Latest / AI Tools for Practicing Lawyers / Episode 014: Billable Hours and the AI Native Law Firm

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Episode 014: Billable Hours and the AI Native Law Firm · AI Tools for Practicing Lawyers

• 0:03
  SPEAKER_02: Welcome to AI Tools for Practicing Lawyers.
• 0:07
  SPEAKER_02: Practical, no-nonsense guidance to help attorneys put AI power to work in their practice right now.
• 0:15
  SPEAKER_03: Clients are increasingly using AI tools before they ever call a lawyer.
• 0:21
  SPEAKER_03: And that's creating real tension in the legal industry.
• 0:25
  SPEAKER_03: On LinkedIn and on social media, talk of AI replacing lawyers is everywhere.
• 0:30
  SPEAKER_03: Some lawyers see opportunity.
• 0:33
  SPEAKER_03: Others see commoditization.
• 0:35
  SPEAKER_03: Most are still trying to figure out where all of this is heading.
• 0:39
  SPEAKER_03: Today we're talking with Rich Rogers, who I think is an AI visionary.
• 0:45
  SPEAKER_03: Heather thinks he's an AI expert.
• 0:48
  SPEAKER_03: I'm going to let you decide one way or the other.
• 0:51
  SPEAKER_03: He is the creator of Start Legal, an AI native platform aimed at helping startup founders get moving on their dream projects without the friction of waiting for legal advice at the very first step.
• 1:06
  SPEAKER_03: In a world where costs, complexity, and process of forming a startup are becoming increasingly streamlined to automation and AI tools, how should lawyers respond?
• 1:19
  SPEAKER_03: Should they fear platforms like Start Legal, compete with them, or learn how to work alongside them?
• 1:27
  SPEAKER_03: I'm Ron Drescher.
• 1:28
  SPEAKER_03: I'm Heather Gardner.
• 1:30
  SPEAKER_03: And I'm very excited to welcome Rich Rogers, the start of Start Legal.
• 1:36
  SPEAKER_03: Rich, how did you decide you wanted to create Start Legal?
• 1:40
  SPEAKER_00: Good question.
• 1:42
  SPEAKER_00: At the time in 2022, I started to put together a law firm for startups called Startup Tech Law.
• 1:48
  SPEAKER_00: So I have both.
• 1:49
  SPEAKER_00: I have the platform at Start Legal, and I have the law firm for startups at Startup Tech Law.
• 1:54
  SPEAKER_00: And at the time, AI was really just starting out.
• 1:57
  SPEAKER_00: OpenAI released ChatGPT, and I saw that there's an opportunity here now for us to help our clients save money.
• 2:06
  SPEAKER_00: And I know that founders don't have two things.
• 2:07
  SPEAKER_00: They don't have time, they don't have money.
• 2:09
  SPEAKER_00: I've been a at the time I was a four-time founder.
• 2:12
  SPEAKER_00: I also fortunately was able back in 2013 to work with another company helping out on the product side, on the GC side, which was a very, very early AI tool to help and get companies to start utilizing AI in a very, very rude manner in a way.
• 2:29
  SPEAKER_00: And one of the projects was a patent application tool.
• 2:33
  SPEAKER_00: So you could build a patent application using prior art.
• 2:37
  SPEAKER_00: It would have the entire Google uh download of all the patent applications and patents that were out there, everything that we could find.
• 2:45
  SPEAKER_00: We put into this database and was able to find prior art.
• 2:48
  SPEAKER_00: And, you know, this is really early, early on.
• 2:51
  SPEAKER_00: And I, you know, I've always been fascinated by it.
• 2:53
  SPEAKER_00: And when this happened in 23, I said, this is the this is going to change the future.
• 2:58
  SPEAKER_00: So think about how AI works, right?
• 2:59
  SPEAKER_00: And the early stage, it takes an input, takes a question, and knows what answer to generate from that.
• 3:05
  SPEAKER_00: So when AI hit, I was like, I have all of this experience and knowledge of how to build these things.
• 3:10
  SPEAKER_00: I think we're going to change the future here with AI and and and legal services.
• 3:15
  SPEAKER_00: I better get on this fast.
• 3:17
  SPEAKER_00: And I consumed it.
• 3:19
  SPEAKER_03: All right.
• 3:20
  SPEAKER_03: Now you're still practicing law?
• 3:22
  SPEAKER_03: I am.
• 3:23
  SPEAKER_03: All right.
• 3:24
  SPEAKER_03: You you have an active practice?
• 3:26
  SPEAKER_00: Startup tech law, yeah.
• 3:28
  SPEAKER_03: Okay.
• 3:29
  SPEAKER_03: So so here's the question.
• 3:31
  SPEAKER_03: Now, could you describe what Start Legal is and and and how it came about?
• 3:36
  SPEAKER_00: Yeah.
• 3:37
  SPEAKER_00: So Start Legal was actually just when I first built it, it was a labor of love for my clients.
• 3:43
  SPEAKER_00: I saw that over time, um, you know, we work with hundreds of startup clients.
• 3:47
  SPEAKER_00: They have the same problems.
• 3:48
  SPEAKER_00: One, they're using other tools for cap table management that can cost them$5,000 a year.
• 3:55
  SPEAKER_00: But on top of that, it would cost them$200,$300 an hour for an expert to manage the cap table.
• 4:01
  SPEAKER_00: What's a cap table?
• 4:02
  SPEAKER_00: Uh it's like a stock ledger, basically.
• 4:04
  SPEAKER_00: It's who has the shares in the company and if there's any repurchase, all of that's in a ledger, basically.
• 4:11
  SPEAKER_03: So when did you decide to move Start Legal away from a proprietary tool within your practice to something that you would actually market in the real world?
• 4:21
  SPEAKER_00: We had built about 20 plus AI GPTs for our clients at the time.
• 4:26
  SPEAKER_00: And one of which, let's just say it's an NDA.
• 4:29
  SPEAKER_00: Our clients could come into Startup Tech Law, go into the portal that we built, and then use one of our GPTs that had it's a private GPT for them, a private AI tool.
• 4:38
  SPEAKER_00: They could generate their own NDAs without us, but it was from our own templates with our guidelines.
