Big Technology Podcast - AI Is Upending Law. Is That A Sign For The Rest Of Us? — With Melia Russell

Episode Date: December 10, 2025

Melia Russell is a senior correspondent at Business Insider. She joins Big Technology Podcast to discuss how AI services are already making inroads in the legal profession, helping lawyers dig through countless documents via natural language search and compression weeks long research processes into minutes. We discuss what's happening, how it's impacting legal jobs already, and why it's likely an early indication of what's to come for professional services more broadly. Hit play for a fascinating deep dive into one of the more advanced applications of AI today. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology on Substack + Discord? Here’s 25% off for the first year: https://www.bigtechnology.com/subscribe?coupon=0843016b Questions? Feedback? Write to: [e-mail] --- Wealthfront.com/bigtech. If eligible for the overall boosted 4.15% rate offered with this promo, your boosted rate is subject to change if the 3.50% base rate decreases during the 3-month promo period. The Cash Account, which is not a deposit account, is offered by Wealthfront Brokerage LLC ("Wealthfront Brokerage"), Member FINRA/SIPC, not a bank. The Annual Percentage Yield ("APY") on cash deposits as of 11/7/25, is representative, requires no minimum, and may change at any time. The APY reflects the weighted average of deposit balances at participating Program Banks, which are not allocated equally. Wealthfront Brokerage sweeps cash balances to Program Banks, where they earn the variable base APY. Instant withdrawals are subject to certain conditions and processing times may vary. Learn more about your ad choices. Visit megaphone.fm/adchoices

AI in law has come a long way since a lawyer was caught using fake chat GPT generated cases and was sanctioned. The technology is upending the field and it may be a sign of what's to come for the rest of us. That's coming up right after this. Capital One's tech team isn't just talking about multi-agentic AI. They already deployed one. It's called chat concierge and it's simplifying car shopping. Using self-reflection and layered reasoning with live API checks. It doesn't just help buyers find a car they love. It helps schedule a test drive,

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the next generation of identities, including your AI agents. Visit octa.com. That's OKTA.com. Welcome to Big Technology Podcast, a show for cool-headed and nuanced conversation of the tech world and beyond. Today, we are going to talk about a fascinating story about how AI is upending the legal field, a hidden story, one that I've been hearing about privately, but I'm excited to speak with you about publicly, and we have the perfect guest to do it with us. Today, Malia Russell is here. She's a senior correspondent, a business insider, and she covers how AI is changing the legal field. You'll be welcome. Thanks for having me, Alex. So let me take you back to June 2023.

There's a Reuters headline. It says New York lawyer sanctioned for using ChatsyPET cases in a legal brief. Basically, the lawyer put this argument out to a judge and said, these cases are a support my argument, but those cases were completely fabricated by ChachyPT got sanctioned. And the whole world said if you are, you know, if lawyers use generative AI, They're going to include hallucinated facts and you can't trust them. But two years later, the field has come very far since then. So talk us through like the last couple of years and how AI tech has become a very useful tool for lawyers.

That case struck fear in the hearts of lawyers across America and became the nightmare scenario that I think colored a lot of public perception of what happens when lawyers use AI. the reality is lawyers are using it every day without ending up in Reuters headlines or Business Insider headlines although it does still happen I think the latest count I read was like over 600 identified pleadings where lawyers had included content caught by a judge that was contained a hallucination from a general purpose chap pot or other tool. What has shifted since 2023 is we have this Cambrian explosion of applications that are legally tuned for the legal professional. These are tools that understand the work they do. They have structure so that they know the right documents to pull at the right time.

What are the models to turn on for the best outcome? here. How do we protect confidentiality rules within the firm? There is chat to be T for lawyers or Claude or Gemini, but there's also a completely new wave of point solutions that is delivering real results and real outcomes for lawyers. Yeah, and we talk often about where the ROI from AI is going to come from. And there have been a couple of areas that people have talked about coding is obviously the top one, customer service is another. But one of the issues has been what happens when you get into a highly regulated field like law that can't afford mistakes, that can't afford fake cases, that can't afford hallucinations. And this episode came

about because I was with a friend who's a lawyer at a football game. And he started telling me about all the different ways that his firm is using artificial intelligence. And it really stunned me because it was a clear case of how this can have a return on investment and how this can change the field. And I think, you know, I sort of tease this in the beginning. But it is a way that if you look at what's happening in law, you're going to see what's going to happen everywhere else. Let me give you one example. And I'm curious to hear if you if you're here more. So obviously a big part of a lawyer's job is search, searching through documents, trying to find other cases that may or may not be applicable for a defense or prosecution or

