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The CEO changing legal IT
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The CEO changing the legal model
As we establish our own relationships with AI, it’s just as important to think logistically about on-the-ground implementation as it is to strategize the big picture. We’ve spent some time on the latter throughout our recent newsletters, so this week, we’re going to zero in on the former.
To the AI naysayers out there, I’ll point you to a new S&P Global Report, which calculates that revenues of generative AI technology offerings will reach $3.7 billion in 2023 and expand to $36 billion by 2028 – that’s with a compound annual growth rate of 58% in just five years.
It might not be the same exponential figures that smartphones reached five years after hitting the market, but it’s certainly not nothing, and I don’t plan on missing the potential.
To contextualize a tangible application that’s already disrupting a large industry, I sat down with Logikcull’s Andy Wilson on a bonus episode of the Business of Tech to see how his AI is shaking up the legal field. Here’s what he’s seeing now and where he thinks this form of AI is headed.
The Logikcull Pitch
If you’re interested in the overlap of AI and legal, Wilson’s initial pitch will catch your eye: Imagine replacing that searching through 10,000 emails with AI or redacting all of the treasure trove of data in an SA document.
Anyone who’s touched the legal field will tell you that the business involves a lot of reading, writing, thinking, and analysis, and the volume of this busy work is increasing exponentially. While a legal case 10 years ago might be complicated by the involvement of emails and texts, in 2023, there’s even more to contend with: Slacks, Team messages, audio files, video files, and drone images, to name a few.
And anyone who knows the basics of AI can also tell you that the above description is ripe for AI adoption and automation.
Enter Logikcull, a culling service that uses AI and automation to rip through data of any type and size to analyze it, uncover smoking guns, and organize everything into a digestible format. Wilson describes his creation as taking a hot knife through butter – in other words, it gets the job fast and easy.
Ensuring Accuracy
Perhaps more than any other field, getting legal analysis wrong has major implications. You risk losing a case or conjuring up an even bigger storm of litigation. So how do Wilson and his team build trust with users?
Beyond the usual model training, built into Logikcull is a suggestion percentage score. When his AI hands over a determination, it also hands over a score of confidence in that determination. Depending on the client’s experience and expertise, they can then decide to review certain components or explore something further.
That means that the reviewer, usually a lawyer or paralegal, has access to both the AI summary and everything that went into it. After receiving a determination, they can also use what Wilson calls the Logic by AI tool to type in further questions. An example prompt he provided was, “Hey, summarize this document. Show me all the patient information. What is this about? What is this key term?”
And in case you were wondering like I was, Wilson and his team very much see all of the outputs and resulting information as the client’s intellectual property. Even though it’s his tool creating summaries and results, the involved data still belongs to the client (in theory – we’ll see how the many impending lawsuits and regulations in the field play out).
Positioning Logikcull’s Long-Term Implications
Today, Wilson sees Logikcull as an assistant. Eventually, it’ll (obviously) become much more than that. In his own words:
“Long term, it will be fully automated. The entire process of looking at documents and emails and determining relevance and privilege, et cetera, will be done by machines, and it will be done at a much faster rate and a much higher accuracy and a way lower cost.”
And as Logikcull evolves, it’ll become even easier for people in the profession to, as Wilson put it, “set it and forget it.”
If you’re in the same school of thought regarding AI as I am, you’ll be hesitant to embrace that phrasing. In pop culture terms, I’m less scared of the Terminator and more scared of Elysium, where the legal process is so automated by machines that there’s no longer any human interaction.
I ran this concern by Wilson, and he broke this type of work down into three segments: the initial phase, where a human plugs things in and sets parameters, the end, where a human confirms that the AI creation has the right contents, and the middle, where a bulk of the busy work takes places. He clarified that for the foreseeable future, he imagines AI taking over the middle phase and humans retaining their involvement in the beginning and the end.
Restructuring the Legal Field
Some of Wilson’s clients in the legal field are understandably a bit nervous about pivoting from work that used to cost a fortune to a black box of knowledge. Morality aside, there’s a huge financial shift happening here.
If you aren’t already familiar with the steep cost of legal busywork, lawyers often charge around $500 an hour to look at documents, and the bulk of that work falls under the “middle” category. By creating a tool that essentially replaces this labor, Wilson is disrupting an extremely lucrative component of this field.
I asked how he thinks this will unfold on the ground, and his answer was twofold. On one hand, this is a lifesaver for people in the profession who’ve had to meet the same traditional deadlines with exponentially more data to sift through thanks to the digital shift. On the other hand, he sees a world where small law firms take work away from large ones.
In his words…
“There’s a lot of work in the middle, a lot of work, like thousands of hours. If you’re an associate at a big firm, you’re expected to bill 2000 hours, roughly a year, 2000 hours at whatever billable rate you’re going to do. The vast majority of that 90% is the middle. And that’s going to get hollowed out.”
As a result, these bigger players will increase their rates for the fewer hours they’re needed. Then, again in his own words…
“That’s going to create another side effect where the small law firms who are now adopting AI and changing their business models away from per-hour billing are going to align with these clients that historically would’ve gone to these big firms to get their work done.”
Despite the fact that most law firms have 20 or fewer people, the majority of the revenue is going to a small number of massive firms. If this all comes to fruition, Wilson believes we’ll see a shift of wealth being poured into smaller firms – smaller firms that embrace AI, that is.
Though it’s not a big shift yet, Wilson predicts that some of these smaller firms will switch to a subscription model to make the most of the disruption.
The changes triggered by AI can feel a bit too theoretical for my taste at times, so we’ll continue looking for business cases playing out in real-time. The better we understand specific industries and contexts where AI will be useful, the better services we can offer our own clients.
To learn more about Wilson and his tool, head to www.Logikcull.com. To share your take on the current stakes of AI, send along any lingering thoughts to [email protected].
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