Odd Lots - What AI Is Already Doing to the Legal Industry

Episode Date: July 17, 2025

If there's one thing that lawyers do a lot of, it's spending a prodigious number of hours going through documents. And they're often very well compensated for this work. So if there's one area where AI can obviously be highly disruptive, it's law. Documents that used to take hours to scan or format might be dealt with instantly. Finding relevant prior case law is becoming much faster, thanks to today's most advanced models. On this episode, we speak with Joel Wertheimer of Wertheimer Fleder LLP, a civil rights law firm in New York. We discuss the actual economics of being a lawyer, how it's changing, the effect that the technology will have on the distribution of income going forward, and what the entire profession could look like years into the future.Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

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Soutenue by Santee Canada. Bloomberg Audio Studios. Podcasts Radio News. Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthal. And I'm Tracy Allaway. Tracy, I was at my cousin's wedding this weekend, and I have a lot of lawyers in my family.

And every time I... Yeah, in my extended family, a lot of lawyers in there. And I'm always asking them, like, what they do and stuff. Within like five seconds, though, of any conversation. I'm like, tell me about trials and like techniques like swayed the jury and etc. The stuff I see on TV. I am aware, though, that that is actually not that big of a part of many lawyers like day

to day. Well, I have a lawyer in my family too. An ex-law, my husband, who did big law, big corporate law, absolutely hated it and got out of it, luckily. And so I have a feeling in this particular episode, I'm just going to ask a lot of work-life balance questions based on my own experience, my husband's experience. Yeah. But it is a huge industry.

And it's one of those industries that I think all financial journalism actually doesn't do a good job of covering along with accounting. So we should talk about it. We definitely should talk about it. We should talk about it way more than we do. Within the AI conversation specifically, you hear a lot about the prospects of this being either like a force multiplier or a labor reducer because my understanding is that a lot of like, especially like junior lawyers, they're up all night. What are they like looking for misplaced

commas? Because those could be a big deal in contracts, right? And so in theory, and again, Tracy, I'm sure you know way more about this than I do. But in theory, that sort of seems like something A. I might be good at. Like, oh, no, if the comma is not here and it's there, then that totally changes the definition of this clause or whatever. There's a famous case involving a comma that did exactly that. So many points to make here. First of all, I am vastly in favor of anything that makes corporate lawyers' lives slightly more efficient and happier. So AI could be useful here. But I also wonder, you know, the lawyer profession, they have things like templates and standard forms and stuff like that. So I also wonder how much of an improvement AI will be here. So I'm excited to talk about

it. You know that, Tracy, when they get the AI tools really in place, they're just going to give them more work. Yeah, that's what I suspect. Yeah, yeah, no one is actually going to be. By the way, I have a lot of stories of like partners calling from their fishing boats on the weekend, demanding that junior lawyers go into the office and like fix a comma and things like that. All right. Well, I'm really excited to say we do have the perfect guest. Someone that I've known for a very long time, someone who just knows about a lot of stuff, someone who is a lawyer.

We're going to be speaking with Joel Wertheimer. He's currently at Wertheimer Flater LLP, a civil rights. firm here in New York City. He is previously at the White House. He's done big law in the past. He knows a lot about a lot of stuff. He knows a lot about poker. He knows a lot about AI. Someone I think we could just talk to about anything. He knows a lot about elections. He just sort of knows everything. Joel, thank you so much for coming on odd lots. Thrill to have you here. Thank you for having me. Why do you real quickly tell us who you are, what do you do? Why are we talking to you?

I run my own civil rights law firm. I just partnered up. We sue the government mostly for violations of civil rights. Sometimes that's false arrest or wrongful convictions. Sometimes that's wrongful removals of kids in, let's say, child services for a shaken baby that was a false accusation, that sort of thing. And we try to get people compensation for the wrongs of their constitutional rights. That's about 80% of what we do. Personal question. Are civil slash criminal lawyers, are they happier than corporate lawyers?

I would say on average, sure, but the distribution is probably pretty wide for each. Look, I do think on the nice thing on the plaintiff side, and it's like I'm my own boss, I get to determine how much I work, and each extra case is just more money or less money if I decide not to take it. And so I can sort of set my own work-life balance when I do that. And it's constantly a decision of sort of what's the expected value of a case, and is it worth it to me in terms of the hours I have to put in. So let's talk about when you're at big law.

And, you know, I joked that, you know, people, they're up at 1 a.m. and they're looking at commas. I know that's a little bit of an exaggeration. No, it's not. It really isn't. Yeah, I guess it's not. And I know that lawyers are really obsessed with billable hours. And I think they even, like, measure things in 10-minute increments.

