Event Brief: The Future of Legal Practice - Lawyers as Entrepreneurs
On 30 November 2022, the trajectory of the world was irredeemably altered when ChatGPT was released to the public. Since then, innumerable other LLMs came to the forefront of our lives, quickly taking over and reshaping countless professional aspects. People were left scrambling to pick up the pieces of the barriers broken by artificial intelligence, with the lack of proper regulation for these tools remaining a pulsing wound within our legal systems. One of the demographics hit the hardest by this endless development are students and young graduates, left to compete with platforms capable of outperforming them in most aspects.
At The Legal Tech Society, we seek to alleviate the worries that are plaguing people’s minds concerning AI and prove that human skills remain as relevant as they have ever been. Our latest event, The Future of Legal Practice - Lawyers as Entrepreneurs, brought together professionals from different industries to discuss how lawyers are not only the most prepared to adapt to change, but to actively shape it.
The Speakers
Raj Panasar is the founder and CEO of LawFairy, a technology-only law firm, which offers regulated legal services entirely through technology, with no human element involved in the decision-making process.
Sebastian Jenks is the Head of Commercial at LawFairy, where he is responsible for developing the model to reach a go-to-market state.
Camila Colmenares is an economist, finance professional, and Co-Founder of Cressência, an AI-driven platform that automates early-stage business design for entrepreneurs and underserved founders.
Camila Colmenares is an economist, finance professional, and Co-Founder of Cressência, an AI-driven platform that automates early-stage business design for entrepreneurs and underserved founders.
Bolted-on or Native?
Sebastian Jenks opened the discussion with a short presentation on the rise of AI-operated law firms (from 23 firms to over 60 in just six months!) and the steps taken by traditional firms to bridge the temporal and financial gap that has started to appear between the two.
In his own words, the traditional law firms have bolted AI tools on their operations, but at their core, they have not shifted away from the values and work ethic they developed in the pre-LLMs era. That could potentially slow down their business revenue in the near future, but are projected to remain steady in providing services.
On the other hand, numerous AI-led firms have started to pop up on the market in the last year. The first question is: what is an AI-led firm? The answer is simple: artificial intelligence does most of the heavy-lifting within the firm, with human interaction optional. Consequently, the AI is integrated in the operational process - without artificial intelligence, the firm would not exist. Secondly, why are AI-native firms on the rise? There are several explanations: from fixed fees to automated intake and immediate prices, the merits of these types of models are easy to comprehend.
While this sort of business may appear attractive at first, its advantages lead ultimately to its downfall: its clients are humans, and humans do not trust machines easily. That is the reason why traditional firms will not disappear completely. Some will struggle, of course, but perhaps those unable to properly keep up were never fit for purpose in the first place.
In his closing speech, Seb offered advice to young professionals starting out their careers:
Understand the Work
Learn the Economics
Work with Engineers
Keep the Client Relationship
Conservatism and why AI cannot fully replace humans
Raj took over the discussion and presented the weak spot of artificial intelligence which should be exploited by young professionals.
Imagine this: a teenager, called A, murders a person in cold blood. A is convicted under the Soviet system and has to serve time in a labour camp. A few decades later, A becomes a shareholder of our firm. For a current deal to go successfully through, our firm has to disclose any existing criminal record of our shareholders. A lawyer would halt at this conundrum: if the deal hinges on none of our shareholders having a criminal past, how could this risk disclosure be written in a way that allows the deal to be finalised?
AI would be unfazed by this difficulty - and therein lies the problem. Raj asked artificial intelligence to summarise his example and to solve the issue. The result? The view given by AI is extremely conservative: not only does it fail to provide all the background details, it tries to cover up the severity of the crime A had committed.
That is why AI is not yet fully prepared to deal with the risk of a business, which remains one of the most significant aspects of sharp-end transactions.
“Entrepreneuring” and the Future of the Legal Profession
Camila Colmenares and Sebastian Volcan answered four questions during their presentation.
Do lawyers have skills beyond the legal field?
Sebastian confessed that his main limiting belief was thinking that his skills are limited to his legal capabilities, while in truth, they enable him to reach so much higher than a traditional legal career.
How can a lawyer start a non-legal venture?
