Latest / AI Tools for Practicing Lawyers / Episode 025 Do Lawyers Need New Rules for AI? Judge Elizabeth Gunn Says ... Maybe Not

Transcript

Episode 025 Do Lawyers Need New Rules for AI? Judge Elizabeth Gunn Says ... Maybe Not · 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_00: Artificial intelligence is forcing lawyers to confront some genuinely new questions.
0:21
SPEAKER_00: Should a law firm be able to charge a client separately for an AI tool that makes the lawyer more efficient?
0:28
SPEAKER_00: Should a judge use AI to analyze thousands of pages of financial records?
0:33
SPEAKER_00: And if AI can do in seconds the work that used to occupy a junior associate for hours, what happens to the next generation of lawyers who used to learn by doing that work?
0:46
SPEAKER_00: But maybe we don't need a whole new set of rules for artificial intelligence.
0:51
SPEAKER_00: Maybe the rules we already have are enough.
0:55
SPEAKER_00: If you put a hallucinated case in a brief, Rule 9011 already knows what to do with that.
1:02
SPEAKER_00: If you use AI to create a summary of thousands of pages of evidence, the rules of evidence already tell us how to establish whether that summary is reliable.
1:13
SPEAKER_00: And if you're using AI in representing a client, your existing duties of competence, confidentiality, and candor don't suddenly disappear because a machine helped you do the work.
1:27
SPEAKER_00: Judge Gunn is a United States bankruptcy judge for the District of Columbia.
1:31
SPEAKER_00: And as you'll hear, she's hardly an AI evangelist.
1:35
SPEAKER_00: In fact, she doesn't generally use generative AI in her chambers.
1:40
SPEAKER_00: But that's exactly what makes this conversation so interesting.
1:44
SPEAKER_00: Because we ended up talking about hallucinations, attorney fees, AI-generated evidence, the future of junior associates, how judges are beginning to use these tools, and whether law schools should embrace AI or keep it out of the classroom altogether.
2:02
SPEAKER_00: And Judge Gunn has a wonderfully simple way of looking at a lot of this.
2:08
SPEAKER_00: The technology may be new, but the lawyer's responsibility isn't.
2:14
SPEAKER_00: Welcome to another episode of AI Tools for Practicing Lawyers.
2:18
SPEAKER_00: I'm Ron Drescher.
2:20
SPEAKER_00: I'm Heather Gardner.
2:22
SPEAKER_00: And our guest today is the Honorable Elizabeth L.
2:26
SPEAKER_00: Gunn, the United States bankruptcy judge for the District of Columbia.
2:31
SPEAKER_00: And near and dear to my heart, the voice behind the popular podcast, Bad Boys of Bankruptcy.
2:40
SPEAKER_00: From managing high-stakes filings and financial forensics to evaluating attorney competence under bankruptcy rule 9011, Judge Gunn offers a unique perspective from the federal bench on where artificial intelligence belongs in modern legal practice.
2:58
SPEAKER_00: Judge Gunn, welcome to the show.
3:02
SPEAKER_01: Thanks for having me.
3:04
SPEAKER_01: Hope I can offer something intelligent here.
3:17
SPEAKER_00: Although it turned out you didn't, because you were uh dealing with a 200-page long brief for a motion for summary judgment.
3:28
SPEAKER_00: And you had oral argument on that.
3:29
SPEAKER_00: You've taken it under advisement as you've expressed.
3:32
SPEAKER_00: But here's my question: Did you use AI to help you summarize that brief?
3:39
SPEAKER_00: And if you didn't, do you wish you could have?
3:43
SPEAKER_01: I didn't.
3:44
SPEAKER_01: Uh, I am not gonna say I'm anti-AI, but I don't use it generally in chambers.
3:51
SPEAKER_01: Um, in some ways, chambers is a training environment for my law clerks.
3:57
SPEAKER_01: Uh, it's also a training environment for my interns.
4:01
SPEAKER_01: Um, and I I I think if I had 700 pages of bank statements and I was searching for something, maybe because that's I have people put things on the docket.
4:14
SPEAKER_01: Um, but a lot of what I do, and a lot of what my personal review is is looking not so much at all 200 pages, but there's usually a category of pages which are the highlights of the arguments.
4:25
SPEAKER_01: And I need to sit and think and really read those without anyone else summarizing them.
4:30
SPEAKER_01: Because while AI is intelligent, it's not me.
4:33
SPEAKER_01: And what I know and what it knows aren't the same.
4:36
SPEAKER_01: Um, and so, you know, I think in all of those ways, we haven't really used it in many ways.
4:42
SPEAKER_01: Um now, a sexy title from one of my bad boys episodes, hell yeah.
4:47
SPEAKER_01: I'll go in and be like, added an episode on guitars and fraud.
4:50
SPEAKER_01: Give me something fun that's to talk about.
4:52
SPEAKER_01: Or I'm recording an episode later this year, um, and it's gonna be about crypto cases.
4:58
SPEAKER_01: And I was like, give me a great, and we came up with tales from the crypto.
5:01
SPEAKER_01: So I have used it in those type of ways, or um sometimes to uh double check what we've done on other on on non-confidential stuff, but I would say for the most part, um, I'm slow to adapt.
5:15
SPEAKER_01: Um on my personal side, I've finally started to use it to take X and put it into Y format, but it's just not I don't know, maybe I'm I'm slow.
5:23
SPEAKER_01: I think I'm slow to adapt.
5:25
SPEAKER_01: I it's not because I'm anti-generative AI.
5:28
SPEAKER_01: Um, it's just not, it wasn't what was in my practice.
5:32
SPEAKER_01: And so maybe I'm if if maybe 25 years ago I'd be the person who would still walk into the law library to look in the books because I didn't quite trust that electronic database yet to give me all the right results.
5:43
SPEAKER_01: So maybe, maybe I'm just old-fashioned in that way.
