Legal Tech

Enough Chatter About Chat GPT: Time to Move on Up

So, so much chatter about Chat GPT. I believe some of it. I think that some of it is nonsense.

Here is the bottom line:

  1. Lawyers did not go out of business when computers were invented and we lost all of those hours reviewing draft after draft of retyped documents.
  2. We were still able to generate enough billable hours, even after we became able to produce documents faster with document automation software.
  3. Online legal databases did not replace articling students and junior associates.

Having better tools is not going to put the legal industry out of business. It may, however, accentuate the difference between high-end legal practice and low-end legal practice.

Low-end practices are going to sink even lower. For example, lawyers who primarily provide documents to people who do not have much of a legal budget are going to find one of two things: (i) their clients use artificial intelligence to produce the documents themselves; or (ii) their clients still come to them, but their perception of value will change. If they can use AI to produce a confidentiality agreement for free, that will be a benchmark for how much they are willing to pay to have a lawyer do it instead.

Some lawyers will react by using AI themselves to produce documents cheaply, but unless they are adding some real value, the clients will figure that out and eventually disappear.

Clients will still come to lawyers when they need CRAP: Creativity, Reason, Advice, and Practicality.  Oh, and Strategy, but that did not fit into my new acronym.

Areas of legal practice are always becoming commoditized. I am told that in the very early days people went to lawyers to have documents written because often the lawyer was the only person in the village who knew how to read and write.  Education ruined that. Lawyers had to do other stuff.

In my day it was residential real estate, small bank loans, and incorporations that became commodities. Lawyers had a choice – either gear up and make money on volume or move on. A few who were more entrepreneurial than analytical geared up. The rest moved on.

Eventually it will be document production that is no longer profitable.

Be like the Jeffersons*.  Time to move on up to a higher level of the profession. Or you can sit, wait, and eventually starve.

(*Younger folks might have to Google the reference.)

2 replies on “Enough Chatter About Chat GPT: Time to Move on Up”

An interesting and pragmatic take.

My two cents: the areas of law that you describe as having become commoditised are still profitable, just much less so than before. Residential property lawyers are not actually starving.

Also, on that note, there is also an interesting analysis to be done on how different jurisdictions have dealt with this issue.

For instance, I understand that in France, residential property lawyer rates are set by statutory regulation as a percentage of the transaction value. The result is that a French lawyer in this area will net fees that are around double or triple that their English or Canadian equivalents would for the same transactions. Regardless of the wider societal merits of this, one must congratulate the French lawyer lobby for this victory.

Where I am, residential real estate has become the domain of lawyers who compete on price and hire clerks to process all of the files. The standards of practice are generally low because the lawyers do not get paid enough to spend significant time on things. Lawyers who do it that way can make decent money, but it is questionable whether they derive much personal satisfaction out of running that type of practice. Then there are a few lawyers who do it at a higher standard but do not earn a good living doing it. The vast majority of the sophisticated real estate lawyers have abandoned residential real estate for commercial real estate where they can make real money at it. In Canada back in the day we charged as a percentage of transaction value and it was eventually deemed a conflict with competition laws. The public has now been protected by forbidding lawyers to do a competent job at a decent profit, with the expected results.

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