Like, so six-minute increments. If you're a junior associate or you enter a law firm, whatever, what is the modal use of your time? What are you mostly doing when you're close? clocking those six-minute increments. Right. So it's going to, I can only really speak to litigation. Sure. Because corporate, you're, I think, just reviewing contracts and deal points constantly.

For a litigator, a lot of your time is in discovery. And that's true, small law, big law, but you are reviewing documents, synthesizing what they say. Maybe you're trying to do a privilege check and say, okay, this document, we can't turn over. You know, that's changed some actually with machine learning. The predictive coding has shrunk the amount of time that, you know, junior associates are spent doing that. Legal research fights with opposing counsel. You need to give us these documents.

You're saying they're privileged. They're not privileged, that sort of thing. And then there's the smaller section on taking depositions, you know, briefing things to court. So that's a very broad overview of those six-minute increments. And yes, editing and reviewing and looking for hanging commas, you know, hanging headers. That was always the bane of my existence was forgetting that there was a hanging header and getting yelled that for it. That sounds bad. You know, the economics of a big law firm.

It feels like this very big pyramid structure, which I think is replicated in many industries around the world, probably in finance to some extent. And then I think even academia to some extent. But talk to us a little bit about like how that value accrues to the entire firm and the partners and the distribution. of the fees that the clients are paying. Right. So you have what they call leverage in a law firm. So you have equity partners. Some firms have equity partners and income partners

who don't actually own a share of the firm. But the partners are trying to get leverage on the associate. So one partner to say four associate ratio. All of the big law firms basically pay the exact same amount to their associates. This is called the cravath scale. If you can look it up and it'll say a third-year associate makes $250,000 and gets this bonus each year, let's just say for the average associate bills $700 an hour and is expected to bill about 2,000 hours a year. So they're generating $1.4 million for the firm in revenue in terms of billed out.

and they're getting paid, I'd say, with taxes and everything, $500,000. So the partners are making $900,000 for every extra associate. So if you have a 4-to-1 leverage, 900,000, profits per partner, 3.6 million. And that's how they're trying to think of it. And the big partners, the rainmakers, are the ones who can generate enough work to support those associates. And if you can't support those associates, your leverage goes down, your profits go down, your profits go down, you might have to lay people off, that sort of thing.

It's nice to be a partner at Big Law. But on that note, so my understanding, at least in corporate law, is that it is harder to make partner nowadays than it used to be. And this is part of the reason why it's a miserable experience, because it used to be in the past, you know, you work really, really hard, basically give up your life for like two decades or whatever. And then you get rewarded with a huge salary and you don't have to do as much of the grunt work.

your job is basically sourcing deals and making the intros and stuff like that. Do you get that impression as well on your side? I definitely see from the outside that it seems harder to make partner. I think that's led to people, more people leaving earlier to do their own firms. I think it's easier than ever to start your own firm. Why is that? I mean, for one, I mean, for me, for example, I didn't need an office when I started. I started in January of 2021.

I had a desk at a, you know, at another law firm. that collected mail. I think the number of services are just easier to access, even things like, you know, now if you really wanted to like, you could start with a cheaper legal research service than Westlaw, things like that. I think, and you've seen it in the business creation numbers. I think you see a lot of professional services, you know, splitting off from firms. But I definitely think it's harder to make partner. They have had that they've added this income partner level. So you make partner, but you're not an equity member of the firm. Consolation Prize.

That's right. And you get to shop the title, I think, is the other reason. So let's say you want to go in-house somewhere. Now you're a partner at this firm, and you can say you're a partner at the firm, even if you haven't bought in. But I think that structure has been around longer. Honestly, it feels like the same thing it's in academia. It's harder to get 10 years now.

It's just the ladder's getting pulled up, I guess, in the sort of industry. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline.

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Would anyone go into a big law firm if they knew in advance that they wouldn't make partner? Like the angel of the future comes to them in a dream and says, you know what, you're not going to make partner. Would that still be worthwhile? Or is the prospect, even if it's declining of making partners? is that crucial towards that decision? If you knew an advantage, you weren't going to make it. Would anyone make that decision?

So they do have staff attorneys at big law firms that are people who are not on partner track. Okay. And those are fine careers? And they're fine careers. I think people, you know, but they also have less expectation of how much they're going to work.