5:47
SPEAKER_00: Is there any kind of tension going on amongst members of the bench about whether to use AI and how to how to use AI and how to police the use of AI?
6:00
SPEAKER_01: Yeah, I mean, there's as many opinions as there are black robes, and I have four of them, so that tells you how many opinions I have.
6:07
SPEAKER_01: Um, but yeah, everybody's got a different level.
6:11
SPEAKER_01: Um, the judiciary has been particularly slow in providing good overarching guidance.
6:16
SPEAKER_01: Um, one of the big things for us is there are some uh tools within certain legal providers that are available that we don't have access to yet.
6:26
SPEAKER_01: There's been some beta testing going on from some folks, but um I would say just as everything else the judiciary does, we're about three years behind the curve because there's 700 layers of review before we get through it.
6:39
SPEAKER_01: Um that's an unofficial statement, that is my opinion only, and should be taken for the farcical uh excess.
6:46
SPEAKER_01: I don't want that to get back to my bosses.
6:47
SPEAKER_01: I mean, there is they are looking at it, but I know judges who have said, give me an outline of the standard for this cause of action.
6:58
SPEAKER_01: And that's not their in brief, but that's the start, because maybe they don't have an intern or they don't have a law clerk.
7:03
SPEAKER_01: And I have, I know of all their colleagues who say I have completely forbidden the use of generative AI until we know it's a closed system and we don't have any issues.
7:12
SPEAKER_01: And so you got everything in between.
7:15
SPEAKER_01: Um, I would say I'm, you know, kind of the bigger middle group, which is it's out there.
7:20
SPEAKER_01: We're, you know, we're slowly tipping our toes in, but for the most part, there's as many opinions as there are people who are sitting on the bench.
7:28
SPEAKER_00: Do you do you think there's maybe a more vigorous discussion about that on the district and appellate court levels than in the bankruptcy court?
7:39
SPEAKER_00: Or do you think it's kind of like court-level agnostic?
7:44
SPEAKER_01: You know, I think on the trial court level, it's probably a little bit more aggressive than on the appellate court level.
7:52
SPEAKER_01: On the appellate court level, they get beautiful briefs and 14-point font and you know, all of those things.
7:57
SPEAKER_01: Um and uh and I think they have a smaller universe of things they're looking at.
8:02
SPEAKER_01: They have big records, but it's all something that's been filtered through the trial court.
8:06
SPEAKER_01: On the trial court level, we are given, some of us are given thousands of pages during during cases, some of which are highlighted, but most of which are just introduced into the record, and we're supposed to know what they all say.
8:19
SPEAKER_01: And so uh, especially on bench trials and on the trial level, uh, I think there's much more discussion than maybe on the the higher level appellate level courts.
8:30
SPEAKER_01: But I I don't know for sure.
8:32
SPEAKER_01: I'm not an appellate level judge, but I I do think there just there tends to be more opportunities for economies of scale on the trial level.
8:41
SPEAKER_00: But but really, wouldn't you love in a in chapter 11 cases to have AI analyzers, let's say, of the monthly operating reports when they're filed?
8:53
SPEAKER_00: Wouldn't you like to just dump something into uh an analyzer and have you have you uh see, oh no, this case is heading to conversion, or okay, all right, we'll give them another 90 days before we take a really close look at their plan.
9:10
SPEAKER_01: Sure, AI is that smart yet.
9:12
SPEAKER_01: I think AI can tell me that there's an outlier in a bank statement.
9:16
SPEAKER_01: I think if I put the right prompt in, which is tell me if there's something that goes beyond the cash collateral um variance point in the last 60 days, it can do that.
9:29
SPEAKER_01: But I don't I I still think there's something to be said about being able to know the entire record beyond them bars to make a decision.
9:36
SPEAKER_01: So maybe it could help with finding variances or if there's an something that's not compliant with a prior order, but is it truly my job to go fishing for that information?
9:46
SPEAKER_01: Not always.
9:48
SPEAKER_00: Well, I would assume that somehow it would come up in uh a litigation context where a party files a motion to convert a case on the grounds that the estate is uh is dissipating.
10:02
SPEAKER_00: Uh and then exhibit A has got to be the operating reports.
10:07
SPEAKER_00: And I was just wondering if there's room in the judiciary to analyze those financial documents on a higher level.
10:18
SPEAKER_01: Sure, there would be.
10:19
SPEAKER_01: I mean, again, I some of my colleagues are very good at writing prompts.
10:22
SPEAKER_01: Like take these seven documents that are from this case, look only at the information contained there, and tell me if there's a variance between these four I first uploaded and the 1700 pages of bank statements that have come along with it.
10:36
SPEAKER_01: I'm confident someone is smart enough to write that prompt.
10:39
SPEAKER_01: I'm not that person at the moment.
10:42
SPEAKER_01: Um but I, you know, I think there's there's also something to be said that it's not a best use of judicial time to necessarily be doing that.
10:50
SPEAKER_01: It's not my burden of proof.
10:52
SPEAKER_01: I'm supposed to, I mean, the party presentation rule just came down from the Supreme Court.
10:56
SPEAKER_01: If you want to really get geeky for a moment, am I supposed to go out and do that analysis or is that on the movement or the debtor to show one way or the other and then be able to back it up with the the native documents?
11:08
SPEAKER_01: There's some some something to be said is how far are we supposed to go in our own independent analysis versus what someone has put in front of us as part of part of a motion?
11:18
SPEAKER_00: Okay.
11:18
SPEAKER_00: Uh then let's look at this from a different angle.
11:21
SPEAKER_00: Let's say you've got the motion to convert, and one party has dumped all of the operating reports and schedules and and first day documents and everything they can into AI and written a really nice summary for that and wants to present that to your honor as evidence.
11:43
SPEAKER_00: What before I without actually having to answer admitted or or or overruled or denied, what analysis would you go through before deciding whether or not to consider that evidence?