whatever it might be. The way that they've done it before generative AI has been using different terms and connectors. So you search for different terms that may be applicable for your case. Then you read some and you see, okay, is this something I can cite or not? What this person told me was instead of like basically doing this like keyword search, painstaking, time, time intensive, what they are able to do now is drop full, sophisticated paragraphs into generative AI tools like Westlaw, and it will return connected, relevant, and important research, basically back doing the research job for them effectively and fully minimizing the amount of time that they spend on this work. And the change here is that whereas before

you had lawyers going into conference rooms, digging through filing boxes of papers, looking for the firing gun, if you will. Now, they're turning to tools where you upload all of your relevant documents and depositions and interviews on a case. And you're able not to just search for keywords, but you're able to search for, you know, find all of the, you know, find all of the supporting evidence that X happened and it's going to turn up what is related and saves them potentially weeks, months of work. Right. That is, that's expensive work, by the way. I mean, what this, what I think this is doing is it's compressing. I mean, you talked about it weeks, you could take weeks of work and basically condense it into a prompt. Like,

what are the economic implications of that right away? Sure. And I'm going to give you a little bit of backstory. So I've been covering legal tech for about seven months now. And it came about because my editor-in-chief at Business Insider, long before she was a journalist, was a law school graduate and a law clerk. And she ran in social circles with a lot of lawyers. And what she kept hearing was this fear and paranoia around the death of the billable hour. Lawyers get paid by the hour. there are definitely exceptions to that where the work is more flat fee based. But if you're working with enterprise clients, you typically charge by the hour. And software that promises to save them time, that math doesn't math for them when the risk is that it cuts into their

revenue at the end of the year. What I found talking to lawyers is that there's still paranoia that this changes the business model for them. It will nudge them to look at alternative business models like switching to flat fee. Another one I hear a lot is that they're still going to charge by the hour, but the kinds of work they charge a billable hour for changes, you, a, you know, top partner at Quinn Emanuel might be billing $10,000. an hour because there's a lot of repetitive work that your class of associates used to do

that you're doing with a generative AI tool now. So they can push aside some of the work they used to bill for and instead put the real premium on the human judgment that comes in after that kind of first

pass work that happens with generative AI tools. You know, to take a step back lawyers are notorious Luddites, and there's a few reasons for that. First, they work largely in documents, and for a very long time, software wasn't especially good at extracting meaning from text. You also had lawyers storing files on physical services on premises for increased security and control over that data. confidentiality is like the...

Pretty important in that field. What changed is that chat GPT offered law firms the greatest demo in the history of software for what it could do for the white color professional. I think a lot of lawyers looked up from their screens after that moment and said, oh, this is going to transform us. What we saw was that the clients are now coming to the law firms and saying, we're seeing how AI is improving our efficiency internally. What's your strategy?

Well, that's important because, like you said earlier, that lawyers have resisted this or they are, you know, they billed by the hour. And that's another thing that I've also heard is that the clients have said, not only what's your strategy, but they're demanding it. They want to see the breakdown of the tools that they use because, again, if you're paying this fee per hour and your service provider is being intentionally inefficient, you're going to be pissed. And so, okay, maybe the fee per hour changes, but the clients are now coming to the lawyers and saying,

do this. So the law field might not even have a choice here. It may just immediately go this way. Yeah, I think lawyers are realizing if they don't adopt it, their clients will find other firms that do. Can we pause for a moment just to appreciate the technology story here? Now, look, there's definitely lots of problems with the technology, but the fact that AI today is good enough that we're having this discussion for real, like a for real discussion that it can condense the work down from weeks to a couple of minutes. or an hour. It's pretty remarkable. I mean, think about, again, this, the story that everybody heard, 2023, lawyers like using a hallucinated case and sending it to a judge and getting sanctioned

to now the technology is good enough that it is something clients are demanding their lawyers use. Yeah. I think they're seeing that, I mean, one thing that's changing is that the basic, the general purpose tools, are becoming good enough for a lot of legal work. The bread and butter of legal work is searching and writing text and AI. That is the perfect surface area to apply AI. So it's kind of a no-brainer on the part of the client. And they're seeing their legal bills balloon year after year. It's one of the bigger line items on their budget every year. And so they're saying, we want to know. I was actually at a legal conference recently. And on stage was the general council of a mag seven company. And interestingly, he was being interviewed by his own outside

council. It was meta, right? I can't say it was off the record. It was a Chatham House rules. But someone in the audience asked, do you expect you'll be saving money next year on your legal bills? And he said, I absolutely hope so. And like, here the chair of his outside counsel is sitting right next to him. I did talk to after his panel, another Mag 7GC, who said, you know, we brought in all of our outside councils for a summit about a month ago. and I stood in front of them and I said, I want to know what tools you're using, how you're tracking it, and what kind of cost savings I can expect. What do you think has helped on the technology standpoint to get the technology from the point where it was hallucinating a couple years ago to now it's so good? Is it just that OpenAI's GPT models have gotten better and hallucinate less?