You typically wouldn't do it. And the reason they have this up or out sort of system at the big law firms is because the prospect of being partner drives you to bill 2,0,2,500 hours, how many it is. You're showing how hard to you're at the end of the tunnel, right? That's right. So, you know, I think, look, the training is really good. The cases are really interesting. Like, I actually quite enjoyed some of it. But that pressure to to bill and work is, you probably wouldn't want that. When you say training, like, you know,

I don't, like, what's the deal like in law school? You don't even learn about any of the things you actually do as a lawyer. You certainly learn, you know, how to think about the law, but you're not learning in the, and you have a legal learning class. Because I think this is actually important for the AI component of like, okay, what is, how do you actually learn to be a lawyer? If you don't really do it in law school and then, you know, AI is going to take over more and more of these functions. Like the process, where do you learn, right? So what is the learning?

So here's an example. You don't learn how to have a. a dispute about discovery in law school. You know, I sent out discovery demands. You owe me documents, right? In the American system of law, somebody, you get, you end up in a lawsuit, and each side is obligated to exchange documents with each other. And you send out demands, and you ask for a certain category of documents, and they

come back and say, we're not going to give them to you. That request was overly burdensome, or they're not relevant. Or they say they lost them. Or they say they lost them. and you have to have a fight about getting the documents. What keywords did you search? Who did you collect documents from? All of those sorts of things.

And how to have that dispute, how to make the request so you don't get the denial, those sorts of things, and what the writing looks like and feels like. You just don't get in law school. You just the, and even writing a brief and what's a persuasive brief, the edits, those sorts of things. You learn how to do legal writing, but it's just you can. can't do it until you're doing it. Got it.

Okay, so on that note, I mean, AI seems possibly most at home replicating the work done by, say, a mildly competent, maybe not too tired junior associate. And historically, you do that work for many years and you build foundational skills of being a lawyer, like attention to detail and issue spotting and I guess risk triage and that sort of thing. If those tasks, those formational tasks, are now outsourced to AI, what do you see as the impact on junior lawyers? It's a great question. I think it's going to be hard for junior lawyers at big law firms to get their, sort of that training. On the other hand, it may just be that they are doing more work. And so on the same things, but more efficiently, maybe they're now going to have more fights of. documents and less time spending reviewing the documents. Maybe they can increase the volume of things they demand, that sort of thing.

I certainly think that the leverage model and the build hour model is gonna run into some difficulty. It'll also make their lives easier just in terms of, as an example, you get discovery requests. I talk about discovery a lot because it's truly a lot of the work of being a lawyer, but they come, you know, the other side will send a PDF with a bunch of demands and then you've got to respond to the demands and even just the

moment where you have to convert the PDF into a word document and start editing the work word document is like the true bane of my existence and i've actually started using this AI program which it's called briefpoint AI and and they it's also very templated right so you're constantly trying to find templates hey other associated in this law firm can you send me you know a previous document now. They have, you know, 80 different objections that you're used to making and they convert them and it's a lot more point and click. And of course, you have to know what you're doing when you're, you know, that these objections

are valid. But just the document formatting and getting it through, you know, to look good and not have to fight with Microsoft Word for three hours is really valuable. I realize I should have asked this earlier, but when we say AI, what does that actually entail in the legal field? Because as you point out, I mean, templates, standard forms, those sort of things have been around forever. And a lot of law firms already use template software to quickly duplicate work or make document packages or whatever. So when we talk about AI in law, what exactly would that be? I think it can be a lot of things.

One, it can be making that template process a lot faster. and, you know, that will free up labor time for sure. The, you know, chat GPT's O3 pro is doing legal research now that is quite excellent. This is really important. People who think that O3 is dumb or is a hallucination machine are not, or that chat GPT has have not used O3. That's my view. And, you know, there's this professor at Georgetown, I think its name is Danny Wilf Townson,

who's just sort of every time a new model has been coming out, has been running sort of exam questions that he gives to his students. I think it's in his federal courts class about, you know, how they do on each of these questions. And when 03 came out, not even O3 Pro, when O3 came out, it was, it answered them all, some of them excellently, and even got what he,

it's called an issue spotter question. So it wasn't on the face of the question. it was an appellate jurisdiction question. If you really were thinking hard about it as a student, you would have noticed this issue that he wasn't asking about explicitly, but there might not have been jurisdiction to even bring the appeal that he prompted you about. And 03 caught that. And when I've used it, you know, you hear a lot of these cases.

