Last
week, a
legal
tech company
Lawhive reportedly purchased
a
UK
law
firm
lock,
stock,
and
barrel. According
to a story about
the
acquisition, the
law
firm,
Woodstock, specializes in
property
law.
(Unlike
in
the
US,
UK
regulations
permit
non-lawyer
entities
to
own
law
firms.)
This
appears
to
be the
first
or
at
least
one
of
the
first
examples of
a
legal
tech
company
buying
a
law
firm.
The Lawhive Acquisition
The
story
describes Lawhive as
an
AI-powered
law
firm. It
further notes that
its
AI
assistant,
Lawrence, is
designed to
handle
various
tasks including drafting
documents,
conducting research, and
managing
cases. Lawhive operates
in
various
practice
areas including property. Google
is a significant
investor
in Lawhive according
to
the
story. Lawhive also
operates
in
the
US.
Among
other
things, Lawhive promises
to
get
quotes
for
legal service for
its clients at up
to
half
the
cost of standard law
firms.
And often
for
a
flat
fee.
The
Significance
and
Concerns
The fact
that
an AI-based
legal
tech
vendor
owns
and
controls
a
law
firm
could
have
a
significant
impact. Such
a
vendor would
have
clear incentive to reduce
costs and
increase
profits by
utilizing its
AI
tools
to
do
most
of
the
work
historically done
by
lawyers.
It
could
thereby
reduce
staff to
recoup
its
investment.The
services
traditionally performed
by
the
lawyers
and
legal
professionals
in
such
a
law
firm would
now be done
by
AI,
replacing
humans
as
the
primary
provider
of
the
legal
service
offered.
I
wondered in
such
a
case whether
and
how
the
work
being
done
by
such
an
acquired
law
firm
in
the
future
would
be
transparent to its
clients. Would
clients
know
that
AI,
not
human
legal
professionals,
was
handling
the
majority
of
their
work?
Should
clients
be
informed
about
the
vendor’s
ownership
of
their
law
firm?
In
addition,
as
the vendor’s
AI
tools
become
more sophisticatedand
do more,
would
proper
precautions
be
taken
to
guard
against
hallucinations
and inaccuracies
that bedevil
all
GenAI
tools?
Vendors
typically stretch
the
capabilities
of
their
tools
and
downplay
the
hallucination
and inaccuracy issues.
If
they
“drink
their
own Kool-Aid,”
would
they
be
tempted
to
not
require
the
necessary
human
checks
and
sufficiently
staff
the
law firm to
do
that? Would
that
hasten
the
demise
of
the
proverbial
lawyer
in
the
loop?
Is
the
future
law
firms that produce a
lot
of
work
but
have very
few if
any lawyers?
Does
this
vendor
acquisition
predict
the
future?
Enter
Jordan
Furlong
I
was
reminded
of
all
this
earlier
this
week
when
I
read
Jordan
Furlong’s excellent piece entitled The
Divergence
of Law
Firms
From
Lawyers. Furlong is
one
of
the
most astute observers of
the
legal
and
legal
tech
scene.
He’s
also
a damn
good futurist. Furlong
believes
that
the
relationship
between
lawyers
and
law
firms
is
going
to
be substantially
weakened by
AI.
Furlong
observes
that
with
AI, “Law
firms
will
become
capable
of
generating
output
that
can
be
sold
to
clients
with
no
lawyer
involvement
at
all.”
In
other
words,
many
of
the
services
done
by
law
firms
will
be
done
by
AI,
not
legal
professionals
and personnel. He
notes
that
much
of
that
for
which
ordinary
people
use
law
firms
—
legal
analysis,
legal
document preparation, and
the legal
service delivery
—
can
already
be
done
by
AI.
For
better
and
mostly
worse,
at
least
right
now.
Furlong
also
correctly
notes
that
an
LLM
can already perform
legal
tasks that
can
be directly sold
to
a
client.
Furlong
says
this
places the
LLM
as
the
primary
performer
of
the
legal
task
which
is
something entirely new.
By
using
LLMs,
law
firms
could
in
the
future sell
legal
services
to
clients
without
any
involvement
of
lawyers
at
all.
Furlong
goes
on
to
note
that
law
firms may be
forced
to
do
this
by
client
and
cost pressures.
Importantly,
Furlong
notes
that
having
AI
undertaking
legal
tasks
today requires a
lawyer
in
the
loop
to
ensure
accuracy
and satisfy ethical requirements.
“But
as
Generative
AI
gets
better
at
performing
legal
tasks,
that
oversight
will
become
more perfunctory, and
past
a
certain
point,
it
will
taper
off
altogether.”
Of
course,
this
will fundamentally reshape
how
legal
services
are
provided
and
through
what vehicle.
Furlong
muses
that
law
firms
may
even
become
extinct,
replaced
by
an
online
hub.
Furlong
thinks
that
what
could
happen
is
that
future
lawyers
would
still
be
valuable to
only provide
services
like advising, advocating, strategizing,
and
the
like.
They
just
won’t
need
law
firms
to
provide
them.
The Lawhive Acquisition:
An Augur for
the
Future
Furlong’s
predictions
aren’t
just
theoretical
now. Given
that
legal
tech
vendors
are
the
primary provider
of
AI
services
to
law
firms, it’s not
unreasonable
to
think
that
there
could
very
well
be
more
acquisitions
like
the Lawhive one.
The
vendors might
certainly
realize
that
instead
of selling the
AI
to
the
law
firms,
who
in
turn
use
it
to
sell
its
services
to
clients,
the
vendor
could just buy
the
law
firm, use
it
as
a vehicle to
sell
the
service, and take for
themselves
the
profits
from
the
services.
Indeed,
many
of
the
things
Furlong
suggests in his article could
come
to
pass
as
a
result
of the Lawhive and
similar acquisitions
of
law
firms. With
these
kinds
of
acquisitions,
you would have
a
vendor
with
sophisticated
tools having the
capability
of
controlling
how
and
what
work
is
done
by
AI
and
what
is
done
by
humans.
The
acquiring
company would
have the capability to
offer the
same
kinds
of legal
services now
done
by
humans through
its
AI.
It
would
have
the capability
through the
law
firm,
to
offer and
sell legal
services
done
by
AI.
Indeed,
it
offers
the
possibility
that
the services of
the
law
firm
would
be primarily done
by
AI,
just
as
Furlong
predicts.
And
as the
AI
become
more sophisticated,
the
lawyer
in
the
loop would
not
long
be
needed, reducing
the
need
for virtually any
lawyer
in
that
law
firm.
Such acquisitions offer
the
possibility
that
the
law
firm
would
become that online
hub
that
Furlong
envisions. It’s
even
foreseeable
that
the
vendors
could
offer
the
AI
supplied
services
themselves.
We
Shall
See
We
have
no
way
of
knowing
how
the Lawhive acquisition
will
unfold,
but
it
may
be
the
first
domino
to
fall
in
a
much
larger
transformation.
This
kind
of
acquisition
could
create
exactly
the
scenario
Furlong
envisions which
is
why Lawhive buying
Woodstock
feels
so
significant
and
potentially
predictive
of
the
future.
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.