The answer to this question is a complex one, but the starting point is to surround yourself with professionals from different industries. Camila underlined the importance of stepping outside of our industrial bubble: by immersing yourself in views similar to yours, you will never be able to find a proper answer to the vast issues that continue to appear as AI tools are being developed.
Furthermore, as Sebastian pointed out, if lawyers want to catch up to technology, they have to go beyond their legal knowledge - and they can easily do that, if they open up their eyes to the endless business ventures that are available for them.
How is technology reshaping professional careers?
With equal access to knowledge, juniors must not fall into the temptation of using AI to create their criterias, instead of using it as a means of fulfilling these criterias. What does that mean?
Camila offers an easy example: writing an email. If a young lawyer asks ChatGPT to write their client an email, he will never fully connect with the respective client, nor will he ever develop the skills required to advance his career. AI should be used as a helping hand in coming up with a solution, not as a medium through which a professional makes his life easier.
How can we create opportunities beyond the traditional career progression?
Most of the current issues that are plaguing the world presently are related to technology. An individual industry is not capable of dealing with the problems posed by technology by themselves. Seb and Camila’s solution? Entrepreneuring.
People from different fields have to start working cohesively in a team for these concerns to be tackled properly. While economists might be capable of making a mean spreadsheet, they are not necessarily well-versed in how regulations and policies affect a certain matter, and that is where a lawyer might step in. By combining various knowledge and perspectives, people could be able to bridge the gap that technology has been perpetuating.
Q&A
Q1: In the spirit of entrepreneurship and the changes it might usher into the industry, I wonder how would you envisage [...] the structure [of the legal industry] might change in the lines of a [...] more trainee-led [...] approach to working [...]?
Raj: I think it will be different for different types of law. I think it will be a real privatisation of staff. [...] I think so much of the work will come in through technology, I think technology will be starting it and I think that at some point a decision has to be made as to whether the human is needed, or not. That to me is the classic scenario for such a massive percentage of the work done. [...] in terms of utility, for people who need it, I think the vast majority of the law will probably end up being practiced that way. But there’s other types of law too. You’ve got anti-trust, you’ve got litigation. Litigation is a really good example, anti-trust is a good example, where you’ve got that mesh of litigation and the corporate side of it, M&A. I’d be surprised if that came in through an app. I’d be surprised if anti-trust came in through an app. That’s the classic area where [...] you’re living on the edge, these companies are doing these big mergers, they are kind of really living on the edge and I’m not even sure how I would start building a model to really do that work from the get-go.
Q2: Considering a lot of the changes that we are facing right now, [...] what are the skills that you would envision as the ‘must-have skills’?
Sebastian V: [...] the human skills will be the most valuable skills for any professional. At the end of the day, you do business with people you can trust and you can’t trust people that do not have a good working ability, that does not have a good communication ability, an emotional maturity. Now, more than ever, the only thing AI cannot replace is being human. And these human skills are the only ones AI cannot replace, by now.
Sebastian J: To add on to that. Meet as many people as you can, face to face, [...] learn how to sell yourself, because you are always selling something, be that yourself, a product or a service. I think for partners in law firms, their biggest concern is that their trainees are hiding behind AI and they do not want to speak to people in person, they want to have their camera off in Teams calls, they do not want to speak on the phone. And when they are put in a room with the clients, these barriers often come down and they panic and they crumble. I think people just need these interpersonal skills, meet as many people as you can in person, because you cannot hide behind tech walls.
Camila: The capacity for foresight is something that the AI cannot do. And foresight is not the same as scenarios [...]. Foresight means accumulating as many possible scenarios for specific issues and then that leads into goal-setting.
Q3: [...] Do you think it’s possible for policy to ever catch up to AI, and if it does catch up, what shape do you think it would take in the legal sector and in your own personal work that involves AI so heavily?
Raj: AI is developing so fast, there is no chance [...] that the policy could [...] pre-empt what’s going to happen. Europe can try as hard as it likes to be the regulator of AI in the world, but it’s not going to be fast enough, it’s not going to be good enough. It’s going to end up being reactive and the truth is that the risks of AI, what we are discussing here, end up going really around the edge of the potential impact of AI on humanity. So all this conversation is in the really optimistic scenario that we will still be alive to have these issues in twenty years time. And so, these things have to be taken seriously, but my view is that leaders of the world aren’t, and that is simply not enough.