Or is it the fact that companies like Westlake or sorry, West Law have decided to implement it and that's getting good? What do you think is happening on the technology front? So in legal tech, you have two companies that are the dinosaurs of this industry, LexisNexis and Thompson Reuters, which makes Westlaw. And the pitch they make to law firms and general counsels is that you should buy our software because we're, When you're generating case citations, you can link those citations in a source of truth, which is our own vast repositories of case law. So their argument is that use us because we're going to limit hallucinations because we own the data. that has left, you know, a long trail of legal tech challengers to make the case that we can partner with the data providers to get around your hallucination concerns.

They're increasingly working on features. Imagine like a spell check for, okay, I've completed this brief. I want the AI to scan it that these cases match real cases. Does what my associate wrote here in this brief match more than 85% what you think the intent of the original case file says? So it's not just checking that it exists, but it can even check, does it match what the case law actually says? So the technology is moving really quickly. Law firms are, I think, completely puzzled what is going to be the vendor of choice here, and they are trying everything. LexisNexis and Thompson Reuters are like non-negotiators. They pretty much, if you're a big law firm, you have to have one or both of those software subscriptions because,

it's just like mission critical for the work that they do, that legal research. But they are buying licenses to so many other AI platforms and point solutions, testing all of them. And that has this effect of, you know, inflating those startups revenues and driving up their valuations. And we can get into that in a bit. Right. So basically what you're saying is the key here is grounding. the technology in the data, right? So Thompson-Roters has the data, LexusNexis has the data, and if you're able to connect that with the models, you'll have less hallucinations and make it

useful. Yeah. And one of the BFDs in Legal Tech this year was Harvey announced a strategic partnership with Lexus Nexus. So Harvey is the Goliath of the legal tech space. They make soft software that helps, you know, that aims to help lawyers deliver legal services faster, more affordably and out of higher quality. And they're all, they're AI native. AI native. They were one of the first checks out of OpenAI's startup fund back in 2023 and had early access to GPT4s, GPT4.

They announced this year a strategic partnership with Lexis Nexus. So if a customer has a LexisNexis subscription and. a Harvey subscription, they can now access LexisNexis within the Harvey app. So it made a very strong case that you can trust our results. I will say that lawyers are still hitting home to their junior lawyers. You need to check the work. I think what's so interesting about some of the sanction cases we've seen is that the lawyers are taking personal account. ability for not checking the AI's work. And that kind of feels maybe an obvious thing to do. But, you know, there's a firm this year, one of the top 10 law firms in the United States,

Latham & Watkins. And earlier this year, they were repping Anthropic in a copyright lawsuit. And one of the associates said that they had used Claude to help generate citations within an expert testimony that they submitted for part of this copyright case. And Claude had hallucinated the authors and title of a paper in one of the citations. So it's very meta in that you have a law firm representing Anthropic that used Anthropics product and produced a hallucinated case. I mean, it was it was hugely embarrassing for all parties involved, and that is the terror striking big law right now. I think firms are really rethinking the way they train lawyers around this, and it starts at the onboarding. I know Latham and Watkins rolled out an AI Academy recently for their entire first-year

associate class where they brought 400 lawyers into a conference hall in Washington, D.C. And for two days, they sat through product demos. and they heard from general counsels at their clients, and they did listening sessions on how partners at the firm were using AI. And the through line in this talk was that we have exceptional standards here at Lathamon-Walkins, and the final product is still your responsibility, and you've got to keep your hands on the wheel. Yeah, no, it's an interesting point.

And it sort of brings up another thing that my friend told me about the tools that he's been using, that they get things wrong. But they also will get him or can get a lawyer a certain portion of the way there. And, you know, again, like it's doing all this research. It's pulling the relevant cases and coming to the wrong conclusion. But if you're a lawyer who has some seasoning and double checks the work, that actually that becomes the time safe. So you don't necessarily trust it for the output, but you do rely on it for a lot of the work that it does. One of the interesting questions that I hear around legal AI is who gets the most use out of it? Is it the early career lawyer or a more senior partner?