• 4:44
  SPEAKER_00: Most of my clients were using this and telling me that they love it.
• 4:48
  SPEAKER_00: We took the AI lawyer tool off of the GPT store at the same time and we combined all of ours into one platform, which is the version that you saw.
• 4:57
  SPEAKER_00: So that it would do one of three things.
• 4:59
  SPEAKER_00: One, it would have a basically a digital clone of me, and you could ask hundreds of questions to a startup lawyer and it would give you, you know, a question and answer knowledge base.
• 5:08
  SPEAKER_00: Two, it would do a document review.
• 5:10
  SPEAKER_00: So it was trained on legal document reviews with red lines and comments and suggested clauses from playbooks.
• 5:17
  SPEAKER_00: And three, it would generate templates for you.
• 5:19
  SPEAKER_00: So rather than go out into the internet or ask GPT directly, draft me an NDA, you would use our own templates.
• 5:26
  SPEAKER_00: If you're a client of ours, we know we know you.
• 5:29
  SPEAKER_00: We would want to make sure that you're using better templates and better contracts than what you're finding out there in the internet and what's generated from GPT now.
• 5:39
  SPEAKER_03: So what I'm hearing is that you made the decision to add massive unpaid value for your clients as part of a value proposition for them engaging with your firm.
• 5:53
  SPEAKER_00: Absolutely.
• 5:54
  SPEAKER_00: And we do things differently at Startup Tech Law, where we were, we've decided, well, I decided very early on to try to scrap the billable hour.
• 6:02
  SPEAKER_00: And I believe that it's the value that you provide in the deliverable, not the time it takes you.
• 6:07
  SPEAKER_00: And that for me, I think goes hand in hand with what we're seeing now with AI.
• 6:12
  SPEAKER_00: If it, if it takes you five minutes to draft something in AI, but it's just as good as someone doing it from scratch in five hours, I think we actually have a duty to our clients not to charge them for the five hours if we don't have to.
• 6:23
  SPEAKER_00: But what is the value that we're delivering to them?
• 6:26
  SPEAKER_00: Hear this again from different experts in AI and law.
• 6:29
  SPEAKER_00: There has to be, I think, a fair value for what we're delivering.
• 6:34
  SPEAKER_00: If it's a SaaS agreement, for example, or if it's a simple NDA, well, there's different pricing tiers for that.
• 6:39
  SPEAKER_00: And what the market is going to pay for it.
• 6:42
  SPEAKER_00: And I think for what we're building, we want to make sure that it's a high quality product, but AI only gets you so far.
• 6:49
  SPEAKER_00: And I've, you know, after three years of doing this, I can tell you that there still has to be an attorney in the loop on all of this.
• 6:57
  SPEAKER_00: And where I think the value for attorneys coming is if they embrace AI, they can switch and move off of the billable hour, which I think we all hate.
• 7:06
  SPEAKER_00: I know our clients hated it.
• 7:07
  SPEAKER_00: I hated it when I was a founder.
• 7:08
  SPEAKER_00: I hate it when I'm a lawyer, to be honest with you.
• 7:10
  SPEAKER_03: I completely agree with what you're saying.
• 7:13
  SPEAKER_03: If you're spending less time on a project, you should bill less.
• 7:18
  SPEAKER_03: And that just is common sense and that goes without saying.
• 7:22
  SPEAKER_03: The billable hour is a risk allocation technique.
• 7:26
  SPEAKER_03: By by employing a billable hour, the lawyer is foisting all of the risk onto the client for unexpected developments during the engagement.
• 7:38
  SPEAKER_03: And of course, there's nobody more adverse to risk than lawyers.
• 7:42
  SPEAKER_03: So it made sense for lawyers to adopt the billable hour model for their revenues, but AI changes that all around.
• 7:50
  SPEAKER_03: And when you're talking about a value-added model, that's going to shift the risk much more to the lawyer to provide that value in an efficient way.
• 8:00
  SPEAKER_03: Does that make sense to you?
• 8:02
  SPEAKER_00: 100%.
• 8:03
  SPEAKER_00: And I think that clients don't know what they don't know when it comes to legal work.
• 8:08
  SPEAKER_00: And if you look at all the AI and all these AI tools out there, well, most of them are made for lawyers to try to reduce the amount of time it takes to do a document review or contract comparison drafting, whatever.
• 8:20
  SPEAKER_00: There are very few tools that actually go directly to the customer.
• 8:24
  SPEAKER_00: Now, as of today, Anthropic came out with their clawed legal tools, and they do that through document reviews, especially.
• 8:32
  SPEAKER_00: But I think that the clients still think that if I just, if I just order a SAS agreement or just use an AI tool to draft this employment agreement, that's all I need.
• 8:41
  SPEAKER_00: What we've found, and I can tell you over three years, that's how we see a lot of clients come to us.
• 8:47
  SPEAKER_00: They'll get company formation documents and bylaws and board consents.
• 8:51
  SPEAKER_00: And you see the blue headline text and you see the little line underneath of it and the M-dashes.
• 8:55
  SPEAKER_00: And I look at that and I say, this is complete trash.
• 8:58
  SPEAKER_00: We can't use this.
• 8:59
  SPEAKER_00: Now I can't say that to a client, but in very subtle terms, I tell them, this is not a contract.
• 9:05
  SPEAKER_00: You have clauses that are drafted by AI that make no sense or they're just garbage.
• 9:12
  SPEAKER_00: It got to a point where so many clients are coming to me with these GPT drafted contracts that I even put on my website we do document reviews.
• 9:22
  SPEAKER_00: But if it's a GPT or AI generated review, it's$10,000 because I just refuse to do it.
• 9:28
  SPEAKER_00: And if anyone wants it, great, it's$10,000.
• 9:31
  SPEAKER_00: We'll do it, but you're going to pay for it.
• 9:33
  SPEAKER_00: No one's ever ordered one.
• 9:35
  SPEAKER_03: That kind of approach has gotten a lot of traction online amongst lawyers who want to express their distaste for having to deal with AI-generated client outputs.
• 9:49
  SPEAKER_03: And by the way, I've been using M-dashes since high school.