11:58
SPEAKER_01: I mean, I think one of the things that that plagues the judiciary is whether what to extent the rules apply.
12:05
SPEAKER_01: You know, we have rules of evidence which allow for summaries and those kinds of documents and information.
12:11
SPEAKER_01: I don't think we apply the rules any different whether an associate builds 700 hours creating that summary or Claude took 700 seconds creating that summary.
12:21
SPEAKER_01: I think the evidentiary standard is the same.
12:23
SPEAKER_01: What was what went into it?
12:25
SPEAKER_01: What was the process of creating it?
12:27
SPEAKER_01: Can we reflect that it's an accurate summary?
12:29
SPEAKER_01: Is it something that can be used either as a demonstrative, or does it ultimately come in as a summary of voluminous documents?
12:36
SPEAKER_01: And how do you approve that?
12:37
SPEAKER_01: So I think we we have to apply the rules as they're written right now on something more substantive where uh a document was created um not using native documents, then we have a bigger problem because is it valid?
12:51
SPEAKER_01: Do we can we give it a foundation?
12:53
SPEAKER_01: But to the extent that the the native documents or the underlying documents are part of the record and it's a demonstrative or it's a summary of voluminous documents, that the rules of evidence already exist for that kind of stuff.
13:05
SPEAKER_01: How it's created, I don't think changes the application of the rules.
13:09
SPEAKER_03: Do you see how uh a firm, though, a chapter 11 attorney, for instance, could build out their own skill, a Claude or a GPT skill or a Harvey, where they don't have to prompt at all.
13:21
SPEAKER_03: They've put the guardrails in place and the instructions are there and they've uploaded the rules into that skill.
13:29
SPEAKER_03: So it knows exactly what it's looking for, and then building out that summary and then verifying it, whether they have their own support staff or themselves do that.
13:37
SPEAKER_03: Would that be something that the court would see as acceptable?
13:40
SPEAKER_01: I mean, in fact, I've been on panels recently with folks from major law firms who who actually have Harvey contracts because that was obviously the platform designated to the law marketed to the large law firms up front who have a person that's their job.
13:53
SPEAKER_01: You know, when we used to have the old legal librarian who would bill 125 hours for searching through the stacks for the tome from 1842, which supported the Statue of Elizabeth or whatever the heck else was being brought up.
14:05
SPEAKER_01: Now we have law firms laying off their librarians, but hiring the AI expert who does that, who creates internal systems, products, developments, updates, whatever it is.
14:19
SPEAKER_01: And as long as they can establish it and show what, again, make the foundational elements that are required for a sub summary document.
14:26
SPEAKER_01: I don't think you have to recreate it every time.
14:29
SPEAKER_01: Good board.
14:30
SPEAKER_01: Um, that'd be very difficult.
14:31
SPEAKER_01: But yeah, I mean, I think we have the we have at least we have some guideposts there, I think, as that kind of position.
14:38
SPEAKER_01: And that person has to be available or decl, you know, declaration or something saying what they did.
14:43
SPEAKER_01: I don't see how that changes the analysis either, or either way.
14:47
SPEAKER_01: But yeah, no, I mean, it it's crazy that some of these law firms are saying it's it's almost malpractice now not to have an AI stapper um on board.
14:56
SPEAKER_01: And frankly, the AI staffers are uh their salaries being covered by the four first-year associates they don't hire because they don't need the people to do that work anymore.
15:05
SPEAKER_00: Do you really feel that's true?
15:06
SPEAKER_00: Do you really feel that generative AI has become so powerful uh and all present that that you just don't need those junior lawyers anymore?
15:16
SPEAKER_01: That's the argument.
15:18
SPEAKER_01: Um I was just at a conference where uh they were talking about this very question in a number of different economic factors, and especially in data analytics analytics sectors, and we're talking about financial advisors, what you're paying$400 for financial analysts to do, these platforms can do once they're once they're trained up or once the prompts are created for a tenth of the price in a quarter of the time.
15:46
SPEAKER_01: Um, and so I, you know, I don't think you're ever gonna be able to get away from having an educated lawyer on the case because you have to be able to review and do the 90-11 analysis.
15:56
SPEAKER_01: But it's very, it's gonna be very interesting to see over the next decade what happens when they're not bringing in as many young folks and letting them essentially cut their teeth on those mundane tasks, which teach teaches them the basics of the next step.
16:11
SPEAKER_01: We're gonna get these people who haven't learned the basics and are arguing the next step.
16:15
SPEAKER_01: And that that I think could create an entirely different problem.
16:19
SPEAKER_01: But yeah, I mean, just from my, I don't, I mean, I don't know because I'm not in the the law firm area, but just from being a bunch of these different conferences and speaking to a bunch of managing partners or to, you know, partners who are managing the insolvency section and all of that, they are really having to reassess um one, the cost, the cost of carrying the the software, but two, how much how much goes in?
16:43
SPEAKER_01: Because you know, you used to hire five associates thinking one would hang on, and now if you only hire one or two, how many are gonna be left and how to find that balance?
16:53
SPEAKER_01: So I I think it can play a role.
16:55
SPEAKER_00: I I would be concerned about it hollowing out my firm in seven, eight, nine, ten years if I don't have younger lawyers to come up through those ranks.
17:05
SPEAKER_01: We're seeing a lot more of the firms, and this is this is somewhat, you know, somewhat in a COVID issue, somewhat the market was strong before COVID.
17:15
SPEAKER_01: There is a great dearth of higher middle level associates right now.
17:19
SPEAKER_01: We we the firms are hiring young associates because they they need the bodies because we got we got busy after COVID.
17:25
SPEAKER_01: Right.
17:26
SPEAKER_01: But there is very, there are very few people in that, let's say, five to nine, 10 year range right now who have been the in the industry.