And to take a step back, the work that an early career lawyer is most similar to what the Gen AI tools are very good at. It's writing those citations and checking them. It's taking first passes at writing memos. It's sifting through digital filing boxes trying to find that firing gun. So there's, yes, they can use AI to speed up that work. But what's really interesting is that I hear the more seasoned attorneys are actually getting huge value out of using these tools because they can recognize more quickly looking at it. what's not up to snuff. Like, they have a BS radar that might allow them to say,

okay, I just want to do a first pass with the gen AI, but I can recognize more quickly what's real and what's not and allows them to just get to a better result faster. Yeah, it's very interesting in terms of the way that AI is used because, you know, there's been this question. So think about engineering, right? Does it make every coder a 10x coder? or does it make a 10x coder, a 100x coder, right?

Does it make the superstars sort of unreachable because it puts this powerful tool at their hands and they really know how to use that? And there's been this debate, like, for writing, for instance, like, you know, AI seems to just produce average writing, which is great because it brings up a lot of writers to average, which is a massive improvement for many writers. The other side of it is, you know,

what can really help the experts? But in law in particular, it seems like those that are, those that are, yeah, have experience or seasoned are going to get a lot from this and really be able to like maximize their productivity in a way they couldn't previously. I think that's right. And this came into question recently. There was kind of a super viral moment in legal tech a couple of months ago. There was an anonymous post on this subreddit for legal. legal tech officiados that asked, is anyone really using these tools? And this person claimed to be a former employee of Harvey, which who knows if that's really the case. But they were suggesting

that only junior lawyers wanted to use Harvey because you figure, you know, the tropes that the younger lawyers are going to be more tech-savvy and more they're using these tools personally, so it comes more naturally to them. But Harvey has certainly pushed back that they are seeing high adoption and engagement kind of across generations of lawyers and that they're actually seeing huge gains in usage, weekly active usage, year over year. so let's end this section just talking again about the ROI question it's interesting with law because you can't really like back it into a traditional ROI calculation because you could be paying like $20 a month for Chad Chip-T but

probably you're not if you're using you know Westlaw but you could be paying let's say a subscription but that brings your work down by such a dramatic amount that you get to bill less. So like you actually have a negative ROI even as it's making you more productive. But I think that I actually would be curious to hear your perspective on how these companies are going to do the ROI calculation. And whether we're just going to see this type of pattern repeat itself where the technology works in very impressive ways. But for industries and enterprises in particular, it changes the way that they've done business for so long that there will be, you know, just these speed bumps to try to get it, get it working and rolled out.

Well, something I hear from time to time is that it's harder to measure the work you could now do that wasn't possible before Gen A.I. So, yes, you're maybe, maybe you do see a reduction in billable hours, but lawyers are telling me that they're able to dig deeper on cases because, AI helps them be more efficient. And this is happening even at the, you know, really small and mid-sized law firm level. I talked to a solo practitioner. He's a civil rights lawyer in San Diego. He repped a family where the children had been unlawfully detained at the U.S. Mexico border. and he spoke to me about how using tools he was able to save time on generating citations or summarizing depositions. And he could use that time to think through his strategy better for the courtroom, to spend more time crossing the border to go meet with a family and glean more

from them, this idea that there's so much more work to be done when you aren't just sifting through boxes, I think will be part of that ROI calculus for firms. I do think we're going to see what's happening in legal, happen in accounting, happening consulting. It seems to be happening in legal very quickly because I guess I'm not sure why exactly I mean I have a guess it's just that it's it's words right it's words accounting is numbers it's harder for these models to do but it's words semantic search like it's sort of it's the low hanging fruit for generative AI where the others will I think consulting you know it probably requires like some tool use you know you go in you do calculations with code, same with accounting, but these things are just getting better

and better at all these professional services tasks. And if what we're seeing now in legal is any sign that this is a conversation I think many industries will be having over the next couple of years, if not having now. And also a more optimistic spin on this is that, sure, maybe firms slough off the billable hour model and they switch to flat fee billing for more. services. But they're also potentially going to save on labor costs if they start to displace lawyers because they can do more with the better software tooling. We might be looking at more profitable law firms in the future that run on leaner teams. And, you know, this is like, I feel like we see this conversation playing out in tech, the idea of the, you know, one person

Unicorn Company, and I think we're going to see that model echo in law as well. All right. I want to take a break because, well, because we have to. But also, when we come back, I do want to talk about the employment question. I want to talk a little bit more about how individual lawyers are empowered. And then also how the clients using this stuff might change things in law. So that's coming up right after this. These days, it feels like every $3 should be working a little harder, but figuring out where to put your cash can be confusing. That's where Wealthfront comes in. Wealthfront is a tech-driven financial platform built to help you grow your savings into long-term wealth.

