¡Hola! my ever-advancing legal innovators! You’re the pioneers charting the new, undiscovered world of generative AI and the law. 🔭🗺️

And for those just joining our adventure, never fear – we’ll explore the latest data, unearth the hidden truths behind AI adoption, and discover the transformative treasures it holds for the legal profession! 📊💡

This substack, LawDroid Manifesto, is here to keep you in the loop about the intersection of AI and the law. Please share this article with your friends and colleagues and remember to tell me what you think in the comments below.

Generative AI has initiated a paradigm shift across various industries, and the legal sector is no exception. Traditionally, the legal profession has operated under two fundamental paradigms: a monopoly on legal expertise held by licensed attorneys and a billing model intrinsically linked to the time lawyers spend on tasks. These paradigms have not only defined the practice of law but have also shaped the business models of legal services. However, Generative AI is challenging these long-standing assumptions by de-centering the lawyer’s exclusive hold on legal expertise and decoupling legal services from time-based billing. This transformation is not merely an incremental improvement—a “faster horse”—but a fundamental shift that unlocks business opportunities previously inconceivable.

This week I had the pleasure of participating in a roundtable hosted by Global LegalTech Hub in Madrid, Spain, where we discussed these very opportunities. I’ll share with you what we discussed and include my thoughts about what it all means.

If this sounds interesting to you, please read on…

¡Hola Madrid! 🇪🇸

First off, let me just acknowledge it was pretty awesome to attend this event in Madrid y’all. The last time I visited Madrid was with my family 7 years earlier. Then, it was July and unbearably hot. Now, in October, Madrid felt yet untouched by Autumn and was perfectly sunny and warm, but not too much. I also visited with friends I hadn’t seen in years and took a day trip to Toledo, the Imperial city and former capital of Spain. Here are some pics:

I visited the Prado Museum, snapped a picture of the statue of Queen Isabella. Ate some pimientos de padrón: peppers baked with olive oil and flakes of sea salt1. Strolled around El Retiro park. Saw the Toledo cathedral and a statute of Cervantes, welcoming me to the city and its main plaza. There’s a pic of me sitting next to my friend, Karol Valencia, Fastcase 50 honoree and European Women of Legal Tech winner, a force of nature and social connector. Last, but not least, Albert Ferré, the CEO of Global LegalTech Hub, organizer of the event, and a very generous host. As an organizer of events myself, I found that we had a lot in common.

With a touch of irony, I found myself discussing GenAI and the future of legal business opportunities in a city and country deeply rooted in history, tradition, and culture. Fittingly, the event was held in the Telefónica Building—the very place where King Alfonso XIII made the first transoceanic telephone call to U.S. President Calvin Coolidge in 1928. Maybe, then, it was the perfect setting for this conversation about technological innovation after all.

Tech Boom: Future Legal Business Opportunities

Our discussion was expertly orchestrated by the talented conductor Sara Molina, Legal Transformation & Contracts, Deloitte Legal, who is also a Fastcase 50 honoree and European Women of Legal Tech winner. 🏆

I was joined on the stage by the following all-star cast:

⭐️ Manuel Deó – CEO, Ambar Partners
⭐️ Tom Rice – Senior Legal Director, TravelPerk
⭐️ Jon Bartman – Co-Founder, The Law Tech Consultancy
⭐️ Tom Martin – CEO & Founder, LawDroid

Full video:

Key Takeaways:

• Lawyers need to overcome their fear of AI and have the courage to learn how to use it to their advantage. Jobs will change but not disappear entirely.

• AI is extremely useful for answering natural language questions from knowledge bases, benefiting both internal staff and external customers.

• AI can significantly improve administrative tasks like answering phones and routing calls, not just core legal work. It allows law firms to become “AI-first.”

• Early AI use cases focus heavily on the “analysis” phase of law practiced by firms and in-house teams. But there are huge opportunities to improve “access” and “adjudication” phases to benefit the broader legal system.

• AI can dramatically improve life for junior lawyers by streamlining grunt work like research and contract drafting. This doesn’t replace lawyers but makes work easier and less onerous.

• Real transformational change will come from fundamentally rethinking how legal services are delivered, not just making current methods faster. New business models beyond billable hours may emerge.

Notable Quotes:

• “The fear [of AI] is well-founded, but on the other hand I think what gets us through the fear, to get to the other side, is courage…the courage we need to survive. And to survive, we need to learn how to master AI and use it to our advantage.” – Tom Martin

  

• “If you look at the composition of a legal system…you have an access phase, an analysis phase, and adjudication. There’s a lot of high intelligence in analysis…but there’s not very much intelligence in access and adjudication.” – Tom Rice

• “Where we look at the tech boom, it’s possibly not even firmwide or the whole in-house team, it’s bits and pockets. But with each one of those, suddenly bigger adoption becomes easier, law firms work better and can make more money, in-house teams work better and can do more things.” – Jon Bartman

Other Important Points:

• Adoption of AI in the legal industry jumped from 19% to 79% in the past year according to the Clio Legal Trends Report. The risk is in not adopting AI and being left behind.

• Some believe clients will gain leverage over law firms as tech enables them to better understand the complexity of services and train their own models. Law firms may plug into client ecosystems.