17:36
SPEAKER_01: I'm of a similar generation.
17:38
SPEAKER_01: I came out in 05, which was the Batsifa year.
17:42
SPEAKER_01: So we were very busy for a minute and then 08 hit.
17:45
SPEAKER_01: And so I go back and look at a lot of my contemporaries who came out and how many of them left the industry between, let's say, 08 and 10 or went in-house.
17:55
SPEAKER_01: And I was thinking back, of all of us who started around that time, let's say from 04 to 06, right before the, you know, right around that big boom time, there were only a handful of us still in the industry, like maybe, maybe less than 25%.
18:10
SPEAKER_01: So, I mean, we're seeing that same kind of issue here, um, but maybe even more amplified um exemplified because of the the COVID issue that came in the middle.
18:19
SPEAKER_00: You know, I have a good friend who who's retiring, as most of my good friends are, and he is working for a prominent regional firm that has a Maryland office that that wants to get uh a bankruptcy associate.
18:37
SPEAKER_00: And he said, Yeah, I need somebody who's like five or six uh years out that's got a little business.
18:43
SPEAKER_00: And I said, they don't exist.
18:46
SPEAKER_01: Or if they do, they're gonna carry more than you want to pay them.
18:49
SPEAKER_00: They're not gonna be able to do that.
18:51
SPEAKER_00: Yeah, they're not leaving where they are, you know, because because they are the unicorns.
18:56
SPEAKER_00: That's right.
18:56
SPEAKER_00: But Judge, you brought up something that frankly I think Claude might find offensive because you suggested it would take 700 seconds for it to do something that maybe it could do in 70 seconds or even quicker.
19:09
SPEAKER_00: But we won't tell Claude.
19:11
SPEAKER_00: But you did bring up the idea that that there had been somebody in the office that would spend 70 hours or however many hours on something that that generative AI can do much, much faster.
19:25
SPEAKER_00: So that leads us to a couple of really important questions that members of the bar have to be struggling with, and I would think members of the bench would have to be struggling with, which is uh fee applications, right?
19:39
SPEAKER_00: A fee application where you would have seen 20 hours on document review and not thought twice about it on a piece of complex litigation.
19:49
SPEAKER_00: But now don't you have to think, wait a second, you have Harvey licenses, why are you spending all of this time?
19:56
SPEAKER_00: Is that a legitimate inquiry for a judge to ask at this stage of the game?
20:02
SPEAKER_01: Yes and no.
20:04
SPEAKER_01: Because usually those levels of analysis, at least for me, start with what did the agreement state between the client and the and the law firm?
20:14
SPEAKER_01: Because there is a very wide range of client and law firm.
20:19
SPEAKER_01: There are some law firms whose engagement agreement says we use this unless you specifically tell us to opt out of it.
20:26
SPEAKER_01: And if you opt out of it, then you understand that there's going to be humans doing it and it's gonna take longer.
20:32
SPEAKER_01: There's law firms that say we won't use it unless you say it's okay, and that will modify how many hours we spend doing it.
20:40
SPEAKER_01: And there's people who just haven't figured it out yet.
20:43
SPEAKER_01: And so, um, yeah, I mean, I have yet to have a challenge on it.
20:48
SPEAKER_01: It's also the question, just like, you know, can you do, you know, because some law firms still bill per Lexus search, or they they upcharge the PACER fees and things like that.
21:00
SPEAKER_01: And then where does that line fall with the Harvey, you know, subscription?
21:05
SPEAKER_01: Or is it is it just becoming built into the m the hourly rate?
21:09
SPEAKER_01: Like we're more efficient, so we can bill you at a higher rate, but we're not gonna bill you expensive.
21:15
SPEAKER_01: It I don't think it's shaken out yet.
21:17
SPEAKER_01: Um, I what I can say is I think it's really something that not everyone has taken a hard look at their engagement agreement.
21:26
SPEAKER_01: And there are some states which are mandating and then some bars that have talked about mandating people either have a specific opt-in, opt-out, like you can't use it unless your client says yes, your client specifically says I'm not agreeing with it.
21:40
SPEAKER_01: But I don't think that's I don't think that's also shaken down the path.
21:43
SPEAKER_01: So I haven't had the challenge yet.
21:45
SPEAKER_01: I certainly will, you know, we look at fees for reasonableness, but we also look at the underlying agreement with the client.
21:52
SPEAKER_01: Um and you know, there's there with all of the the questions about client.
22:00
SPEAKER_01: Information and confidentiality, and how closed or closed circuits really, um, and how much does a Harvey subscription cost?
22:07
SPEAKER_01: Can my small practitioners just throw stuff into Chat GPT and call it good?
22:11
SPEAKER_01: And please don't do that.
22:13
SPEAKER_01: Um, you know, there's there's a line to be drawn, but a lot of it is still being fleshed out.
22:18
SPEAKER_01: Although I will say a lot of I was on a panel with someone um about six months ago who is an executive at a very large Fortune 500 company, and he said that they specifically go into each of their outside councils agreements and say, you may not use it unless you previously disclosed it to us and we approve the use and we know what your system is.
22:38
SPEAKER_01: So um clients are looking at it.
22:40
SPEAKER_01: I'm not, I'm not so sure maybe people who are going into bankruptcy are as attentive to that as maybe those who are actually profitable and worrying about long-term things, but it is becoming part of the vernacular on the corporate level, at least, with respect to the use.
22:56
SPEAKER_00: I have to think that a person who is being brought into a company as a chief restructuring officer, which of course we see all the time in complex chapter 11 cases, is going to be sufficiently sophisticated to understand that that's a thing to consider in their engagement with Chapter 11 counsel.
23:19
SPEAKER_00: Uh, do you feel like it's the role of the court to inquire as to the terms of the engagement agreement when considering a fee application?
