
I
thought
this
advice
would
be
valuable
and
I
could
charge
for
it.
One
of
my
mentors
pooh-poohed
the
idea.
Why?
Because
then
and
now,
you
can’t
quantify
the
value
of
avoiding
litigation.
So,
when
I
would
propose
charging
for
the
advice,
the
question
would
be:
show
me
the
dollar
savings
I
will
get
for
this
cost.
Which
can’t
be
done
because
you
will
never
know
what
you
have
avoided.
That
may
still
be
true
today,
but
there
is
a
big
difference.
The
cost
of
using
AI
to
avoid
claims
is
so
negligible
as
not
be
a
significant
factor.
If
it
costs
little
to
predict
and
avoid
litigation,
it’s
a
no
brainer.
Plus,
according
to
the
panel,
CEOS
and
CFOs
may
now
be
more
concerned
than
ever
with
avoiding
litigation.
They
are
certainly
interested
in
avoiding
legal
costs.
The
panel
was
right
though:
AI
is
so
different
that
traditional
ROI
measurement
tools
just
don’t
work.
We
need
new
ways.
Pricing
and
Legal
Work
The
panel
concluded
that
the
use
of
alternative
fees
is
rising.
AI
would
seem
to
inevitably
compel
it.
But
use
of
those
models
will
require
a
huge
change
in
most
law
firm
culture.
Law
firms
will
have
to
rethink
how
they
compensate
and
advancement
people
with
these
models.
They
will
need
to
rethink
the
entire
leverage
concept.
Which
leads
to
an
Abramowitz
idea
(which
he
has
espoused
before):
Because
the
challenges
to
law
firms
to
shift
mindset
are
so
great,
AI-first
law
firms
are
on
the
rise.
These
firms
ditch
the
leverage
model
and
delegate
to
AI
many
of
the
tasks
which
only
traditional
law
firms
could
previously
supply.
Which
raises
the
question,
why
need
a
law
firm
at
all?
They
were
needed
to
make
the
leverage
model
that
has
made
lots
of
lawyers
rich.
But
at
an
AI-first
firm,
your
costs
are
negligible.
So,
whatever
revenue
you
produce
is
almost
all
profit.
And
Abramowitz
says
traditional
firms
are
losing
significant
business
to
these
firms.
Nevertheless,
law
firms
have
continually
been
able
to
raise
rates,
often
substantially,
to
combat
revenue
loss.
But
that
won’t
continue.
And
we
are
going
to
see
clients
demand
greater
efficiencies
from
their
firms
through
AI.
AI
threatens
law
firms
in
another
way,
according
to
Warren.
In-house
counsel
are
insourcing
more
work
with
AI.
This
trend
could
become
more
and
more
significant
meaning
less
and
less
revenue
for
law
firms.
But
the
panel
agreed
that
wholesale
reduction
in
lawyer
count
has
not
yet
happened.
Headcount
reductions
have
occurred
in
other
businesses,
however,
particularly
in
tech.
Of
course,
as
Abramowitz
has
opined
and
I
have
written,
there
is
always
the
possibility
AI
will
result
in
more
legal
work
shielding
for
the
time
being
some
law
firms
from
significant
revenue
disruption.
I
think
it’s
too
early
to
write
the
obituary
of
the
traditional
law
firm.
Lots
of
lawyers
get
security
and
their
identity
from
their
firms.
And
until
law
firms
are
ready
to
completely
change
their
culture,
a
culture
builds
entirely
on
the
billable
hour,
we
aren’t
going
to
see
wholesale
rejection
of
the
billable
hour
either.
Unless
clients
aggressively
demand
it,
or
flock
to
firms
that
embrace
other
models,
which
they
haven’t
yet.
AI
Adoption
by
Law
Firms
AI
drives
efficiencies.
That’s
well
and
good
when
it
reduces
human
time
for
non-billable
tasks.
Not
so
good
when
it
reduces
billable
time.
Hence
adoption
is
often
slow
walked.
But
Warren
pointed
out
somewhat
surprisingly
that
overall
legal
is
near
the
middle
of
the
pack
of
businesses
in
terms
of
AI
adoption.
This
may
be
because
adoption
is
particularly
gaining
ground
with
in-house
counsel
who
are
having
trouble
keeping
up
with
the
demands
placed
on
them.
If
so,
clients
may
soon
demand
their
firms
do
likewise.
Another
trend:
whether
there
are
firm
polices
about
use
of
models
like
ChatGPT,
workers
are
significantly
using
them
because
they
are
easy
to
use.
This
creates
a
paradox:
individuals
in
law
firms
are
adopting
AI
faster
than
their
firms.
The
most
significant
point
made
by
the
panel
is
one
I
have
also
noticed.
Many
lawyers
are
still
just
sticking
their
heads
in
the
sand
and
not
yet
concerned
about
the
changes
AI
will
bring
to
their
work.
Their
attitude
is
like
that
of
T.
Thomas
Andrews,
designer
of
the
Titanic,
after
it
rammed
the
iceberg:
“I
have
designed
this
ship
so
that
it
will
float
forever.”
We
all
know
how
that
turned
out.
The
Future
The
panelists
agreed
that
there
is
lots
of
negativity
about
AI
right
now.
And
firms
are
having
trouble
keeping
up
with
all
the
developments.
But
there
are
a
lot
of
positive
things,
many
of
what
are
not
yet
imagined,
that
are
coming.
And
all
agreed
that
at
the
end
of
the
day,
AI
is
not
an
incremental
shift
but
a
profound
one.
AI
that
can
understand
us
and
output
to
us
in
ways
we
understand
is
revolutionary.
It’s
unprecedented.
A
Recession
Away?
While
the
panel
didn’t
discuss
it,
I
wonder
if
we
are
just
an
economic
downtown
away
from
an
explosion
of
AI
adoption
and
corresponding
disruption.
Where
we
are
today
with
AI
is
like
where
we
were
with
remote
working
tools
pre-COVID.
Many
of
the
tools
existed
but
few
used
them.
When
COVID
hit,
there
was
a
sea
change,
and
we
never
looked
back.
Similarly,
if
there
is
an
economic
downtown,
businesses,
clients,
and
even
law
firms
will
be
forced
to
become
much
more
cost
conscious,
and
the
efficiencies
of
AI
can
no
longer
be
ignored.
We
better
be
ready.
Author’s
note:
While
much
of
what
is
contained
in
this
post
came
from
the
panelists,
I
have
weaved
some
of
my
thoughts
in
as
well.
I
know
the
panelists
and
don’t
think
they
will
take
offense.
Stephen
Embry
is
a
lawyer,
speaker,
blogger,
and
writer.
He
publishes TechLaw
Crossroads,
a
blog
devoted
to
the
examination
of
the
tension
between
technology,
the
law,
and
the
practice
of
law.