Lawyers getting sanctioned because they're, you know, submitting things with hallucinated cases. There's some funny examples of that. They're amazing. And the thing I think to myself is you would never, submit as a partner at a law firm, you'd never submit whatever the junior associate just turned over to you. Sometimes they didn't understand the case exactly right. And so that's the job, is checking the cases, shepherding is the, I think the Lexus term for it, and making sure

the cases stand for what they say, that there's still valid precedent. That's the job of being a lawyer. And now I can rely on 03 to start some of the research for me, even just to point me to the cases and it's citing to the cases. And this is without access to Bloomberg law or Thompson Reuters or anything like that. I assume it's coming. And once it's going to be integrated with those databases of cases, right now it's just trawling the internet. I think it's going to do a fantastic job. And you spend so much time as a lawyer, as a litigator, thinking of the Boolean search terms for Lexus, the and or these sorts of things. And you don't know the exact term that's going to come up in the case, you know, what the, all of the precedent use

this term. And not having to think about that, I can run it in the background as I'm doing another task. And for 20 minutes and something comes back from 03, it's got the five cases that I need to dig in and find the right, you know, language to then go on Lexus and then to chase it down. I've been using 03 more for just sort of my own, like, intellectual questions from time Your own lawsuits? No, I haven't done any, I haven't started any lawsuits yet. But this is really the way that I've been using it, which is that it's a fantastic tool for just like discovering the existing research that's out there. I was looking at something.

I was curious about like trade barriers within China between provinces, you know, something like that. There is a lot of research that's been done on the question of like, okay, if each of these provinces has some motivation to promote their champions, is there any. tension. There's something I would have, it found all of this, all, it had the links to the academic research that's been about it. It had summaries of them. The summaries may have been wrong, but I'm not in the, I'm not going to like copy and paste summaries and present it as my work. I can click on it. Most of the time, it is, they are pretty correct. It's, so what you say in terms of like, just even like being able to find the relevant case law, et cetera, seems extremely powerful and time saving. It's truly

been life-changing for me. Wow. And I like doing legal research. I like getting into the cases, but just, you know, if there's a new issue and you just don't know where to start, you know, that it was always, I think, for a junior associate, where do I start? And I think it will make their life easier in that regard,

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that actually mean for billable hours? Because of course, the whole business model seems to rely on eking out as much work, as many billable hours as possible, right? And that includes grunt work, which theoretically could be done by AI now. And I'm not sure big law or any law is going to be necessarily incentivized to use AI if it means a reduction in billable hours. I suppose they could make it up in volume. Maybe that's the idea. They could. can take on more cases. But is that the expectation? They might be able to make it up in volume. I do think things like they call them, you know, alternate fee arrangements are going to become more popular. We get a flat fee of, let's say, $5 million to do this deal for you or something like that.

And then you're incentivized to do it in the fewest hours possible. That's right. Keep going. So that's one possibility that the model just changes, the billable hour. It stops being the model. The other thing is, you know, the way it works right now is, it's been a while for me. So, you know, the big partners, let's say they're billing out at $2,000 an hour or $1,500 an hour. And the associates are $700 an hour. I think in a lot of ways, what the client is paying for is really like $5,000 an hour for the partner and 400 or 300 for the associate. But it just gets billed out differently.

and I think one thing is that partners might just accrue a lot more of the value with fewer associates. They still have the build hours. They're just a lot more efficient. And, you know, in particular, I think for general councils who are hiring at the big law firms, they're hiring for safety. You know, nobody ever got fired for hiring Krivath. It's sort of like a way to think about this or a big law firm. If something goes wrong, you want to have hired the best lawyer you could. and say to your board or your CEO, look, I hired a great law firm and they just missed it.

But look, everybody agrees this is a great law firm, which is all to just say that I think one possibility here is the build hour remains, but all the value accrues to the top top lawyers. I mean, that seems like it will have implications. We should talk about that further. Something I have done is I'll take episodes, transcripts of odd lots. and afterwards, I'll do a little self-criticism session, where I'll like say like, where could we have pressed this? Where were the weaknesses in the guest's answer? Where should we have pressed further and harder? What were some of the logical flaws?

What would you have done differently, et cetera? And sometimes I've found that to be useful. Have you been able to use AI for essentially like building better arguments or finding weaknesses in an argument or anything like that yet? I haven't done that yet. I'm sure I will. I have used it for taking audio and making it into transcripts. I mean, that's just like a foundational thing for me. A prison will produce an audio of a hearing or something like that.

And I need the transcript and I need to like just read it instead of listening to it for 40 minutes. But self-criticism. But it also, it does sound like you mentioned the issue spotter question. Like actually being able to identify real legal questions. Not just identify precedent. Yeah, not just identify precedent. but actually logical sequences or where, like, it sounds like that's where you're getting at. I'm sure it is coming. And I think as I, you know, get, as the models get better and I have to

produce a brief and maybe I can start running it through. Of course, lawyers all have huge confidentiality concerns with everything they do. So I'm very careful about what I'm putting into GPT, you know. And I've got to run your own deep seek instance. I think that that's right. And I think the big law firms are having sort of servers on site with their own models, but those models aren't as good as 03 yet. And so I think as you can start to have great models in-house on your own servers, that's going to really be the thing that launches it. I can't do that because it's just me and I'm not going to host a server farm. But I do know the new Apple chips on these very nice, they can run things like Lama very well. And so it's coming.