• 9:53
  SPEAKER_03: Right.
• 9:53
  SPEAKER_03: So please don't judge the M-dash.
• 9:55
  SPEAKER_01: I I feel like I can't use them anymore because ever I used to, I've always used M-dashes as well.
• 10:00
  SPEAKER_01: And now I feel like if I do, people will believe that I'm using AI to do that.
• 10:04
  SPEAKER_03: I know.
• 10:05
  SPEAKER_03: It's it it's not right.
• 10:06
  SPEAKER_03: But but all right, let's go back and talk about Start Legal.
• 10:10
  SPEAKER_03: Um because I played around with the demo and I thought it was very cool.
• 10:14
  SPEAKER_03: And I could see why a founder would really be drawn to it.
• 10:19
  SPEAKER_03: But I also see why a founder might think, you know what, I could delay engaging counsel for this dream of mine because I've got this amazing Start Legal tool.
• 10:34
  SPEAKER_03: What would you say to a founder who's thinking that?
• 10:37
  SPEAKER_03: And when you were creating Start Legal, did you try to address that perception?
• 10:43
  SPEAKER_00: Well, it will only get you so far.
• 10:46
  SPEAKER_00: It is going to give you a head start and it will educate you.
• 10:49
  SPEAKER_00: So the the three components are still the core thing.
• 10:52
  SPEAKER_00: One, document reviews.
• 10:53
  SPEAKER_00: They can go to Claude today and they can do document reviews, and they will.
• 10:57
  SPEAKER_00: And they're using GPT for document reviews.
• 10:59
  SPEAKER_00: The quality of the document review, it's hit or miss, to be honest with you.
• 11:03
  SPEAKER_00: Claude's gotten a lot better, but it's still honestly, the document review in Claude is not as good as the one that we have.
• 11:09
  SPEAKER_00: We've done a lot of comparison tests in the last couple of weeks on our version two AI lawyer compared to what Claude's doing.
• 11:16
  SPEAKER_00: Claude doesn't have all of that as of today.
• 11:18
  SPEAKER_00: It probably will.
• 11:20
  SPEAKER_00: But if you want to document draft, you can go to a lot of websites today and just buy templates.
• 11:26
  SPEAKER_00: $50,$100 templates, you still don't understand that if you're a non-lawyer, you're looking at this as this is the finished product.
• 11:34
  SPEAKER_00: It's not.
• 11:34
  SPEAKER_00: There's a lot of things you're going to need a lawyer to help explain and to update for you.
• 11:41
  SPEAKER_00: Or they're just going to go to GPT or Claude today and draft a contract.
• 11:45
  SPEAKER_00: Again, hit or miss.
• 11:46
  SPEAKER_00: It's probably not going to be good.
• 11:47
  SPEAKER_00: So for our platform, we're building in what we call mods.
• 11:52
  SPEAKER_00: Legal mods are something over the last year we started building out.
• 11:55
  SPEAKER_00: We're planning to have over 100 legal mods in the platform in version two that comes out.
• 12:01
  SPEAKER_00: The mods are, think of it like Claude skills.
• 12:04
  SPEAKER_00: It's the best analogy.
• 12:05
  SPEAKER_00: Different startup needs along the way.
• 12:08
  SPEAKER_00: If you, let's say 83Bs, that's an easy example.
• 12:12
  SPEAKER_00: Well, I get a lot of founders that say, well, I got a stock agreement from this, you know, Stripe Atlas or whatever.
• 12:16
  SPEAKER_00: How do I do an 83B?
• 12:18
  SPEAKER_00: If you were a client of ours, you could use our mod for the 83B, which would draft a 15620 form for you from the IRS.
• 12:29
  SPEAKER_00: It would prepare actually two versions of it, and it would even give you the envelope in Microsoft Word with the IRS office that you need to mail it to.
• 12:38
  SPEAKER_00: Everything is just one click of a button away.
• 12:41
  SPEAKER_00: And that's a special skill or mod that we've built into AI Lawyer 2.0.
• 12:46
  SPEAKER_00: So now that you have it, you really don't need the lawyer anymore.
• 12:50
  SPEAKER_00: But what we've also baked into it is two things.
• 12:53
  SPEAKER_00: One is the AI assist.
• 12:55
  SPEAKER_00: So when you've generated a contract, if you've done a document review, you can click a button and have an attorney spend 30 minutes with you on a Zoom call to review what you've just generated, starting at$150.
• 13:07
  SPEAKER_00: Now you can choose what level of attorney you want, but this is going to start bringing more attorneys in to all these other, you know, startup attorneys, you know, I can tell you, there's a lot of attorneys that we see that are real estate attorneys, someone's cousin who did divorce law, and now they're helping a company get set up and formed.
• 13:25
  SPEAKER_00: A lot of times, honestly, they all have to be re-redone.
• 13:29
  SPEAKER_00: They're not, they're not up to best practice.
• 13:32
  SPEAKER_03: You mean even the attorney work product because they're outside their lane.
• 13:36
  SPEAKER_00: Yeah.
• 13:37
  SPEAKER_00: Yeah.
• 13:37
  SPEAKER_00: We'll see a, you know, a company that set up as a Delaware LLC with stock agreements.
• 13:42
  SPEAKER_00: And you're looking at that, or they do 200 shares for the founders and they're trying to become an AI, you know, or SaaS company, and it it it has to be redone.
• 13:50
  SPEAKER_00: You know, there's a lot of things that are best practice for just startup lawyers now.
• 13:55
  SPEAKER_00: And I think that what we can do is give the founders a really good head start and a great education on what they are going to need and the tools to do it, but we still want to have that lawyer that comes in.
• 14:07
  SPEAKER_00: And we have what's called the the attorney assist.
• 14:10
  SPEAKER_00: It'll be a button that you can click on it.
• 14:12
  SPEAKER_00: Anytime that you draft anything, anytime you do a review, you can click on attorney assist and book within the same day an attorney to spend a 30-minute time with you.
• 14:21
  SPEAKER_00: The good thing about that is everyone thinks that first year and second year lawyers are not going to have jobs.
• 14:26
  SPEAKER_00: I can tell you, I'm forecasting out.