23:30
SPEAKER_01: It's gonna be easy to see from the charges whether or not they're back charging for a hard research or from the entries which says review, you know, put information into the AI and review results.
23:41
SPEAKER_01: Like those are things that are obvious for me.
23:44
SPEAKER_01: And if you uh you always presume until proven wrong, that when council files their fee application, they have reviewed their time records and that they're consistent with their representation agreement.
23:55
SPEAKER_01: And I guess for me, if the challenge comes in, exhibit A had damn well better be the darn well, sorry, better be the exhibit um the engagement agreement, which substantiates the use or the non-use or the if that if that's the issue, we're gonna have to see whether there it was allowable or not.
24:11
SPEAKER_01: But I mean, other than that, um probably not.
24:14
SPEAKER_01: But if if it's an issue, then that's that's the first place you go, right?
24:18
SPEAKER_03: Well, DC, DC doesn't have a a rule on AI that AI has to be disclosed.
24:24
SPEAKER_03: They have an ethics rule now on AI, but it just says the attorney has to understand and validate.
24:28
SPEAKER_03: Is rule 90-11 giving judges everything they need?
24:31
SPEAKER_03: So if an attorney signs the filing, does it really matter if there's bad information where it came from, if it came from the attorney, an associate, paralegal, or an AI output or Claude?
24:42
SPEAKER_01: So my position on this has always been if we crow start creating specific rules as to what is or is not allowed, the rule is gonna be obsolete before I pass it, and that what we always needed to regulate the profession on this exists in 9011 and then this the other rules of professional ethics that correspond to the practitioners.
25:04
SPEAKER_01: Um it is almost like if I make a rule, then it's gonna, I'm gonna miss the next iteration and there's no reason to do it.
25:13
SPEAKER_01: I'm not I'm that's my position.
25:15
SPEAKER_01: That's why if you look at my website, I don't have a certification, I don't have any of that stuff, and when I have issued orders or I have issued um sanctions, it is based on violations of Rule 911 or one of the rules of professional ethics or some combination thereof.
25:32
SPEAKER_01: But that is my position.
25:34
SPEAKER_01: Um, it is not necessarily a judiciary-wide position.
25:38
SPEAKER_01: Um, but I for me, until something comes along that changes my mind, that's the position I've been taking.
25:43
SPEAKER_01: And I I think that creating more specific rules just creates um uh more opportunity for abuse thereof.
25:51
SPEAKER_01: And if I have all the discretion under the current standards, then I should just allow that and use my discretion under those standards to continue to monitor what attorneys are doing.
26:01
SPEAKER_00: You know, Heather very skillfully tried to get your honor away from fees, but I'm going back there because this is unquestionably one of the most interesting aspects of the AI revolution.
26:17
SPEAKER_00: But what we haven't talked about at all is AI fees in consumer bankruptcy cases, which is coming.
26:24
SPEAKER_00: Let's say you have a law firm that uses a well-known consumer bankruptcy AI tool that charges$100 a case.
26:36
SPEAKER_00: And what they want to do is in a flat fee chapter 13 case, they want to nudge those AI charges onto the expense side, and they're gonna say, well, I've I have a no-look fee of$6,000.
26:54
SPEAKER_00: I got$2,500 from the client up front.
26:58
SPEAKER_00: I want to load as many expenses into that retainer as I can, and then charge the balance of the$6,000 as fees, and not count expenses as part of the$6,000.
27:11
SPEAKER_00: I'm retired now, so I can say I used to do that on every case, and I never heard word one from a trustee or a court or a client about it.
27:23
SPEAKER_00: But I'm just starting to wonder if a Chapter 13 lawyer and and the and the fee agreement says I can charge it.
27:32
SPEAKER_00: Fee agreement says I can do it.
27:33
SPEAKER_00: Will a court look behind that fee agreement and say, no, that$100 needs to be part of a firm overhead?
27:40
SPEAKER_00: Or is that something that doesn't strike you as being offensive?
27:45
SPEAKER_01: Let me make sure I understand the question, which is always a good judge way of saying, hold on a second, I need a minute to think.
27:50
SPEAKER_01: Um, you're saying uh you're using Bill and the Big Case name person here.
27:57
SPEAKER_01: Um best case used to be the one.
27:59
SPEAKER_01: And instead of having a full subscription for the firm, they're adding an AI component to it to do some analysis of the credit report or to pull documents in on a per case basis.
28:10
SPEAKER_01: So in addition to the straight firm subscription, there's a fee amount per case in order to do so to use their documents.
28:18
SPEAKER_00: That's right.
28:22
SPEAKER_01: And there might be clients who aren't being that that service isn't being used for that client because they have such impeccable records uh that they don't need it.
28:30
SPEAKER_00: It's gonna be used for every client.
28:32
SPEAKER_01: Yeah, so it's every client.
28:34
SPEAKER_01: Um I mean, look, we allow for the what$34 charge for the the credit report that comes out, right?
28:44
SPEAKER_00: And the and the credit counseling course and the financial education course and the filing fee.
28:49
SPEAKER_01: Well, the I think the credit file the credit the the the last three are different.
28:53
SPEAKER_01: Like those are codeslash court imposed fees.
28:57
SPEAKER_01: Credit counseling, credit education, and filing fee are all built into the you want relief, like this is this is the charge to get through the door and to get out the door.
29:08
SPEAKER_01: The credit report, though, I mean, I routinely allow that fee as a first of all look at counsel, go next time, freecreditreport.org or whatever it is, because that you can get it for free from there.
29:20
SPEAKER_01: But there's like a$10 or$12 charge sometimes to pull a credit report, and that's that's generally gone through to ensure that the information is good.
29:29
SPEAKER_01: If they're trying to charge the client to make their job easier while still charging the no-look fee, I don't know.
29:38
SPEAKER_01: I don't because I don't know, I don't know how that process works.
29:42
SPEAKER_01: If that that, you know, so it's gonna be a it's a good question.
