As A.I. makes law firms more efficient, clients ask: 'Where's my discount?'

As A.I. makes law firms more efficient, clients ask: 'Where's my discount?'nytimes.com

146 points•mooreds•3 days ago•157 comments•

#law #efficient #clients #firms #wheres #discount #law firms #makes law

157 comments

My experience with lawyers is that if you need a legal document, they often have templates ready to go and will take 10 seconds to find & replace your company name into the document. I know this because they often don’t proofread it afterwards. They then charge you $1000 for that 10 seconds of work. Given that I have felt ripped off by many lawyers, I’m totally fine with that industry getting disrupted.

alphasm3 days ago

I recently had a similar experience where it became very clear that the lawyers were using AI to draft the agreements. Though it was very accurate and pedantic on some matters, it got other things completely wrong because it was not provided with full context, and full context is very difficult to provide.

The lawyers did not properly review the agreements, causing post-signature discovery of major issues and having to redo and execute all the agreements a second time, leading to inflated lawyer bills.

If the lawyer is going to prompt the same AI that I can prompt myself and is not going to review the agreements thoroughly, then it is clear where this is leading.

fluidcruft2 days ago

That happens even when AI isn't involved.

tsss3 days ago

> then it is clear where this is leading

Lawyers lobbying to outlaw AI-generated legal documents?

otterley3 days ago

This reminds me of the parable about the plumber.

A plumber comes over to repair a broken water heater. He looks at it, taps a pipe with his wrench, and it's fixed. He hands the customer a bill for $500. The customer becomes angry because all the plumber did was tap a pipe, and demands to see an itemized bill.

The plumber dutifully provides the bill:

* Pipe tapping: $5

* Knowing where to tap: $495

analog312 days ago

The other version of this joke:

Customer: $500 for 10 minutes of work? That's more than I make as a brain surgeon.

Plumber: It's more than I made as a brain surgeon too.

revolvingthrow3 days ago

Except in this analogy the plumber didn't know where to tap, or knew and didn't care enough to tap in the right place.

I can tap a pipe in a random spot for a lot less than $500.

harpersealtako2 days ago

alternatively:

pipe tapping: $5

knowing where to tap: $95

taking on the legal liability and accountability in case the water heater explodes: $400

ChatGPT is more than capable of telling you where to tap, but you can't sue openAI if it gets it wrong and your water heater explodes.

tiffanyh3 days ago

Do you have any issues with thr tech industry selling software licenses?

Because a lawyer selling a contract template, is in many ways, very similar in concept to tech industry selling a software license/seat.

They are both akin to “templates”, and selling IP.

sa463 days ago

The difference is that lawyers typically charge by the hour. Software is not sold based on how long it took to create.

So, if a lawyer bills $1000 for "10 seconds of work", it smells fraudulent.

If $1000 was a flat rate, then it's similar to software: you're purchasing some IP and passing off legal liability to the lawyer. How long the lawyer spent on it doesn't matter.

atherton940273 days ago

They still need to proofread the doc and make sure it applies to their client though?

thayne3 days ago

I think it is more akin to paying a software contractor to make something to meet your specific need, and they give you an off the shelf product (which they may or may not have made themselves).

beaned3 days ago

One is transparent and the other feels like a lie.

Not in principle, but in practice.

fbrncci3 days ago

I think this is mostly a thing in the west. I was very surprised when I moved to Asia, and ended up emailing with lawyers back and forth for weeks, getting the right documents; the right advice, and then charged money the moment there actually was "work" to do, and I needed to hire them. It was shocking to me, because by that time I would have already spend $1000+ on a lawyer in Europe or the US.

glenngillen3 days ago

The lawyer I ended up using for a lot of my structuring happily admitted as much when I was shopping around for someone to do what I needed. I said something along the lines of "all the other quotes I've got are obviously more expensive, I have to think that's because they've put a lot more work into them to cover/mitigate any precedent I need to be concerned with and/or are better equipped defend these documents if we end up in court". His reply was: "Oh sweet summer child! You think any of us are showing up in court to defend these contracts!? No. If someone has issues with any of these, you'll send them to me and I'll charge you my rate to deal with them. If we need use a clause in these contracts to protect ourselves or get what we're owed then I'll send a bunch of stern emails about it, and I'll charge you my rate. But if anything ever ends up in court... hah... that's not us man. Now you're having to find a lawyer that specialises in litigation. Nobody that you're speaking to about these documents right now is going to show up in court to defend these documents. That's not how it works".

When I pushed the others it turns out he was right (except for one especially large firm who basically did everything, but it may as well have been a collection of a dozen different companies). Really appreciated his honesty but was all the more baffled by how the whole industry hadn't already been disrupted.

nomilk3 days ago

I feel this is the case for a lot of industries (and even a lot of productivity-enhancers, beyond AI).

I remember a much slower change where software slowly ate away the work of property managers. Especially convenient was the ability for the tenant to perform the 6-monthly inspection remotely by uploading a half-dozen photos per room, taking just 15 minutes or so rather than waiting around for several hours for a physical meet up with the property manager. Software also allowed rent payments to be easily automated, collated and monitored.