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One's tech team isn't just talking about multi-agentic AI. They already deployed one. It's called chat concierge, and it's simplifying car shopping. Using self-reflection and layered reasoning with live API checks, it doesn't just help buyers find a car they love. It helps schedule a test drive, get pre-approved for financing, and estimate trade and value. Advanced, intuitive, and deployed. That's how they stack.

That's technology at Capital. And we're back here on big technology podcast with Malia Russell, senior correspondent at Business Insider talking about how AI is changing law. Let me ask you this. So I'm a fan of WebMD. It's not the best website, but it does definitely allow me to go to the doctor's office when I'm feeling bad and say, I think that this might be the problem with me. Now, I did once search about scratchy throat. and it suggested that I had Ebola, which was inaccurate, just for the record. So it can't, yeah, that's good news. But it's even become, with generative AI, that exercise has become even more intense for me. I definitely will speak with, like, Dr. Chitp. Before I go into the doctor, and then I'll recite, like, sort of what I think is going on. And the doctor says, you're the most annoying patient in the world, but you might be

beyond something. And so I'm curious to hear your perspective about how generative AI might change the lawyer-client relationship where maybe the client will come in and have written the brief or have like, you know, can do some of their own research with these generativeensions and, you know, present similar cases or ideas to lawyers and whether it becomes more of a consultative type of approach when you go to a lawyer versus what typically happens now where the lawyer, you know, says, all right, you know, $15 a minute and why don't you sit down and listen. Yeah. I do think we're going to see the WebMD thing play out. We already are. This is happening more at the, I guess, civil law layer where you're

not going to probably have Fortune 500 companies coming into an Amlaw 10 firm saying like I did my homework on this and this is what I think we should do. But I hear stories that people bringing personal injury suits, for example, or employment suits are coming in with their own CHAP-G-T-approved ideas on how they think this should go. It's amazing. And, you know, I think- And then you, like, vet it with a real lawyer, right? And then they can sort of say yes or no versus just, like, throw it into the legal system. Yeah.

And I think there's a question like, okay, did this just create more work for the lawyer having to like untangle that person's preconceived notions about how things should go. I think what we're going to, what's going to be a more interesting shift is the arrival of more self-service legal services. So the first wave of legal tech companies were developing software to sell the law firms and general counsels to help them deliver legal services faster and more affordably. The newer wave is companies doing the legal work itself. They are either attorneys spinning off from big law to open their own solo shops. They might be Silicon Valley entrepreneur saying like, I think I have a, you know, a better alternative to a legal shop that specializes

in master service agreements or NDAs. So we're seeing this sort of. So we're seeing this surge of companies provide legal service directly to consumers and companies, and they're not doing the billable hour at all. I mean, that would be kind of against their ethos. They're like, almost like we're a, you know, a consumer-friendly brand. I think we will see though that model start to, like, eat away at traditional law as people say, I don't have to go to a law office. I can, you know, Zoom my lawyer who's AI assisted and get it done faster. Can I share a quick tangent on this? Have you done this yourself? Is that what you're going to tell us? No. No. But a really funny thing that's happening is this is, this is happening in pre-neum. I just wrote a story about this in prenuptial agreements.

Earlier this year, I'd wanted to do a story on there's a couple of tech companies that sell, sorry, there's a couple of tech companies that offer online prenups. And you go to a website and you fill out a questionnaire. And it's not unlike using a turbo tax to file your taxes. You're like filling out the questionnaire with all your assets. And then, you know, poof, but a bang. it returns in a number of hours or days a pre-up that's maybe been lawyer reviewed if you pay for the ad on. And pre-ups are rising in this country and something like 10% of the pre-ups generated

annually are now coming through these tech companies like HelloPrenup or First or Neptune that serve couples kind of like a D-to-C pre-up. So, that's just like one niche example, but I feel like that's already changing how clients use legal services. So if it's that easy to just like, you know, press play and generate a legal document, write a prompt and generate a lawsuit or prenup. You know, there's been this question about what this is going to do for employment of lawyers. And I really like the argument that it's just going to necessitate more because it's so easy now to, there's like no barrier to, initiate legal action that you're just going to need more people that are trained to handle

the stuff. I like the argument. I don't like the fact that we're going to have more lawsuits, but I think that's a pretty good argument in terms of anticipating what's going to happen from here. It's like a sticky conversation because... Well, let's have it because I have some other stuff that I want to talk about on legal, but let's hear this. I don't want to get in trouble, but I feel a lot of companies right now are selling a pitch around where democratizing access to legal services. And yeah, I think the criticism of it is that it's going to result in many more frivolous cases jamming up our justice system. Which works so well as it is. Exactly. I don't have an answer yet on whether that really happens.