• 14:29
  SPEAKER_00: I believe there's going to be more demand for second, third year lawyers that are going to be on our platform because of the demand that we're going to get, that more of these lawyers are going to hopefully, if they can't get jobs at big firms or anywhere else, they'll find a home with us because we're going to need them.
• 14:45
  SPEAKER_03: You know, you're talking about the mods, which was really exciting to me to hear.
• 14:51
  SPEAKER_03: Would you build in an email function so that whenever a client downloads a mod, the email goes to the lawyer, letting them know which client downloaded which mod and when?
• 15:04
  SPEAKER_03: Because I see that as a fantastic upsell opportunity.
• 15:08
  SPEAKER_00: The mods are cloud-based.
• 15:10
  SPEAKER_00: So they can't download the mod.
• 15:12
  SPEAKER_00: They can only access and use it.
• 15:13
  SPEAKER_03: Right.
• 15:13
  SPEAKER_03: They access the mod.
• 15:15
  SPEAKER_03: Right.
• 15:15
  SPEAKER_03: But when they access the mod, they'll use it to create, you know, whatever document or whatever output they need from the AI.
• 15:24
  SPEAKER_03: But what I'm suggesting is the creator of the mod put in a trigger that sends an email to the lawyer at the time that that client downloads the output from the mod to let the lawyer know that this is happening so the lawyer can intervene and perhaps add value as part of the engagement or as a potential upsell.
• 15:49
  SPEAKER_00: That would be something we'd want to probably explore.
• 15:52
  SPEAKER_00: The way that we do it now, and the way it's planned to do it, is to keep that confidential between the client and the AI.
• 15:59
  SPEAKER_00: And no one else would have access to any of the work product that's generated from the AI.
• 16:04
  SPEAKER_00: So we wouldn't see your history.
• 16:06
  SPEAKER_00: We wouldn't see the document that you've drafted until you've notified us that you want us to.
• 16:11
  SPEAKER_00: And then you get a payment form.
• 16:12
  SPEAKER_00: You pay the 150 or 300, whatever it would be.
• 16:15
  SPEAKER_00: And then we have an attorney that comes in.
• 16:17
  SPEAKER_00: And with that, we run that through startup tech law, but we could also run that through other lawyers.
• 16:22
  SPEAKER_00: So we have, let's say, an immigration attorney that's a startup immigration expert.
• 16:27
  SPEAKER_00: They could come in and someone had a question about, I'm leaving Google.
• 16:31
  SPEAKER_00: You know, I get that a lot.
• 16:32
  SPEAKER_00: I'm leaving Google and I want to figure out, you know, my visa status and what can I do?
• 16:37
  SPEAKER_00: Well, you could book a time right there through that as well.
• 16:39
  SPEAKER_00: You've you've asked the AI and it's given you legal information, but then you want to hear from an actual lawyer.
• 16:45
  SPEAKER_00: That's where we could connect you to the AI immigration expert.
• 16:48
  SPEAKER_00: Or if there's a bankruptcy issue.
• 16:50
  SPEAKER_00: There's all of these opp opportunities coming.
• 16:52
  SPEAKER_00: And I think that no matter what level of attorney you are, there's going to be something that if you embrace AI, there'll be a home for you somewhere.
• 17:01
  SPEAKER_01: I feel like it's it's almost like watching you guys talk about this.
• 17:06
  SPEAKER_01: I I've never, in all the years I've talked with Rich and known him, ever felt that he's ever tried to upsell anything.
• 17:14
  SPEAKER_01: I think that it's the opposite, if you will.
• 17:16
  SPEAKER_01: He's just trying to find more ways to multiply and offer people resources.
• 17:21
  SPEAKER_01: And I think that it is really AI has changed the attorney-client relationship already so much in the few years we've had it.
• 17:30
  SPEAKER_01: And I think he saw that years before, like in the years that he was doing other, you know, other AI-based work.
• 17:38
  SPEAKER_01: And I think that he got out ahead of it, if you will.
• 17:42
  SPEAKER_00: Yeah, fortunately it came along at the right time for me.
• 17:45
  SPEAKER_00: And I think that we were, I can't really advertise that we were the first AI native law firm.
• 17:51
  SPEAKER_00: But back then, Heather, you knew you knew us and you knew where AI was.
• 17:54
  SPEAKER_00: We talked all the time.
• 17:55
  SPEAKER_00: And I think that what we wanted to do is create an opportunity for our clients to save time and save money because we could utilize AI tools internally as lawyers to help them.
• 18:08
  SPEAKER_03: By the way, thank you for using that phrase AI native law firm, because we're hearing that a lot.
• 18:15
  SPEAKER_03: And honestly, Rich, I don't know what that means.
• 18:18
  SPEAKER_00: Yeah.
• 18:18
  SPEAKER_00: It's it's one of those buzzwords now.
• 18:21
  SPEAKER_00: Yeah.
• 18:21
  SPEAKER_03: Could you explain what that is?
• 18:23
  SPEAKER_00: What we've wanted to and you hear the other way, which is we are an AI first law firm.
• 18:28
  SPEAKER_00: Okay.
• 18:29
  SPEAKER_00: So I guess the first layer is AI.
• 18:31
  SPEAKER_00: What I've always thought of AI for being an AI native law firm is that we are a firm that will utilize AI within everything that we do, as well as offering it to our clients for their benefit.
• 18:44
  SPEAKER_00: Now we're a startup-focused practice.
• 18:46
  SPEAKER_00: So we're going to utilize AI.
• 18:48
  SPEAKER_00: So we will essentially solve the problem of time and money for them.
• 18:52
  SPEAKER_00: So we will help get them the documents they need faster.
• 18:55
  SPEAKER_00: We will use it for document reviews.
• 18:58
  SPEAKER_00: So on our website at Startup Tech Law, and soon on Start Legal, we have an AI plus attorney document review, up to five pages, 150.
• 19:07
  SPEAKER_00: It will run through our AI tool.
• 19:10
  SPEAKER_00: Our AI tool does red lines, document comments on the side.
• 19:14
  SPEAKER_00: And then you also get an attorney that reviews what's on the AI output, but it's our AI tool.