• Waiting to adopt AI is risky as early movers gain experience, improve their offerings and lock in client relationships. The cost savings captured by implementing AI into workflows enables higher volumes of work.

• Many lawyers still don’t fully trust AI tools but expect to adopt them in the next 12 months. Those who wait too long risk being at a major disadvantage.

In summary, the panelists saw AI as inevitable and transformational for the legal industry, improving everything from administrative work to access to justice. Firms and legal departments must adopt quickly or risk losing ground to competitors. A measured approach is wise but waiting too long is dangerous as the speed of adoption accelerates.

My Thoughts:

1. This is Really Happening

A natural reaction to all this talk of future legal business opportunities would be to reject the notion that GenAI is having any transformative impact at all. Isn’t this all just hype? No, I would argue, this is really happening; the future is now. According to the Clio Trends Report, although only 19% of legal professionals had used AI in some fashion last year; this year, that figure stands at 79%. This trend is echoed by the Wolters Kluwer 2024 Future Ready Lawyer Survey, finding 76% of legal professionals in corporate legal departments and 68% in law firms are using generative AI at least once a week, with a third of those professionals using it daily. That means that the standard bell curve for technology adoption has become more acute. Those who don’t jump on as early adopters now, stand to be left behind. Waiting to see how things play out is not an option.

2. De-centering the Lawyer Monopoly on Legal Expertise

Generative AI models, such as OpenAI’s GPT-4o, have demonstrated the capability to perform complex tasks traditionally reserved for human lawyers. These tasks include drafting legal documents, conducting legal research, and analyzing contracts. For instance, Thomson Reuter’s “CoCounsel,” assists lawyers in tasks ranging from summarizing depositions to reviewing documents for accuracy and relevance. The deployment of such AI tools democratizes access to legal expertise, enabling non-lawyers and businesses to engage in activities that were once the exclusive domain of licensed practitioners.

This shift deconstructs traditional power structures within the legal profession. By making legal knowledge and skills more accessible, Generative AI diminishes the gatekeeping role historically played by lawyers. Clients can now obtain preliminary legal insights without immediate recourse to legal counsel, altering the dynamic between lawyers and their clients. This change empowers clients and opens avenues for new entrants in the legal services market, fostering competition and innovation.

3. De-linking Time from Billing

The legal profession has long relied on the billable hour as a primary revenue model. Generative AI disrupts this model by significantly enhancing efficiency and reducing the time required to perform routine tasks. Automated document drafting and research allow legal professionals to accomplish in minutes what previously took hours. This efficiency gain enables law firms to adopt alternative billing models, such as flat fees or subscription services, providing greater cost predictability and value to clients.

By decoupling services from time-based billing, Generative AI allows legal businesses to scale their operations without a proportional increase in labor costs. This scalability introduces new business opportunities, such as offering affordable legal services to a broader client base, including small businesses and individuals who were previously priced out of the market.

4. Unlocking New Business Opportunities

Generative AI paves the way for innovative legal platforms that offer on-demand services. Companies can develop AI-driven applications that provide instant legal document generation or preliminary legal advice, accessible to users at any time.

For example, MyPocketLawyer offers a straightforward way to understand complex contracts, legal documents, and terms of service. It quickly breaks down the details of legal documents in seconds and answers any question about the document. Its strength is that its use of Generative AI happens “under the hood” to empower an intuitive user experience.

The integration of legal services into other industries becomes feasible with Generative AI. Businesses can embed legal compliance checks into their existing workflows using AI, reducing the need for separate legal consultations. This integration creates opportunities for legal tech startups to collaborate with companies across various sectors, expanding the reach of legal services.

Generative AI also facilitates the globalization of legal services. Language translation capabilities and the ability to process legal information from different jurisdictions enable providers to offer cross-border services without significant additional costs. This global reach was previously inconceivable due to the complexity and resource requirements of international legal practice.

Closing Thoughts

The future of law is here, and it’s driven by generative AI. This technology is transforming the legal industry at breakneck speed, with adoption among lawyers skyrocketing from 19% to 79% in just one year. Those still debating whether to embrace AI risk being left in the dust.

Yes, change is uncomfortable, but the courage needed to survive should propel us through that fear. Survival means harnessing AI to automate rote tasks, boost efficiency, slash costs, and fundamentally reimagine how we deliver legal services. It means having the audacity to jettison outdated models and pioneer better ways of working.

Our clients are clamoring for change, and firms content to remain a step behind risk losing leverage to tech-forward clients. But this isn’t about chasing trends – it’s about thoughtfully and proactively steering this revolution. We must shape new industry standards around AI testing, deployment, and oversight while still moving at the speed of innovation.

The future is now, and the opportunities are immense for those with the vision and guts to seize them. Let’s roll up our sleeves, uphold our ethics, and build this brave new world together. If we get this right, the dividends for our clients, our organizations, and the cause of justice will be nothing short of transformational.

By the way, if you’d like to learn more about how how AI works and how it will impact the legal profession, you should apply to LawDroid University!

My NEW 5-part webinar series, Generative AI for Lawyers: Empowering Solos and Small Law Firms, is now available at LawDroid University.

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