But I think it's a real risk of this kind of democratization of legal advice. Oh, yeah. I mean, I think that's where it's going, unfortunately, because we have enough frivolous lawsuits. But, yeah, you just prompt a lawsuit. When you can do that and just fill in the blanks, it becomes an issue for an already overtaxed system. And the other side of it is that, you know, maybe that will create more work for some firms. but you've already foreshadowed where we're going with the junior law associate. People have been talking a lot about how entry-level jobs are hard to come by. And today, people are coming out of law school, and they're typically prepared to do the job that Westlaw application does now, sifting through documents, stitching together, different things.

There's a small crisis unfolding now where entry-level workers, aren't able to find work today, but it seems like it's going to be an acute problem in law. So what have you heard on that front and where do you think it's going? I think it's still very early days. As far as I know, employment of lawyers is still at record highs in the last decade. And there's also record high applications for law schools right now. Like this is a very attractive field for. I thought that that, so I saw that stat that law school applications have gone up. Yeah. There's been some, so, so we can pause on this for a minute because it's very interesting. There's been some speculation that that's just because the economy

isn't strong right now. Or maybe it is the undergrad workers who like tried to get entry level jobs can't and they are doing what most unemployed undergrads do, which is sit on the couch and then say, I'm going to get that advanced degree. Yeah. Well, for the ones that are graduating, as of last spring, they seem to, for the most part, still be finding employment. Law firms have never been more profitable, so they are still growing. I think they're anticipating that they might see an increase in demand for their services, so they can continue to hire larger associate classes. But I think where we're really going to see the crunch,

is at the long tail of small to mid-sized law firms where they are, it's going to be easier than ever for them to stay lean. They don't need to necessarily even take on more work to remain more profitable because they can operate more lean. It's almost like being an AI-assisted lawyers can be a lifestyle business, you know, for some of these people. I mean, to make a lot of money and don't work that hard, right? That's a good, that's a good living if you could do it. Yeah, I want to know anything about that. Same here. You know, people talk about the law firm is shaped like a pyramid. At the tippy top, you have the high-powered, wealthy partners in the middle. You have mid-career lawyers.

And at the bottom, you have a battalion of first through fourth year associates that are doing that grunt work. And, you know, that's where we could see – I've heard it – the pyramid morphs into a diamond where you get like a bold at the mid-career level because of what we talked about earlier with like they can leverage these tools, but they still have the years of – human work and hard-earned judgment to be able to like evaluate the results they're getting from from AI and then you just see like a pinching happen at the very bottom. Yeah, that's like it, you know, I saw that you kind of laughed as you said that the pyramid turning into a diamond and it does feel like this kind of cliche thing that you would see at a conference where like the PowerPoint animates from the triangle to the diamond and everyone's like, whoa. But that being said, it actually feels right, right? I think a lot of fields could

end up in that situation where the pyramid, because a lot of fields work in the same pyramid, and that pyramid can morph into the diamond. I've also heard a rectangle. I've heard a rectangle, an hourglass. Like, people have fun with the nomenclature changes. So an hourglass is like, no, nobody in the middle? I think that idea. It can't be all these shapes.

It just can't. Well, I'll tell you what might be a silver lining of this. What I hear partners say is that if the very junior lawyers don't have to do as much of the grunt work, what's going to be more important for them is to sit closer to the partner and understand better the human judgment that they're applying to the outputs. Yeah, but the partner's never going to let them sit there. why would the partner have an entry-level worker basically babysit them they are going to want to be unencumbered by having to teach i mean i would say there might be some altruists out there that want to help the next generation but these are lawyers come on you know what's actually like

really gross sounding is i hear that more of them are exploring ways to do um simulations for their associate classes so imagine like going into a virtual training and working on a leveraged buyout or preparing for a deposition. And so, like, because if you're a first-year associate, you're not going to put them on a major M&A transaction, but you can let them do a pretend one in this simulated environment. And I think there might be a legal tech provider that's talking to law firms about offering that solution. You can use generative AI to do that.