But I think for the top models, I'm sort of reluctant to put everything up there. That makes sense. This is exactly what I was going to ask next, which is how do clients feel about AI in the legal industry? Because I imagine, you know, nobody ever got fired for hiring Kravath, as you mentioned, or some other magic circle law firm. But on the other hand, if Kravath is now using AI, I imagine on the client's side, maybe there's some concern over having their material. contracts or employee data or financing documents or whatever getting uploaded to offsite servers. And then there's also the question of what if AI just makes a mistake, although as you pointed out, no partner would ever submit something done by a junior associate without actually reviewing it

first. So maybe that's not as much of an issue. But are there any qualms, I guess, coming from the client side that you see? So I can't speak to. the big law as much anymore. And it's very different, I think, on my side. And I think, you know, my clients are, their qualms are much sort of bigger in terms of privacy and much more, you know, focused on the government and are wanting to get just the best representation they can. So, but for example, I'm getting medical records from my clients a lot. That's a lot of the job of a plaintiff's side lawyer is documenting injuries, things like that. And they're certainly concerned about their medical privacy. And so I can't, you know, use AI yet to take the medical records and condense

them into, you know, the quick summaries. But those programs, I'm sure, are coming where, you know, there's privacy and security and all of the things. They probably exist already. I'm just not using them yet to make that part feasible. I am sure that, you know, if you are Goldman Sachs and you hire a big law firm and they've been doing your deals or your IPOs, such as they exist right now, and you don't want the law firm training on your documents to go use them in other deals. I'm sure this is an issue. On the other hand, you know, it might reduce your legal costs by half and you can fight about that.

And so, you know, what they're willing to do, I don't know. Let's extend forth some of these economic questions because allowing the senior partners to accrue more value by not needing to allocate as many hours to the junior lawyers. That makes total sense for this specific generation, right? Because, okay, some people are lucky enough to have made partner before AI and then other people are going to be in this situation, which their value maybe could be done more cheaply or for a few hours. But 10 years from now, whatever, a lot of those partners are going to be retired, et cetera. Like, what is the downstream consequence of your view, view of some of these shifts that happen right now because, you know, eventually all the

partners, you know, eventually everyone's going to die and there's going to be, like, where does this go? Like, what's the next, what are the consequences? So I think that the skills that will be valued in lawyers are just going to change a lot. The interpersonal skills of client management, walking your client through the risks that they have, they're nervous, they're getting sued, these are the company litigations, the lawyers who can make them feel safe and let them understand what's happening to them and what their odds are, those sorts of things, the lawyers who are great at taking depositions and the lawyers who are great at oral argument, those skills are going to go up and up, I think, in value, and the skill of legal research or just being great at writing a brief,

I do think that that's going to get, maybe not the 99th percentile brief writing, the people who are going to the Supreme Court and who are just truly excellent, maybe that will take time. But the sort of grunt work, you know, solid junior associate, mid-level associate, senior associate who are writing the briefs, that I question whether that skill will have the same value. But there's a lot of interpersonal skill that matters a lot for being a lawyer, and that's going to go up in value. Now, the question with any new technology is, does it, because one argument is clear, okay, there's an X amount of demand for legal services, and there's an X amount of people who supply them, and maybe you save some money. Could the market for legal services grow such that if capacity to do legal research and some of this other stuff gets cheaper, that there are more areas that's like, oh, you know what?

Maybe this is worth filing a lawsuit over. This was actually going to be my question as well, but particularly for poor plaintiffs who normally can't afford a lawyer. What did they call them in indigent? And they sometimes will file pro se in their own behalf. Or maybe more lawyers like you take on cases, take other cases that five years ago the economics wouldn't have made sense. But today the economics made sense. Like could it just be, you know, Jevind's paradox, but for law? I think that's absolutely going to happen.

You know, I can just sort of walk through the economics one of my cases. You know, somebody comes in and they say they had a false arrest case against the NYPD and they spent, let's say, five hours in. custody. We sort of know what the expected value of that case is. You know, you're doing, what chance do you have to win and what are the damages you are going to get when you win? And I can sort of, and then I, a contingency fee, typically a third in New York. And you can sort of do that math of the expected value of the case and then think about how many hours it's going to take to win that case or get to a settlement. And if I'm using AI to make myself more productive in my research, the number of hours that I'm expecting to put into that case goes down.

