Don’t believe what you read. AI is going to eliminate legal jobs–maybe yours

We talk to Brad Blickstein about how artificial intelligence legal software will affect in-house departments, and the evolution of in-house work.

Legal departments aren’t immune to fads. General counsel look at what other legal departments are doing, and they talk to their counterparts at conferences. They often come away from these conversations with new ways to do their work. The latest fad, if you can call it that, is artificial intelligence software. The thinking in public is, put machines to work and free the lawyers to do higher-level work.

We spoke to Brad Blickstein, the principal of The Blickstein Group, about artificial intelligence and legal departments. Blickstein is a longtime consultant for in-house legal departments, and his consultancy has just released an exhaustive report on AI and its utility to departments. The report, “Legal AI Efficacy Report,” evaluates the various tools for sale and make recommendations about their use. In his summary, Blickstein writes realistically about the technology’s use, and in the process debunks some myths about how it works and its effect on staffing levels in the profession. When we spoke to Blickstein, we asked him to expand on these thoughts and provide a realistic view of technology and today’s corporate legal department

It seems like what you say in the survey summary is that the term artificial intelligence is ridiculous–that there are lots of different technologies that do different tasks.

I don’t think the term artificial intelligence is ridiculous. If you’re trying to solve business and legal problems, worrying about whether your solution is actually artificial intelligence is unnecessary and counterproductive.

Let’s say you’re a general counsel and you want to be current. You hear about this AI software. Why would you invest in it?

The answer lies in, where is your biggest pain point in your legal department? There are tools that analyze contracts during the negotiation process so that, for example, a contract comes in or your procurement team gets a contract from the people trying to sell you something. They say let’s send this over to legal, and a lot of those contracts look alike. And there are AI tools that help you analyze that contract against your own company’s playbook in order to determine what risk factors are present, whether the contract goes with your compliance policies. And those operations can be done efficiently with AI. Then a lawyer can do at it in two minutes and say this this and this was red-marked, but it’s okay. Go and sign.

Give me an example of another use.

Maybe another legal department would say “Our legal spend is out of hand. How can we analyze what we’re spending it on and how we’re spending and then we can determine how to get more value out of our law firms?” There are artificial intelligence tools that take a deep look at your spend. And, frankly, you can compare it to other company spends, those who are on the same platform.

We divided the world of AI into eight categories. But I would suggest to anyone to start with your pain point, something you might be able to solve with AI. Do that instead of “everyone’s using AI how can we use AI?” That doesn’t make sense.

How long would it take, a company knows what it wants to do, how long would it take to get a smart system up and running?

A pilot, maybe 60 days. A whole law department, six months. It depends on the company and how much tech expertise they have in-house.

I would suggest to anyone to start with your pain point, something you might be able to solve with AI. Do that instead of “everyone’s using AI how can we use AI?” That doesn’t make sense.

What kinds of legal departments did you talk to?

Our approach was different. We actually looked at the tools. We took a deep dive into what I like to call AI-powered legal technologies. The lion’s share of the work was analyzing the tools. I put together an advisory board of 14 folks across legal departments and firms. They run the gamut from newbies to those who are extremely tech savvy.

Legal departments used to be way behind their law firm counterparts. Then they caught up and more. Do you see that kind of advance in what in-house departments can do?

For sure. These tools make far more sense for in-house counsel to use. Look at the contract pre-execution management use case. That works when every contract needs in-house counsel review, when that work used to be kicked back to a firm. But if you build a nice AI-focused system, that work can be done in the department.

Clients may be telling law firms what to do in terms of technology. But what you’re really seeing is clients blocking out the firms altogether.

You say in the report, don’t fool yourselves, there will be a decrease in legal jobs. Will that apply universally, or does it just mean in-house lawyers won’t call on outside firms for the work?

Both places. It will reduce the demand for legal work. Then it becomes the issue of where is the best place to get work done. If you have eight paralegals or young lawyers, and you bring in a tool to do that work, you have to get rid of those people. The same thing at firms. A good example is document reviewers in e-discovery. That used to be the domain of law firm associates. And now those jobs don’t exist anymore. Different ones do.

AI will disrupt that space. Providers of legal services say “we’ll free people up for higher work.” Is there any infinite amount of higher work that clients are willing to pay for? They won’t admit that products are coming.

Clients may be telling law firms what to do in terms of technology. But what you’re really seeing is clients blocking out the firms altogether.

Ten, 11 years ago when the financial crisis hit, that was supposed to be a seismic event, that it would change the client-law firm relationship. What really happened?

One, Big law and Big Corporate are extremely resilient. The ability of Big Law to keep sending bills over the last 50 years is unprecedented. They’re very good at not having to change their business model. What has changed, and what the recession did, was before that corporate counsel could tell CFO types to leave them alone. The CFO would go, you know expenses are getting out of hand. And the GC would say this is complicated stuff. We have to manage the risk. And the CFO would go on his merry way.

Post-recession law departments have to at least try to run their departments as a business. It’s not like they’ll have to bring everything under procurement, but they’re not totally immune any more. They used to have a cloak of immunity before, but now that cloak is frayed. And that’s a big change.

That’s why legal operations is so hot.

Speaking of ops, is there a size a department should be, before hiring an ops person is feasible?

I think it’s pretty small, down to 10 attorneys. If you figure out what they cost and how much they can save with process technology, it’s easy to imagine that a legal ops person can save 10 percent of the legal spend. And if you have $10 million budget, you’re saving a million bucks.

In-house counsel will be looking at work more in a piece-by-piece or function-by-function way and figuring out the best way to get that work done.

What do you see as the main danger that the in-house bar faces these days? Do you see what the futurists are saying about the disaggregation of legal practice?

In-house counsel will be looking at work more in a piece-by-piece or function-by-function way and figuring out the best way to get that work done. In the old days there were two ways to get that work done: do it in-house or send it outside. When times were good they’d hire people in-house and do the work, and when times were and they’d get rid of those people, and the work would go to law firms. That’s what they did in the last three recessions.

Where we heading is this : A GC looks at a piece of work and says, this should be done in-house. This should be done at a law firm. This is ripe for off shore. This is for an alternative legal service provider. This could go to a technology tool. So rather than in-house versus outside, there’s a bigger picture. I hate to use the traffic cop analogy, but everything that the legal function has to do, they’ll have to figure out the best place to get it done. And that’s what the job of the GC is going to look like.

[Editor’s note: You can find a survey summary and purchase it here.]