• 19:20
  SPEAKER_00: Now, that is a perfect combination for clients and also for lawyers, because the client says, all right, rather than pay$500 for a document review with some attorney I never heard of, I can run it through this AI tool that's been developed over three years, and I can get an attorney to look at this and tell me what I need to do.
• 19:39
  SPEAKER_00: And I can tell you from all of the AI reviews that we've document reviews we've used, there's probably like 90% that what a client would need within the first pass of that document review.
• 19:52
  SPEAKER_00: And the remaining 10% is where that attorney can look at it and say, oh no, no, I think we need to add this thing now, or we should change this.
• 19:59
  SPEAKER_03: So it sounds like the concept of an AI native firm would match much better in a corporate or transactional type practice as opposed to uh litigation practice, which I I always think is very human-based.
• 20:14
  SPEAKER_03: But you know what?
• 20:16
  SPEAKER_03: I'm open to being told why I'm wrong.
• 20:19
  SPEAKER_00: It would be it would be a challenge to do it in litigation.
• 20:22
  SPEAKER_00: I don't think it's impossible, though.
• 20:24
  SPEAKER_00: I mean, we there's a there's a firm that's doing this now for for uh tickets and and and traffic, parking by and and traffic tickets, where it will just represent you as a lawyer.
• 20:35
  SPEAKER_00: The AI will do that.
• 20:36
  SPEAKER_00: And in the UK, there's a there's a there's a law firm there that actually was uh licensed to to practice and uh it's pretty interesting what's happening.
• 20:43
  SPEAKER_00: But I think there's an application for litigation as well, but it's not as easy to do.
• 20:49
  SPEAKER_03: If you're in a transactional setting, usually you're negotiating an agreement with another party.
• 20:56
  SPEAKER_03: And I don't see how AI takes over that aspect of the engagement.
• 21:02
  SPEAKER_03: And and if it can't, and if it can, I want to be told how.
• 21:06
  SPEAKER_03: And if it can't, I want to understand how you can then call it an AI native law firm.
• 21:11
  SPEAKER_01: I bet Rich can build one of those if he hasn't already.
• 21:14
  SPEAKER_01: Yes.
• 21:15
  SPEAKER_03: I I'm just really curious about all this because I I scour LinkedIn uh all the time, and I'm look, AI native law firm, how does that even really work?
• 21:27
  SPEAKER_00: Good question.
• 21:27
  SPEAKER_00: And Heather, you're right.
• 21:28
  SPEAKER_00: Okay, so if you're drafting a contract, we have two things.
• 21:34
  SPEAKER_00: One, I'm gonna start with a document review.
• 21:36
  SPEAKER_00: In the document review, it'll ask you what what tone you want to take.
• 21:39
  SPEAKER_00: Do you want to be aggressive?
• 21:41
  SPEAKER_00: Do you want to be moderate?
• 21:42
  SPEAKER_00: You know, if it's if it's a friendly agreement, maybe you're just, you know, not going to go aggressive.
• 21:48
  SPEAKER_00: On the document drafting side of things, too, the playbook will have certain clauses that are also exactly like that.
• 21:55
  SPEAKER_00: So it will help you take a position to be more aggressive on certain clauses than it.
• 22:00
  SPEAKER_00: Would be if it's a friendly agreement, you know, that's between two neighbors or something.
• 22:05
  SPEAKER_00: Even then you should be careful, but you can take a more aggressive stance and it would change the draft of the agreement based on your posture.
• 22:12
  SPEAKER_00: So you can do that and it would give you suggestions for the negotiation.
• 22:17
  SPEAKER_00: So just like a lawyer would say, well, I think maybe on this IP, we can go a little lighter on this, or we should go heavier, we should, you know, push on this one.
• 22:25
  SPEAKER_00: That's the same type of commentary it's going to give you on the draft of the agreement that you can then take the other side.
• 22:31
  SPEAKER_00: And it could also generate a term sheet as well.
• 22:34
  SPEAKER_00: So the term sheet would have that baked in before it even gets to the stage of having a contract drafted.
• 22:41
  SPEAKER_03: And of course, it could generate an email containing all of that that you could then send out that the other side will feed into its AI to analyze and assess and draft a counter email.
• 22:53
  SPEAKER_03: So I could see how you could get to an AI native law firm.
• 22:57
  SPEAKER_03: I have a question.
• 22:59
  SPEAKER_01: Rich, and you you probably know this, uh, and I'm not familiar with startup attorneys with your industry.
• 23:06
  SPEAKER_01: But in general, I would think that attorneys in your industry, in your field, are far more progressive and tech forward and open to AI than the rest of the field of law.
• 23:17
  SPEAKER_01: We talk about a lot on these episodes how attorneys are generally pretty resistant to AI and to change in general.
• 23:24
  SPEAKER_01: I'm just guessing that in your industry, that is not the case.
• 23:28
  SPEAKER_01: Or am I wrong about that?
• 23:29
  SPEAKER_01: And are startup lawyers who resist AI, if that is even a thing, at risk of being edged out by those that are embracing AI and utilizing it the way that you are, like layering it into your operational infrastructure, your day-to-day operations, offering it to your clients, et cetera?
• 23:46
  SPEAKER_00: I think that yes.
• 23:47
  SPEAKER_00: Uh, being that you're in a startup law practice, you are probably working with a lot of tech companies, a lot of AI companies, and you're gonna understand the technology.
• 23:57
  SPEAKER_00: You should understand the technology better.
• 23:59
  SPEAKER_00: So you're probably more open to utilizing it.
• 24:02
  SPEAKER_00: I think every attorney should do whatever they can to learn it as fast as possible.
• 24:07
  SPEAKER_00: And those that embrace it are gonna be better than those that don't.
• 24:11
  SPEAKER_00: And it will save them time, it will probably drive more revenue for them, and it will probably give a lot more flexibility as far as the work-life balance as well.
• 24:19
  SPEAKER_00: And I don't think that the revenue essentially will go down.
• 24:22
  SPEAKER_00: I don't think they're gonna be hurting for work, even with all the AI tools that come out because the AI can only go so far.