Suddenly, my hurdle rate for, you know, what it takes to take on that case has gone down, and I can take on more cases for the same number of hours. And so that I definitely think is coming. It's also the case that, right, and because of that, because lawyers have to think in that term of, you know, how much is it going to cost me to do this case in terms of labor, there are a lot of cases brought pro se in the court system right now, I think it's like 20, 25% of cases are from pro se litigants. These are the people who represent themselves because they can't afford a lawyer or, you know, my cases are contingency, people aren't paying out of pocket. But so I can't afford to take on the case because the damages aren't potentially high enough. That's how I have to sort of think about it.

And so I think there's going to be a lot more representation of those people. It's also the case probably that pro se lawyers are going to start getting better. that, you know, you said you were doing research on your own, you know, with 03, it's possible that, you know, if it was just a little dispute with somebody over some amount of money, you might think I can do this myself rather than trying to go find a lawyer. And so, you know, but for legal aid, for people who are criminal defense attorneys at legal aid, those attorneys, I think, are about to go on because of how overworked they are and underpaid they are, they might get a lot more efficient and be able to represent a lot more

people. Tracy, I'm imagining a lot of very annoyed judges by like pro se. Frivolous lawsuits. No, I mean, like someone who did their own research, because nothing's more annoying than someone who does their own research. And then they're like, they're like citing all these cases that they learned about yesterday and stuff like that. Like it just seems like you have a high potential for obnoxious, obnoxious people who think they know everything. No, no, no. You're democratizing case law. That's what I say. I want to be clear. They're already getting that. The judges are getting a lot it, especially pro se prisoners who get to spend a lot of time in the legal library and are filing cases. And some of them are excellent. But sometimes they're not so good. I clerk for a federal

judge and we saw a lot of this litigation. A lot of it pro se. I don't know that they're, you know, providing AI access in prisons, unfortunately, in terms of litigation. But I think, I actually think there are going to be a lot of annoyed judges because this is going to happen. It also might be the case that it raises the floor of, you see a lot of bad legal writing, even from lawyers, and I could see it getting, it actually getting a little bit easier to be a judge and a clerk. If everything becomes more volume-oriented, or the business model becomes more about the volume rather than the billable hours, do you see a situation where, I guess, the emphasis on sourcing deals in corporate law or sourcing cases in plaintiff,

Does that become more important? Like, that's the skill set that you actually need, that sort of like matchmaker process? I think that there's, yes, I think, like, finding the deals, making the economics of the, of the relationship work is going to go up a lot in value. You know, I think it's already the case. You all see legal advertisements for personal injury lawyers everywhere all the time. Pain law, yo. It's, so, I mean, legal search terms on Google. are the most expensive cost per click.

I mean, these thousands of dollars for cost per click. Case acquisition, I think, might go up even more because if you can just get the case in and you're still working less on the case, but you're still getting your third contingency fee, you might be willing to pay even more and more to just generate this volume. I mean, already mills exist, they call them plaintiffs' mills,

people who are doing 600 cases per every couple of attorneys. or something like that, the economics of that and just acquiring the case are going to go, I think, way, way up until maybe they start competing on price because they can do so much more volume. I want to talk about advertising. Tracy or Joel, have either of you heard the radio ads for Top Dog Law? Yes. I have not.

Every listener go to YouTube and just type Top Dog Law ad. They're the most incredible. Aren't they, Joel? Like, they're really incredible. Yes. Just go search right now or when the episode is, and listen to some of these. And do you buy ads on Google? I've done some Google ad campaigns.

I haven't really... Is this actually another topic we're interested in? But a lot of, I mean, a lot of plaintiff's side civil rights lawyers are buying space. It's just not how I've chosen to compete. I do more referrals from defense lawyers, that sort of thing. But, I mean, I actually have started to think about, right? We know this stuff about young people are starting to use chat GPT. and other services as their sort of portal to the internet.

They're using it for search. And so, right, all of these law firms spend a lot on SEO. But what is SEO in a generative AI world is sort of an interesting question? What are people, what are the engines turning up in terms of search terms? What do you have to have on your website in order to get people to find you through GBT rather than Google? Is Lexus Nexus doing anything with AI? They are.