29:45
SPEAKER_01: The answer, the good answer is I don't know.
29:47
SPEAKER_01: I haven't encountered it yet.
29:49
SPEAKER_01: Um, does it become part of overhead?
29:51
SPEAKER_01: Does it become part of the piece that you pull out of the fee itself because it's a form of services rendered?
29:58
SPEAKER_01: I I don't I don't I don't know.
29:59
SPEAKER_01: I mean, is there a clear answer at this point?
30:02
SPEAKER_01: Probably not, but I'm I've I'm sure it's coming.
30:05
SPEAKER_01: Sure something's coming along the lines.
30:08
SPEAKER_00: All right, now I'm ready to get away from fees because I've got a different question.
30:13
SPEAKER_00: You know, once upon a time, you would get a brief that has all these string sites, and you ignore them.
30:22
SPEAKER_01: No, no, I run all those through a brief checker.
30:24
SPEAKER_01: We check every site.
30:25
SPEAKER_00: So what's a brief checker?
30:27
SPEAKER_00: How does that work?
30:28
SPEAKER_01: So we have it.
30:28
SPEAKER_01: We have it's a program, and we we have both Lexus and West Law, welcome to the judiciary.
30:33
SPEAKER_01: We get free unlimited, we get unlimited basically everything.
30:36
SPEAKER_01: And what and they both have ones where we can literally pull and insert the brief into either of the databases and say, check the sites.
30:45
SPEAKER_01: And they now they'll check the validity of the sites when they're quoted, and we find either if we find a site that's no good or we find a site that doesn't look right, we will have to go back and manually check the quotations or whether it stands for the proposition it's stated.
30:59
SPEAKER_01: And I think one of the things I said the judiciary isn't that there's beta testing, is some of my colleagues have the program where they can put the brief in and say, not only check the validity of these sites, but make sure what they're being cited for is consistent with the case.
31:13
SPEAKER_01: But I don't have access to that yet.
31:14
SPEAKER_01: I'm not a beta tester, but that's coming or it's it's available.
31:17
SPEAKER_01: But yeah, we if it's a long brief or it's something that's being heavily relied upon, we either run a check or the law of the law clerks double check it.
31:24
SPEAKER_01: Um, but I mean, if it's a standard motion for relief, I'm pretty much not gonna go check what 362A says.
31:30
SPEAKER_01: I I might know that one pretty well, but you know, if it's a longer stuff, we will definitely definitely look.
31:35
SPEAKER_01: And especially if something looks funky, um, or it's a pro se brief, we're usually running those to double check them.
31:42
SPEAKER_00: Has your honor come across hallucinated cases yet?
31:46
SPEAKER_01: Yes, many.
31:48
SPEAKER_01: I have uh an unordered appeal because I sanctioned uh petition prepare for filing, you know, hallucinated cases.
31:56
SPEAKER_01: Um uh I think that I have I've had a lot lots.
32:01
SPEAKER_01: I've had another in he's now represented by counsel, but it was an individual who was pro se who filed a brief full of hallucinated cases and said, but I hired three paralegals to check them for me before I submitted the brief.
32:13
SPEAKER_01: And I thought to myself, bravo.
32:16
SPEAKER_01: Um yeah, so I mean, yeah, there's different, yeah, lots of it.
32:20
SPEAKER_01: And and uh the court maintains kind of a running database of sanctions orders.
32:26
SPEAKER_01: Um, obviously, we have a very limited database, so it's just bankruptcy attorneys, but I I know that the many of the other judges are also there's a database being maintained, you know, courthouse-wide.
32:36
SPEAKER_00: That's still uh I'm always amazed that it's still happening.
32:41
SPEAKER_00: What are these attorneys hiding under a rock somewhere?
32:44
SPEAKER_00: Why why do you think it's still happening?
32:46
SPEAKER_00: Uh has it slowed down?
32:48
SPEAKER_00: Was it were there a lot and then it's it's diminishing?
32:51
SPEAKER_00: Or is it is it happening just as often as it ever was?
32:56
SPEAKER_01: I we are all really busy, right?
32:59
SPEAKER_01: And so I'm gonna say the pro sees are never gonna slow down.
33:02
SPEAKER_01: That's just gonna keep being fairly prolific.
33:05
SPEAKER_01: I think less, we're seeing less in the attorney realm.
33:09
SPEAKER_01: I think uh they're they're getting the notice, they're understanding that.
33:12
SPEAKER_01: But I mean, there was a major case in front of Marty Glenn in the Southern District of New York, where a very large law firm had the Mayakulpa that they had hallucinated sites in the brief, that people who charge four figures an hour submitted to the court.
33:28
SPEAKER_01: Um, and what we're seeing more so these days is how you handle the error is almost or more important than what your error was.
33:40
SPEAKER_01: Um, not that maya culpring and fixing the problem is always gonna get you off the hook, but at least it will it'll soften the blow.
33:49
SPEAKER_01: Um, but I also think that fuses and patience are getting shorter as this is becoming more and more, more and more talked about.
33:56
SPEAKER_01: So um, yeah, and I'm I think attorneys of all sizes have been caught.
34:01
SPEAKER_01: I'm not gonna pigeonhole anyone, but it's a busy time in the bankruptcy world.
34:06
SPEAKER_01: Um, but that doesn't mean that the, as I said, let's go back to what I said before, doesn't mean that 90-11 or the rules of ethics have changed in any way and your candor to the court obligations have changed in any way, whether you're busy or not.
34:18
SPEAKER_03: And that's that's that's interesting.
34:20
SPEAKER_03: I think you're bringing up a Solomon Cromwell um citation, like the hallucinated citations, of course, from where we we all pay attention to because it's in the bankruptcy realm.