• 24:27
  SPEAKER_00: But the AI attorneys, the startup attorneys that I've talked to, there's different levels of of, I guess, expertise and startup law with AI.
• 24:37
  SPEAKER_00: And I wouldn't look at any of the AI tools that are out there for startup lawyers.
• 24:43
  SPEAKER_00: I've used them all, and one of which is very I know we've talked about this.
• 24:48
  SPEAKER_00: I ran a side-by-side comparison of that tool compared to what you do get in GPT.
• 24:53
  SPEAKER_00: And it was the exact same output, word for word, letter for letter.
• 24:58
  SPEAKER_00: But I'm being charged$199.
• 25:00
  SPEAKER_01: But it can't redline.
• 25:01
  SPEAKER_01: GPT doesn't redline.
• 25:02
  SPEAKER_01: I mean, this is one thing we didn't get into in that discussion.
• 25:05
  SPEAKER_01: Anyway, I digress.
• 25:06
  SPEAKER_01: Go ahead.
• 25:08
  SPEAKER_00: So, and I was talking like, why am I, why would we pay that much money for this, something like this?
• 25:12
  SPEAKER_00: We can just build it.
• 25:13
  SPEAKER_00: I think the best way to do it is go into these tools.
• 25:16
  SPEAKER_00: You know, go to Open AI, create a paid account, and use the GPT store, go to the GPTs, create a GPT, understand the the mechanic, go to Claude, build skills, learn how to do that, and start doing it yourself.
• 25:30
  SPEAKER_00: There's a very famous AI company out there that's selling their tools to lawyers, and I can't imagine ever paying for that, no matter how big my firm gets.
• 25:39
  SPEAKER_00: We don't need it.
• 25:40
  SPEAKER_00: We've already got it.
• 25:41
  SPEAKER_00: We've got a hundred skills.
• 25:42
  SPEAKER_00: And what we've done is we've taken all of our skills, like our NDA skill.
• 25:45
  SPEAKER_00: We've got seven different versions of our NDA, for example, all different clauses, playbooks for that.
• 25:51
  SPEAKER_00: And if we're going to create an NDA internally, we're just going to use that.
• 25:55
  SPEAKER_00: Why would we ever use someone else's tool to do this exact same thing?
• 25:59
  SPEAKER_00: And now if we can give that to our clients to use, they can benefit from that tool.
• 26:05
  SPEAKER_00: It comes down to who makes a better tool.
• 26:08
  SPEAKER_00: And if uh if you're a client, you're getting something that's drafted and built by lawyers who are your lawyers.
• 26:14
  SPEAKER_00: So if I was a lawyer starting this out, I never knew anything about AI, I'd go in and I'd suggest build your own skills, learn how it works, learn how to create.
• 26:23
  SPEAKER_00: The simple thing is go in and create an NDA using a skill so it could generate it for you and then teach the AI.
• 26:29
  SPEAKER_03: If we were ready for our Flintstone Simpsons Jetson segment, that would have been a perfect segue into it.
• 26:36
  SPEAKER_03: But it does make me think about something that I put on the episode roadmap that I haven't quite gotten to yet and and maybe never will.
• 26:45
  SPEAKER_03: But Rich, you're a super Jetsons lawyer.
• 26:48
  SPEAKER_03: And one of the things that's interesting, and of course, if you're in startup law, you have to be a Jetsons lawyer because all of the clients are Jetsons level.
• 26:58
  SPEAKER_03: But one of the things that we have talked about before is should a Flintstones level lawyer only try to appeal to Flintstone level clients?
• 27:08
  SPEAKER_03: And the same thing, should Simpson level lawyers only try to appeal to Simpson level clients?
• 27:14
  SPEAKER_03: And and how much friction is there when there's a disparity in the tech sophistication level between the lawyer and the client?
• 27:25
  SPEAKER_00: I think the Flintstone level attorneys should learn the AI for their own needs.
• 27:31
  SPEAKER_00: The same with the Simpson.
• 27:32
  SPEAKER_00: Do the clients need that though?
• 27:34
  SPEAKER_00: I think yes.
• 27:35
  SPEAKER_00: I think I think those clients are probably still going to open AI and they're still using GPT and Claude to ask questions or try to generate their contracts or draft their will.
• 27:46
  SPEAKER_00: I think there's an opportunity for any attorney to go in and say, I'm in a trusting a state attorney, for example.
• 27:52
  SPEAKER_00: Let's just hypothetically say, well, I've got all of these great drafts of wills and whatever.
• 27:58
  SPEAKER_00: Why am I just sitting onto this in a file in Microsoft Word or Office?
• 28:03
  SPEAKER_00: What am I doing with that?
• 28:04
  SPEAKER_00: I could take that same knowledge and give it to my clients and potential clients and maybe make some, you know, make some inroads to these other clients that are looking for this expertise in order to get more clients.
• 28:17
  SPEAKER_00: Maybe I could just make this into an AI tool that gives them that first draft, that first run-through of that will and charge them whatever for that, but then have them come to me to finalize it.
• 28:28
  SPEAKER_00: And that's where I stay in the loop.
• 28:30
  SPEAKER_00: I think the attorneys need, and it's going that way anyway, because those those those clients, yeah, they're Flintstone or Simpson, as you say, but they're not always going to be that way.
• 28:39
  SPEAKER_00: And, you know, the the next generation of clients are coming through, they're all used to working in in GPT and at least, you know, using a chat GPT or Claude.
• 28:49
  SPEAKER_00: They're going to want to just use that instead of you.
• 28:51
  SPEAKER_00: So I think you need to find how you create a better value than what they're getting out of these AI tools.
• 29:00
  SPEAKER_03: That really was a perfect encapsulation of what you've been trying to communicate.
• 29:06
  SPEAKER_03: I think we should probably move into our practice signal segment of our show, which is where lawyers in the wild present their problems to the world and we try to solve them, uh, sometimes using AI.
• 29:24
  SPEAKER_03: But today's practice signal is a little different because I know you're a super corporate guy.
• 29:30
  SPEAKER_03: So I wanted to bring in some sort of corporate-level practice signal.
• 29:36
  SPEAKER_03: A Delaware judge just ruled that corporations, LLCs, partnerships, trusts, and other artificial entities can vote in certain municipal elections in Delaware, at least where the town charter allows it.