I have not really used their AI. products, Lexus, and I know Westlaw is doing the same. I use Lexus. I assume Bloomberg Law, which is also is doing something similar. But right now, the models that they're using just aren't as good as O3. It's basically, and so if you're still calling to a four-era GPT or similar from Cloud or whatever, that sort of quality, I just don't think that they're getting good enough research. I think it really was, whatever that step change was to O3's level, I think has made the research so much better that I just use it and then I'll go look at all the cases on Lexus. The difference in what you can actually learn from 400 or whatever, 4.0 or whatever, the naming convention. For those O3, it really is a very big deal.

And I think, like, a lot of people formed impressions pre-O3 impressions. What other tools are out there that are interesting or that come across? across your world, whether it's like, I mean, yeah, we've been talking a lot about 03 and you mentioned that other one, brief, something. Is there anything else out there that's exciting or interesting or promising? There's one I looked at that looks promising. It's like ecutis or IQ IDIS, something like that. And they looked pretty interesting in terms of sort of being full suite and wraparound. There's Harvey AI, but they're really focused on big law firms, but I know that they're working with a lot of big firms. But, you know, technology,

you know, for me that looks promising would be people where I can safely upload medical records and get, instead of trawling through 200, 300 pages, just like, what was each progress note? What did it say? What's the injury? That sort of thing. And I think that's coming. There are, I think it's, maybe something from case tax that summarizes depositions. And of course, that's another thing where I've tried to use it in the past and it wasn't very good. I think just the context windows that they were able to use haven't been, sufficiently large, but I think with with rag and with better models, I think that will get better and better. You know, like the, this is, the Ben Thompson line of this is the worst they're ever going to be

is something that I'm constantly trying to think about because I've used these products in the past or tested them and they haven't been very impressive, but I also used 4-0 and wasn't very impressed that it's legal research and have seen that jump. And so I assume in terms of taking depositions and getting concise summaries of the most important facts for your case, that's going to get a lot better. I just think the products aren't there yet. And maybe because the API calls for the LLMs just aren't to their newest models yet or it's too expensive.

But I assume that's getting cheaper every, you know, Moore's Law still applies. If you had to bet, if you had to put actual money on this question, would you say there will be more or less lawyers, say, 10 years from now? as a percentage of the population. Yeah. That's a great question. Thank you for the caveat, show. That's important.

And I hadn't thought about this one. I would bet on fewer, but not that much. I would say, I don't think this is going to wipe out lawyers. I think fewer and what they do will change a lot. Could you imagine, you know, tech people are obsessed with the mythical who will be the first person to have a billion dollar startup with no employees? Could that be like, okay, you have, you hung a shingle out, I think is a phrase that sometimes people use. Could you imagine a mega firm with one employee?

I could imagine. A mega lawyer with, you know, so you, right, you think of Salino and Barnes, those sorts of firms, these big, big plaintiff's law firms. I think they, that I actually don't know, but it's a lot and it's all across the country, but so much of what they do is make the discovery demand, respond to the demands, do the, get the medical records, send out a settlement demand letter, negotiate with the opposing counsel or the carrier from the insurer, you know, my client has a torn rotator cuff and a torn meniscus or something like that from this car accident, and they have an exact, expected value

of the case. And it's just negotiating that. And I think they could go from let's say 100 cases per attorney to 1,000 or to 2,000 because they could set up an automated workflow a lot easier. And so, you know, that person could start making 50 million or 100 million a year per one lawyer than the, you know, already 5 million that they're making or something like that, these top firms. One last little question. I mentioned you're a poker player. In poker, you know, big thing has been the emergence of solvers and you go back and you like, look at the head.

did you play it very well? But it's all about what you, kind of what you described of like, calculate your EV right, and did you play it right? And you don't always win, and you may have calculated EV right. And you took on the case, but you don't get the outcome. How scientific is that, the calculating EV on a given case? And is there a technology that's working on that? So it's not very scientific at all.

You know, it's, you can assess liability, I think, pretty reasonably. is this going to be something where we're definitely going to win, you know, personal injury, car accident lawyers. You say, you know, the police report says this person made an illegal left turn. Perfect liability. I'm going to win instantly. And then you're just evaluating the damages. One thing I've actually explored is looking into whether LLMs can estimate the damages based on the injuries that you describe pretty well. Go through the case law where there's cases. This is called remittator cases where you, you might hear like, oh, this person got $100 million for their hot coffee or whatever, you know, these sort of classic cases. And a judge will knock it down. They'll say this case with this injury is only worth this much. But you could take all that language and start to estimate,

you know, quantify, because words are numbers with these programs. You could start to quantify what are the injuries worth in the case law and then multiply that by. So I think that sort of thing is going to get a lot more scientific, and they're going to use it on the carrier side. So Geico is going to be able to say, you know, you've described these injuries. We have a database of a thousand cases just like this, and this was what we, you know,