That's true, too. Right. Yeah. You could use a general purpose, AI probably. do that too. I think I said kind of gross because it just feels like, oh, did I go to law school to then pretend to be a lawyer? But if they're just not getting the repetitions on real matters, it's a way to kind of supplant that. But I think that underscores the problem with so many entry-level jobs in the future, right? If this technology goes the way, you know, that I anticipate

it will. And the question haunting, I think, firm leadership is if we hire fewer early career lawyers, where do the mid-career lawyers come from? You know, like... What's the answer to that? They don't know. I don't think they know. I don't think they know. It really what I... Maybe companies will have to just have these training programs, right? Where you're typically used to bringing in a young person, having them cut their teeth on really difficult stuff. And they provide some value to the company without a doubt, but not an exceptional amount. And, yeah, then you promote them. And maybe because generative AI can do their work, you just sort of, like you said,

you'd like have like simulation hunger games or something like that. Right. Whoever rises to the top gets a mid-level position. Yeah. It's fascinating. I will say that I think there's an exodus brewing where lawyers are. Our early career lawyers are reading the writing on the wall and kind of getting out while they can, there have never been more opportunities for them to go work at a tech company because suddenly there's going to be over $3 billion of venture capital poured into legal tech companies this year. So they can step aside from that partner track and join a tech company helping to be.

build the future of their profession and what a, you know, compelling pitch compared to, like, oh, how do you feel about, like, managing a robot? But isn't it interesting because a lot of the specialists in professional services are being contracted to, like, effectively feed their knowledge to AI bots and that will allow AIBots to replicate the work they do? Like, there's, you hear every, every, you know, a couple of months about, like, a financial services, job listing at an AI company where your job is to upload financial models for $150 an hour. And you might be happy doing that work for a little bit if you can't get,

if you can't get a mainstream job in finance. But this is actually becoming a side hustle for lawyers right now. I hear that they get, you know, cold in bounds every week from some of these like data labeling data, sorry, data model labeling or training companies. Do you think that's wise for them to do that to do that work i asked i had a call with one yesterday it's called micro one and they are building a marketplace of experts that train um models for the big ai labs and i asked him um do the lawyers that you contract with not tell their employers they're doing this because I would think that that would be like time away from their real job. And also, lawyers aren't known for having a lot of free time anyway.

And he said, like, no, they gather on our slack. They're using their pictures and their real names. I think it's, I think they wear it as like a badge of honor that they're part of the change in their industry. But that's the question, right? Like, are they automating their profession, the future of their profession? It's really tough. Or canv analyzing it? Is that what you mean?

Yeah, I mean, it's tough for, one person to be like, well, you know, if I don't go ahead and label this data, it's not like I'm stopping this change from happening. But what they are effectively doing is helping these AI companies automate the work of many. I guess there's really no turning back the tide on that front. I don't think there's a downside of developing these skills, though. I think that the lawyers of the future need to be tech savvy because it's what the clients expect. And And I hear that, you know, if you're a second-year associate and you are super savvy with Lagora or Hebia, you know, a tool that allows you to do corporate due diligence, maybe the other partners like seek you out for troubleshooting, you know, like it could put a spotlight on you as someone who can help lead the firm into that black box. future. Before we leave, I want to talk about these legal startups, which you've reported on

extensively. Harvey, the one that we've talked about here a bunch, I've reported on for big technology a bit. Their valuation is $8 billion. So just talk a little bit about like the valuations for these companies and how they'll justify them. Yeah. Harvey is a Goliath of this space. They came out very early. The founders, Winston Weinberg is a, you know, recovering and Gabe Pereira was a Google deep mind researcher. They were roommates together. They started this company because they thought legal deserved a better solution. Harvey, people seem to have like a love, hate thing with Harvey, probably because it's the $8 billion gorilla in the room. But it operated very stealthily for a lot.