34:29
SPEAKER_03: But New York is one of two states that has put out AI rules, and they've both said uh New York and Florida, you don't even have to disclose, but the attorney is responsible for what they're signing, just as you said, putting the onus back on the attorney, which I I think is right too.
34:46
SPEAKER_03: Um, but would that be something that sounds like exactly the attitude you would have if it came before you?
34:53
SPEAKER_01: I mean, the that's the the whole the whole thing is what did you do?
34:57
SPEAKER_01: How did you do it?
34:58
SPEAKER_01: What was wrong with it, and how did you fix it?
35:02
SPEAKER_01: Um, you know, I haven't had that issue yet.
35:07
SPEAKER_01: I know there's a wide range of judge decisions, some which is, um, you fixed it all, you said you're not gonna do it again, I'm gonna let you up the hook to you fixed it all and you you did it all, but you know what, this is still a 9011 violation, and I can't let it go.
35:23
SPEAKER_01: And I'm I haven't, I haven't, thankfully haven't had to get to that n level of detail.
35:30
SPEAKER_01: Um but I I recognize that there is a very large range, and I I think it's all discretionary and it, you know, hopefully I don't ever have to get there.
35:41
SPEAKER_01: That would be lovely if I never, but I'm sure I will.
35:44
SPEAKER_01: Um, and I I I'm probably gonna have to think really hard about where I fall on the spectrum and exactly where everything lies.
35:50
SPEAKER_01: And it's it's fairly fact-specific, but I unfortunately, just like everything in bankruptcy, sometimes it just depends on your judge, because some judge might do one thing and some judge might do another thing.
36:00
SPEAKER_01: Um, and I don't think any of them are necessarily wrong.
36:04
SPEAKER_00: You know, before we leave the the land of hallucinations, which sounds like like a yellow submarine album or something like that, uh we did an episode 21 Ways That AI can hallucinate in your legal brief.
36:20
SPEAKER_00: And, you know, at the top, of course, is it invents the the case, and that's the one that we're most familiar with.
36:27
SPEAKER_00: But then you go down, sometimes the pin sites are hallucinated.
36:32
SPEAKER_00: Sometimes the quote's a little bit distorted.
36:36
SPEAKER_00: But then you go all the way down, and sometimes they just give you the wrong, like instead of it being clear and convincing as the standard, it'll say preponderance of evidence.
36:48
SPEAKER_00: And we've seen that.
36:49
SPEAKER_00: Do you feel that like that there should be a sliding scale of culpability for hallucinations coming up in a legal brief?
36:58
SPEAKER_00: Or no.
36:59
SPEAKER_00: Read the case, quote the case, file the brief, and move on.
37:05
SPEAKER_00: Which, by the way, would be my position, but I'm not the judge.
37:11
SPEAKER_01: I think there's a difference between dropping an inaccurate citation in support of a proposition or an inaccurate pen cite in support of a proposition, and quoting a case or making a multiple-page legal argument based upon a case that either doesn't exist or a statute that isn't actually there, or a proposition which actually the case doesn't actually support, and yet that is the crux of your argument.
37:38
SPEAKER_01: Like, you can't trust AI to give you the statute that you want it to say.
37:43
SPEAKER_01: Like that's just not necessarily the thing.
37:45
SPEAKER_01: So I think there is a um econom, not economies of scale.
37:49
SPEAKER_01: That's about I'm trying to think of the official economic word, but I do think there is is is a difference between a simple, inaccurate site and a relied upon as authoritative authority, which doesn't exist.
38:01
SPEAKER_01: Um and there there are differences in caliber uh or size of the the the inaccurate statement.
38:09
SPEAKER_00: All right.
38:10
SPEAKER_00: Now we could leave hallucinations and and you know the the UAE um recently issued uh AI protocols and instituted AI mechanisms for all of its judiciary across the country.
38:29
SPEAKER_00: Um because they they believe that the time has come to standardize that and to implement that nationwide uh in their courts.
38:41
SPEAKER_00: Um what do you think about that?
38:42
SPEAKER_00: Do you think that's something that we ought to do here?
38:48
SPEAKER_01: I I think we have a lot of judges with um with with jud with um lifelong tenure.
38:54
SPEAKER_01: I think we have a centralized uh overseeing council, the judicial council, which is headed by the the the chief the chief justice of the supreme court, um or judicial conference, sorry.
39:06
SPEAKER_01: But we're not I don't think we're necessarily set up as a judiciary the same way as the UIE is set up.
39:12
SPEAKER_01: Um while we have the judicial conference, which can make promulgations of certain policies and can can make certain changes.
39:21
SPEAKER_01: Um one of the hallmarks of the system is that our judges are given a lot of individual discretion on how they run their courtrooms, how they run their hearings, how they run their trials, how they run their chambers.
39:32
SPEAKER_01: And I don't believe we're the exact same system.
39:36
SPEAKER_01: So if there's going to be anything, I think it would have to come through the formal federal rules or a statute or the formal establishment procedures, which is a number of steps, which require comments and all those things.
39:50
SPEAKER_01: Um and I mean, if you practice in any jurisdiction that has more than one judge, and frankly, you practice in a jurisdiction with one judge who has me, myself, and I, um, sometimes they don't all agree.
40:02
SPEAKER_01: And so I'm not sure you're ever gonna get all the judiciary to sign off on the same same rule.
40:07
SPEAKER_01: I mean, one example is um after the Northern Pipeline decision, uh, invalidating the uh the the grant of authority to to bankruptcy judges in in the 1978 code, um, the Supreme Court gave Congress four months to to fix the problem.
40:26
SPEAKER_01: And what ended up happening is that the judiciary scrambled and came up with the emergency rule of 1982, which then it took Congress two and a half more years to pass in the 1984 amendments to the code.
40:36
SPEAKER_01: Um, and even that still, we don't necessarily know what a rising and rising under related to is, because then we have Stern v.
40:42
SPEAKER_01: Marshall, which gives us constitutionally and statutorily core, and those are two different concepts.