and then you could haggle, oh, well, this is a great plaintiff or something like that, and they're super sympathetic and, you know, have that negotiation. But I think that process of evaluating the exact value of an injury or of a case is going to get a lot more, scientific and facilitate settlements to happen quicker. I imagine AI might be especially useful in class action lawsuits as well, where you're dealing with, like, finding thousands of people potentially to attach to a case and then actually

contacting them and getting information from them. That seems reasonable to me. Also, in the class action cases, you just got a volume of data that you have to do discovery on, but it hadn't occurred to me. But, you know, I do know that sometimes class actions start because somebody finds a Reddit thread. And they see on Reddit, you know, people are all complaining about this same issue with this product or something like that. And the lawyers, you know, reach out to them. And so it is entirely plausible. I could, I could see that. That's another thing where you could have

AI just trawling the internet for possible cases. I think so. Or, you know, what are people posting about on Twitter? What are they all getting harmed by? I don't know. So it seems entirely possible. Since you mentioned it, I just want to say you mentioned illegal lefts and Tracy and listeners. I had a issue last year where I'm not going to get into it, but it involved taking an illegal left turn. Joe's a criminal. I'm not. Were you found innocent? I am not a criminal thanks to a referral that our guest here, Joel helped make for me. I'm not going to say, we're not going to talk any more about the case. super annoying. I'm not going to say anything more, but I just want to, it's my disclosure for this

episode. So Joel Wertheimer, thank you so much for coming on, OddLust. That was fantastic. Thank you for having me. Tracy, before we talk about conclusions, I must press upon listeners again to search for Top Dog Law firm ads. In fact, after we do this episode, we walk back to our desk, Tracy, I'm going to insist that you watch a few of them. I love that your priority for this episode. The one thing you must get out of this episode is listening to Top Dog ads. I swear, I was driving. I was in an Uber home several months ago, and this ad came on the radio and there's like nothing I had ever heard in my entire life. Nothing will prepare you for this law firm's ad. Anyway, we can talk about this. I am very intrigued. All right. Well, that was a fantastic conversation. Yeah. One thing I am wondering is, you know, in the U.S., there's a lot of talk about an overly litigious society. And I kind of wonder if AI is potentially just going to make it worse. It sounds very plausible to me.

that it will make it worse or better or worse. But I think like, you know, it does, my guess is that there's going to be some sort of, you know, Jevon's paradox thing where like some existing labor will get really cheap or maybe completely unnecessary. And then other, you know, the optimistic version is that defendants or people without a lot of money get better quality representation. I get, you know, it feels like it's not going to, it's going to probably have very big distributional and qualitative shifts. the industry. Yeah, and this is the thing I'm also wondering. So, okay, junior associates, maybe they're doing less work, maybe they're slightly happier, but I guess the idea that more of the value just accrues to the partners at a time when it's harder to become partner,

that seems to be the downside if you're going into the legal profession, right? No, totally. Like, it feels like we're at this moment, and this applies to a lot of actually AI economics questions, and we should definitely do more on them, where people imagine or people maybe even rightly surmise that, you know, there will be a lot of benefits for, you know, existing holders of wealth or companies can do layoffs, right? And I don't know the degree to that, which is really happening, but at least in theory, and there's going to be firing of junior workers, et cetera. But that's like a temporary condition because, you know, first of all, like, okay, a company saves a bunch of money by firing what eventually becomes characterized as grunt work.

Well, what do they spend that money on, right? Because that's savings. And so do they invested? Does that turn into consumption for the partners? Like there are a lot of, you know, people are like, oh, it's going to be mass layoffs. But I never find these questions really satisfying because the money doesn't disappear. It's someone's savings. And someone's savings either become someone's consumption or someone's investment.

And anyone's consumption or investment becomes someone else's income. So therefore, you know, thinking through. some of these next level things, I think is really important. And AI clearly seems like ground zero. And I do think O3 is really good. And everyone, no, seriously, everyone needs to check it out and, like, update their views if they haven't yet on the quality of the research you can do. It does sound like it's maybe solved the hallucination problem that was, that everyone was making fun of earlier. Yeah, I mean, like, they're still there for sure. But because you can actually find links to documents and stuff like that, the speed with which you can get up to speed on anything,

is very impressive. All right, I'm going to go test it. Shall we leave it there? Let's leave it there. This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Allaway.

And I'm Jill Wisenthall. You can follow me at the stalwart. Follow our guest on Blue Sky. Jill Wertheimer. He's at Worthwhile. Follow our producers, Carmen Rodriguez, at Carmen Armid.

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