• 29:53
  SPEAKER_03: This case involved Fenwick Islands, where many properties are owned by entities other than natural persons.
• 29:59
  SPEAKER_03: The ACLU said, no, only humans can vote.
• 30:03
  SPEAKER_03: The court rejected the challenge and leaned on Delaware law recognizing these entities as persons.
• 30:10
  SPEAKER_03: So, Rich, is this just a quirky one-off case?
• 30:14
  SPEAKER_03: Or do you think that we're gonna head into this direction?
• 30:17
  SPEAKER_03: Is there any way that we could use AI to better prepare for a future where if you're defined as a person, you get to vote?
• 30:26
  SPEAKER_00: Well, if that's the case, then where does it stop?
• 30:30
  SPEAKER_00: And who controls what the vote is within that company?
• 30:34
  SPEAKER_00: And if you're already in Delaware, let's say that you're a Delaware company and you've got four shareholders and they're all voting also at the same time for different, and I'll say this if they're if they're on one side of the political spectrum, right?
• 30:47
  SPEAKER_00: Does that then open up for that company, that brand then, for those customers to say, well, I'm I'm not going to buy your service or your product if you're leaning this way, if you're doing it this way?
• 31:03
  SPEAKER_00: And does it then open up for those companies to then disclose what beliefs they have?
• 31:09
  SPEAKER_00: Yeah.
• 31:10
  SPEAKER_00: Because if you're buying into a company, then you should know, well, this company is more for sustainability or they're more for disbanding the EPA.
• 31:20
  SPEAKER_03: Let's talk from a drafting standpoint.
• 31:23
  SPEAKER_03: Would you consider adding a phrase to uh an operating agreement or bylaws or some other governing uh corporate document that says that this entity is authorized to vote in any election where it is authorized to do so by law?
• 31:39
  SPEAKER_00: No.
• 31:40
  SPEAKER_03: You would not you would not add that.
• 31:44
  SPEAKER_00: I'm against all of this because I don't I don't believe I don't believe that was a good decision.
• 31:48
  SPEAKER_00: I don't think a company should be able to have any type of control like that.
• 31:52
  SPEAKER_03: But does it serve the client if the client is the entity?
• 31:56
  SPEAKER_03: If the owners say, hey, listen, this is great, we want to be able to vote in elections.
• 32:02
  SPEAKER_00: So think about the problem with data centers right now, right?
• 32:04
  SPEAKER_00: They're taking away, they're taking away clean water from communities.
• 32:08
  SPEAKER_00: They they don't have pressure in certain places to get water anymore because data centers have come in.
• 32:13
  SPEAKER_00: This is a big problem.
• 32:14
  SPEAKER_00: So does a data center get a hundred times more vote because they have more space than what someone has in a small one-bedroom ranch?
• 32:21
  SPEAKER_00: How much power would they actually get then as a corporation?
• 32:24
  SPEAKER_00: Is it based on the square footage, the number of acres that they have?
• 32:28
  SPEAKER_00: What do you do?
• 32:29
  SPEAKER_00: Is it just one vote per entity or is it based on how many parcel?
• 32:33
  SPEAKER_00: Like, I think there's so many challenges with that.
• 32:35
  SPEAKER_01: What do you think, Heather?
• 32:36
  SPEAKER_01: Yeah, I'm not sure.
• 32:38
  SPEAKER_01: It's not, you know, my area of expertise, but it definitely sounds more fair the way Rich is laying it out.
• 32:43
  SPEAKER_03: I think so too.
• 32:44
  SPEAKER_03: But you know what?
• 32:45
  SPEAKER_03: I think that I personally think that if you're gonna have opinions like this, lawyers need to be able to adapt to it, even if they don't like it.
• 32:55
  SPEAKER_01: But I do have a like piggybacking off something you said earlier, Ron, you said should Flintstone lawyers only be serving Flintstone's clients and you know, Simpsons and Jetson the same thing.
• 33:05
  SPEAKER_01: For AI native founders, I would think would be really seeking out an AI native startup firm.
• 33:12
  SPEAKER_01: I would think that would be on their list.
• 33:14
  SPEAKER_01: You know, you have a little sort of a checklist of what you're looking for in representation, who you want to, you know, to to help you with your startup.
• 33:23
  SPEAKER_01: And I would think that would be very important to a person who is building their startup around AI or even utilizing it heavily.
• 33:32
  SPEAKER_03: Yeah, I think I think the the tech levels of clients and lawyers really do need to align in order for everybody to be happy as a result of the engagement.
• 33:43
  SPEAKER_01: And it has to be very indicative to your uh your industry alone.
• 33:48
  SPEAKER_01: You probably come across your clients are probably just by nature far more technologically advanced, if you will.
• 33:55
  SPEAKER_03: I want to circle back to uh earlier in our show when we were when Rich was talking about how he thought Flintstone's level lawyers should adapt to the AI world.
• 34:07
  SPEAKER_03: And and Rich, I'm gonna put you on the spot as part of our Flintstone Simpsons Jetson segment.
• 34:14
  SPEAKER_03: So what are a couple of things that a Flintstone's level lawyer could do to up level a little bit in the Flintstone Simpsons Jetson's uh tech spectrum?
• 34:26
  SPEAKER_00: Depending on what is the practice, I think you have opportunities to give more value to your clients through AI and look at your pricing model, look at your billable, and look at ways that you might be able to offer something, whether it's a hybrid or even just a pure AI.
• 34:45
  SPEAKER_00: The Flintstone lawyer is not going to come out tomorrow and become an advanced AI expert overnight.
• 34:51
  SPEAKER_00: But they can get there.
• 34:53
  SPEAKER_00: And the good thing is, you know, two years ago, if you talk to anyone about AI and law, there's probably a handful of people that knew what they were talking about.
• 35:02
  SPEAKER_00: Over the last two years, I'm at different conferences and I see online and YouTube and all these, how many AI legal experts have all of a sudden popped up out of nowhere?
• 35:13
  SPEAKER_00: Where do they get their education so fast?