But I don't think the number of property managers decreased, nor the price that landlords paid for their services.

apical_dendrite3 days ago

When I was looking for an apartment recently, the big "luxury" buildings use AI agents to schedule tours and answer questions. Tours are also self-serve, you don't actually get to meet and talk to anyone. It's a crappy experience. I had to call an AI agent to figure out how to get in the front door of a building and it completely failed to answer this very basic question (fortunately someone eventually saw me knocking). When I toured one large complex there were several groups wandering through the building at once. It did not give me a particularly safe feeling to see that random people going everywhere in the buildings unescorted had been completely normalized.

mikert893 days ago

Spoke with a banker at a well known investment bank in NYC last week. They told the law firm they want the fees cut in half or they walk. This is to a top 5 law firm. Lawyers are trying to charge the same prices, when both sides know they are working half the hours. This is even at the most premium top end, where an engagement bill can run up to 30 million.

lurk23 days ago

> Lawyers are trying to charge the same prices, when both sides know they are working half the hours.

An absurd claim presented without evidence.

mathisfun1233 days ago

80% of hn comments

jareklupinski2 days ago

source: my lawyer friend now orders two martinis for lunch instead of one

mikert892 days ago

you want me to post their name?

throwyawayyyy3 days ago

Aren't bankers charging the same prices they were _before computerization_?

mikert892 days ago

the value from bankers comes from relationships, sales, and their weight in doing a good IPO. its not about hours worked

Henchman212 days ago

Are we not still paying to “build out” the payment networks for Visa and Mastercard?

sensanaty3 days ago

Because bankers famously aren't greedy pigs, and they definitely lowered prices for their customers after the efficiencies gained with computerization, right?

cupofnotjoe3 days ago

Even if you had evidence to substantiate this, a well known investment bank was never utilizing a top 5 law firm because of the rates it charged.

throwaway898643 days ago

The issue is that communications with A.I. are not privileged like client-attorney. There was some judge that made that ruling.

Feels like a conflict of interests to me, I'd guess friends, neighbors, children and nieces of that judge enjoying their livelihood by charging for legal services. While legal services are now available under substantially lower rates and with a lot fewer conflicts of interests from A.I. providers...

anon3738393 days ago

This is a completely straightforward application of existing law on privilege. To maintain privilege, among other things, communications must be confidential.

Chatting with Claude breaks confidentiality: chats with Claude are subject to arbitrary inspection by Anthropic employees, not to mention the issue of model training.

You can use self-hosted LLMs without breaking privilege. And funny enough, law firms like Latham & Watkins are now buying Nvidia GPU clusters for this purpose.

jryle703 days ago

> communications must be confidential.

Email and phone calls are considered confidential, even though it is possible for vendors to inspect the communication. I expect AI use will be tested legally, but once precedence has been established in court it will become a common practice.

District55243 days ago

That's Latham & Watkins, but I haven't heard of any others. I'm not convinced that for anyone smaller than them it is worth spending on HW. For adversarial works, you will always need the latest frontier model and those things are not available for most of the firms even for licensing, and it's much cheaper to use Amazon Bedrock or similar (which is already available). It's just not economical with the current trends. You won't be breaking any privilege even if the law firm is using a public cloud service. Maybe the law firm will have to use geofenced datacenters etc. based on deontology rules or national requirements... But in many jurisdictions, you have to use a law firm to keep LPP, that's the point.

reply00r1232 days ago

Don't care, saved $20,000. Superintelligence can have the details, I am too boring to threaten skynet / unplug any of it's GPUs (personal case). I'm sure it has something better to do than come after me.

tehwebguy2 days ago

People can’t know for sure that they saved anything until all statute of limitations have expired without a lawsuit!

true_religion3 days ago

They ruled that it's like a journal, or a tool like a search engine. This seems fair.

judge20203 days ago

But, if you were to represent yourself, are your journal entries about said case privileged? Can the opposition call into evidence a binder of legal strategies you created that morning before court?

At what point does it become a 5th amendment issue? Maybe when we get AI in our corneas a la Black Mirror's The Entire History of You?

socializer3 days ago

Outside of court proceedings, a significant proportion of what law offices do is already extremely streamlined. Stuff like wills, deeds, incorporation paperwork, is all template-based and any remaining work is done by paralegals, then billed at outrageous rates. So I'm not actually sure if AI makes it a whole lot cheaper. Maybe it makes it harder to pretend.

But there's also a good reason why lawyers can keep charging these fees: because they have a say on who can practice the profession. Unlike software engineers and like doctors, they're in charge and will not allow autonomous systems to represent you or otherwise "practice law". That'd be suicide.

Also, for many services, downward price pressure already exists to some extent, in that there are various "low-stakes" virtual legal firms licensed in multiple states that provide forms you can fill and then file for $50 a pop instead of $500 a pop. But most consumers still prefer to visit a local law office. I'm not sure this will change with AI. I know quite a few people who are keen to self-diagnose using Google or ChatGPT, but I don't know as many inclined to vibecode their articles of incorporation.

It's really one of these white-collar professions that I think is quite secure. Software engineers are hosed to a greater extent, having enthusiastically engineered their own personal hell.

classified3 days ago

> That'd be suicide.

And yet many software developers are hyping themselves into obsolescence by pretending you can't write code by hand anymore.

Read the full thread on Hacker News →

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