40:47
SPEAKER_01: So um could Congress make the rule?
40:50
SPEAKER_01: I don't know.
40:51
SPEAKER_01: Could the Supreme Court dictate that Congress make a rule?
40:54
SPEAKER_01: I don't know.
40:55
SPEAKER_01: Could the rules, the civil rules committee, pass a civil rule?
40:59
SPEAKER_01: I don't know.
41:00
SPEAKER_01: Um, but I do think we have a very, very different system than you find in in just some places like the UAE, which have a more centralized control over the judiciary, and uh that's one of the hallmarks of our judiciary, and it's one of the reasons it's hard to put all the cats in the same bag.
41:19
SPEAKER_00: So I was going to ask you this question, and then I thought, well, she answered it, but I'm gonna ask you this question anyway.
41:27
SPEAKER_00: Uh so we're seeing uh different uh philosophies in law schools uh about the use of technology in AI.
41:37
SPEAKER_00: And for example, there's the University of Chicago School of Law that said no electronics in one L courses, just none.
41:45
SPEAKER_00: You know, that pen that has a microphone, uh you can't even bring that in.
41:51
SPEAKER_00: No electronics.
41:52
SPEAKER_00: Uh the laptop you've used to take notes, it's out the door.
41:57
SPEAKER_00: On the other hand, um, you know, at the uh Maryland uh spring break weekend, I had a panel with Nancy Rappaport, who is a uh law school professor at the University of Nevada, Las Vegas, and she brings in uh a course that is going to try to help one else really understand how to best use AI in the legal setting.
42:27
SPEAKER_00: Which way, which where are we gonna go with this?
42:30
SPEAKER_00: Are we gonna go to the University of Chicago School of Law, the UNLV uh School of Law?
42:36
SPEAKER_00: How does Judge Gunn see this playing out?
42:41
SPEAKER_01: So different law schools have different philosophies of the type of skills they want to give their students on the way out.
42:47
SPEAKER_01: I think Nancy Rappaport is a perfect example of a professor who's trying to get her law students to have very practical skills so that they can walk out the door and become a practitioner on the way out.
43:00
SPEAKER_01: University of Chicago graduates a lot of appellate clerks, and that is a different type of program.
43:07
SPEAKER_01: Um I I hire law students every year, I hire in I have interns and externs every year from a variety of different schools.
43:16
SPEAKER_01: It seems like most schools have uh at least adopted a methodology of teach them how to not kill themselves on the technology and teach them how to use it responsibly.
43:30
SPEAKER_01: I think there's probably some theories behind the no technology rule.
43:33
SPEAKER_01: My kids' schools, they started giving them laptops in elementary school, and now they're back, now that my kids are in high school, they've backed off and said elementary school and middle school students can't have technology-based homework.
43:45
SPEAKER_01: Um, so I think we're all learning.
43:47
SPEAKER_01: Is it better to teach them how to use the tools and how to make them a better practitioner?
43:53
SPEAKER_01: And frankly, I've had some interns teach me how to do a few things, and I was like, oh, okay, great.
43:58
SPEAKER_01: You know, you learn from them how to do stuff.
44:00
SPEAKER_01: Um, and then you know, and so um, yeah, I I know people who who go to business school, MBA school.
44:06
SPEAKER_01: There are two primary MBA schools that teach the case law method that's Harvard and the University of Virginia.
44:12
SPEAKER_01: And people go to those schools because they don't just want to take lecture courses, they do this case law, case-based study learning.
44:19
SPEAKER_01: Um, and I think you're gonna end up seeing that in law schools.
44:21
SPEAKER_01: People may end up going to Chicago because they want to do a more holistic, old school type of learning.
44:28
SPEAKER_01: I'm not classifying it as old school, but a different type of learning than maybe a UNLB or another school that's doing a more hands-on practical learning.
44:36
SPEAKER_01: And that's not wrong.
44:37
SPEAKER_01: There are lots of lawyers, there are lots of ways to practice law, there's lots of things to do.
44:42
SPEAKER_01: But if we see this shift in schools, I think it's gonna just be ways different schools set themselves out for their theory of the kind of students they want to attract and the kind of students they want to graduate.
44:52
SPEAKER_01: And that's not saying that there's any right way to do that.
44:54
SPEAKER_01: There's a lot of different ways to practice law and to be a lawyer, um, but might be becoming more like we see with master's programs or PhD programs where there's only three or four schools that that teach the way or the courses or the ideas that you want to do that.
45:09
SPEAKER_01: And that's not bad.
45:10
SPEAKER_01: I mean, law schools have been very ubiquitous for a very long period of time.
45:14
SPEAKER_01: I mean, you grad, you go to Harvard, you go to, I mean, I was a Boston college in Harvard, we would borrow a couple of their professors and they'd come teach classes.
45:21
SPEAKER_01: And I was like, so wait, why why is it so fancy over there and not so fancy over here?
45:25
SPEAKER_01: And it and they were very similar.
45:27
SPEAKER_01: Maybe this is a way we see some diversification within the types of law schools and how they recruit different students.
45:33
SPEAKER_00: You know what?
45:34
SPEAKER_00: That is a great comment to end this episode.
45:39
SPEAKER_00: Uh, Judge Gunn, thank you so much for being here with us.
45:43
SPEAKER_00: Uh and uh to our listeners, make sure to check out Bad Boys of Bankruptcy podcast.
45:49
SPEAKER_00: We'll have links in the uh show notes.
45:52
SPEAKER_00: And we will see you next time on AI Tools for Practicing Lawyers.
45:57
SPEAKER_02: Thank you, Judge Gunn.
46:00
SPEAKER_02: That's it for today's episode of AI Tools for Practicing Lawyers.
46:05
SPEAKER_02: Thanks for listening.
46:06
SPEAKER_02: We'll see you next time.