• 35:15
  SPEAKER_00: There's so many AI experts in general that are all you know speaking at conferences and like, oh, what were you doing like four years ago?
• 35:20
  SPEAKER_00: You're talking about marketing automation or something.
• 35:22
  SPEAKER_00: But now they're an AI expert.
• 35:24
  SPEAKER_00: Okay.
• 35:24
  SPEAKER_00: There's a time right now, unlike any other time, where if you do embrace this, if you start small, even like I said, go to GPT and figure out how to build the GPT or make skills in in Claude, start to start at that level and then work your way up.
• 35:41
  SPEAKER_00: There's not that many other people right now that understand it and really understand it.
• 35:46
  SPEAKER_00: This is like the early days of the internet.
• 35:48
  SPEAKER_03: Let's say you've convinced a listener who's a Flintstones-level lawyer who's set sat through all 21 of our episodes and only now is motivated to move up the spectrum.
• 36:01
  SPEAKER_03: What's the first thing that Flintstones level lawyers should do to start becoming AI fluent?
• 36:06
  SPEAKER_00: I would say figure out a way to get rid of the billable hour as much as you possibly can.
• 36:11
  SPEAKER_00: Think about the value that you're providing to the client and what you can do to internally utilize AI to help your practice become more efficient and save you time and then work to create that value for the client and maybe reducing the cost for them or using the AI to give them the benefit directly, but use it internally first.
• 36:36
  SPEAKER_00: That's the first step that we took, which was we want to make sure that these tools work.
• 36:40
  SPEAKER_00: Our document review tool two years ago was nothing like what it is today and where it's going to be in a year from now.
• 36:46
  SPEAKER_00: But we wouldn't be able to be in a year from now if we didn't have that early two years ago learning curve and trial and error.
• 36:53
  SPEAKER_00: These attorneys that are coming in at the Flintstone level, they need to start understanding that and start utilizing it internally for you.
• 36:59
  SPEAKER_00: I'll go back.
• 37:00
  SPEAKER_00: If you're drafting wills, think about all of the templates you have, all of the clause, everything you've built in all of your 20 years of practice.
• 37:08
  SPEAKER_00: Can you put that into a digital clone of yourself?
• 37:11
  SPEAKER_00: If that was the goal, you would say, if I need to create an AI version of me and I'm going to draft wills for someone, what are the things I'm going to need?
• 37:21
  SPEAKER_00: I'm going to need, you know, one, two, three, four.
• 37:23
  SPEAKER_00: And then let's go build that into an AI tool.
• 37:26
  SPEAKER_00: A few years ago, everyone was concerned about prompting and prompt engineering, and that was the hottest thing that everyone talked about.
• 37:33
  SPEAKER_00: You don't really see that much anymore.
• 37:34
  SPEAKER_00: It's not really even needed as much anymore.
• 37:37
  SPEAKER_00: So where we're going now with AI, it's going to become light years more advanced in the next few years.
• 37:42
  SPEAKER_00: All right.
• 37:43
  SPEAKER_03: So let let let's let's take that thought that you're about to express and craft it into a suggestion for a Simpsons level lawyer who's starting to be comfortable with prompting and actually having workflows come out of the AI environment.
• 38:01
  SPEAKER_03: How do you help that lawyer move closer to that systems-based Jetsons workflow?
• 38:07
  SPEAKER_00: I think there's a few things.
• 38:09
  SPEAKER_00: One, I'll go back to the type of practice that they have.
• 38:12
  SPEAKER_00: If it's one or two people in a practice, I think they can start utilizing AI internally for operations, not just for legal tools.
• 38:21
  SPEAKER_00: So look at how you can connect other tools to your AI.
• 38:26
  SPEAKER_00: You know, Claude's probably the hottest thing right now.
• 38:29
  SPEAKER_00: GPT was a few years ago.
• 38:31
  SPEAKER_00: You can add connectors.
• 38:32
  SPEAKER_00: So if you use a CRM, for example, your email, there's ways that you can utilize AI to save you time and money.
• 38:39
  SPEAKER_00: Look and explore that now if you're one of the Simpson level attorneys.
• 38:42
  SPEAKER_00: All of your billables, you know, you could probably look at what system you're using, connect it into your LLM and use that for your billables.
• 38:51
  SPEAKER_00: Use it for your calculations, your estimates.
• 38:54
  SPEAKER_00: Look at how you can create invoicing through AI now.
• 38:56
  SPEAKER_00: Being an AI native law firm, all of my billables and any attorneys that work with me, we all use a project management tool.
• 39:05
  SPEAKER_00: And at the end of every month, on the first of the month, I get a report for every client that everyone has ever worked for that month down to the minute.
• 39:14
  SPEAKER_00: And it will also create the invoice for them and put it into a file.
• 39:17
  SPEAKER_00: So when I wake up on the first of the month, I see all of my billables.
• 39:21
  SPEAKER_00: I see all of my clients and I see all of their invoices already created and generated for them.
• 39:26
  SPEAKER_00: So all I have to do is review it and then click a button and it gets sent out to them.
• 39:31
  SPEAKER_00: That's where I think that Simpson level attorney can get to, but they got to start Rich.
• 39:34
  SPEAKER_03: You have given us a fantastic roadmap for how lawyers are going to be able to adapt to the changing AI environment over the next several years.
• 39:46
  SPEAKER_03: The future may not be AI replacing lawyers.
• 39:49
  SPEAKER_03: It may be lawyers learning how to deliver value in a world where clients increasingly arrive informed, organized, and AI assisted before the very first meeting ever takes place.
• 40:01
  SPEAKER_03: Rich Rogers, thank you so much for being here.
• 40:06
  SPEAKER_03: My mind is blown, and uh I'm really excited to learn more.
• 40:11
  SPEAKER_00: Good to be here.
• 40:12
  SPEAKER_00: Thank you, Heather.
• 40:12
  SPEAKER_00: Thank you, Ron.
• 40:13
  SPEAKER_00: Appreciate it.
• 40:15
  SPEAKER_02: That's it for today's episode of AI Tools for Practicing Lawyers.
• 40:20
  SPEAKER_02: Thanks for listening.
• 40:21
  SPEAKER_02: We'll see you next time.