long time. It had an approach where if we can convince the most powerful law firms to get on our platform, the others will fall in line. So they did, you know, they were very heads down. They did these pilots, years-long pilots. I mean, one of the things that people, I think, don't appreciate about legal tech is they're, about law firms, is that their procurement process can be like 12 to 18 months. They're just so... I would hate to sell anything to them. Oh, yeah. And I think those timelines are shortening, but, but anyway, Harvey succeeded. I mean, it partnered really closely with those law firms. They were co-development partners when it got their buy-in. Other firms followed suit. Now, 50 of the 100 highest grossing law firms in the United States are on their

platform. Harvey arguably, you know, fired the starting pistol on this legal tech arms race, and then it invited a tsunami of competition. So now it kind of has to defend the turf that it helped create. LaGora is one of the top companies in this space. It's founded by Max Junstrand, who was actually a professional video gamer and spent a couple of years in law. And it was a Swedish legal tech company and they came to the U.S. this year and started this year as kind of like, you know, Europe's answer to Harvey and now they're making a lot of ground with Fortune 500s and large law firms internationally. There's just a litany of competitors in their wake that are tackling either the AI platform or a point solution around it. Part of the challenge

is that with this surge of competition is also a surge of sameness. These companies are building on slightly different combinations of the same foundation models. They are all building at the application layer, but there is no real technical moat. So they need to, you know, went over the law firms with their white glove service and their, you know, shipping speed the way that they help train lawyers because a shiny tool doesn't stick unless you really get the client to engage with it, the customer to engage with it. There is no technical moat. And so these firms have to compete on brand. They have to compete on their ability to kind of mold to the client. and deliver product that feels almost white labeled for them.

And all of these things take capital. Harvey has the most of that. It was really quick to establish brand. I think next year we're going to see a lot more activity in the legal tech companies that are providing services directly. That's going to be a more popular model next year, directly to customers or to consumers. And I think we're going to see consolidation as well. Okay. So let me ask you one last question here. When it comes to this tech, there could be an

argument made that like they are just wrappers on chat chip PT and why wouldn't a law firm, you know, eventually just like buy a private version of or a closed off version of chat chp t, eventually chat GPT will get access, you know, maybe we'll pay for it. We'll get access to all these legal cases and it will get better at serving the enterprise. And so I wonder if you think the wrapper question that has been applied to so many startups will also apply to legal startups as well. I think the law firm is such a discerning client that they're willing to pay the premium for the packaging. And it goes beyond packaging because it's not just, a white-labeled chat chabit. It's in the permissions settings that they give them. It's in the

partnerships with those digital law libraries like Lexus and Westlaw. They are selling, you know, a bespoke product with lawyers in mind, lawyers paranoia's and and their real security and compliance risks top of mind. Winston Weinberg, the CEO of Harvey, has actually said open AI is indirectly our biggest competitor, which is shocking because they're platformed on open AI and open AI is on their cap table. But he says that every law firm we talk to is going to compare our product against the latest model ship from chat to PT. So ship from open AI. So I think that they will have an uphill battle, but I think that the law firms ultimately will continue to buy something that feels best in class and built for them. All right. I said last question.

I actually have one last one, big picture. Just look forward in the next couple of years. How do you think that legal field is going to change as this stuff picks up more? Again, we're at three years of chat GPT, right? So this is really just beginning and it seems to have already made a very big impact within the legal field. Where is it going to go? I think we will see the billable hour increase as opposed to completely disappear. I think lawyers are going to charge higher and higher premiums for their eyeballs on work and their mind share. And they're going to switch other services to flat fee billing. I think we're going to see more lawyer's splinter off from big law and start their own solo shops or join tech companies as there's

never been more opportunities for them to do so. I don't know how to answer the question on what happens with, you know, an increase in more frivolous lawsuits. And I'd encourage companies that think they have an answer to that to come find me. But ultimately, I think, I think, legal is a precursor to AI swallowing professional services as an industry and it's a bumpy road. But, you know, lawyers do their homework. And I think that they'll net out looking pretty smart for doing so. Yeah, I've had my eyes opened to how impactful generative AI will be in the legal field already is in the legal field. And to me, that's the reason why I wanted to do this show with someone who's impartial to talk through all the, you know, the pluses and minuses of this. Because I think that if what we imagine will happen, the legal field does happen, and we've said it before on the episode, it will cascade and we'll see it in many other professional services disciplines.

And so I think this is, you know, kind of canary in the coal mine territory. And I'm so glad we spoke about it. So, Malia, can you tell people where they could find your work? Oh, sure. Businessinsider.com, and I'm on LinkedIn. I don't know quite your following, but I'm working on it. Oh, yeah, you have a good following. I take.

All right. Well, Malia, thank you so much for coming on. Thanks, Alex. All right, everybody. Thank you for listening and watching. We'll see you next time on Big Technology Podcast. At Fandual Casino, you get even more ways to play. Dive into new and exciting games and all of your favorite casino classics, like slots, table games and arcade games.

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