AI Benefits, Cooley’s Meatballs, Opus 2 +

We start this week’s Wrap with a survey: ‘Has law firm AI use delivered cost savings for clients?’ There is a link here to share your view.

And of course, many law firms may consider that question and reply: ‘But we don’t want to reduce our prices, the idea is to increase them as much as possible!’ And that is a very fair thing to say, given that a law firm is a business and businesses need to make money.

But…consider this:

• The owners of a legal business quite rightly want profits. These profits are expressed as PEP (profits per equity partner), as most firms are co-owned by the equity partners, who share in whatever is left over after paying off the support staff, associates, salaried partners, office rental, and tech costs, and a few other bits and pieces.
• Those profits, at present, are largely derived from billable time accumulation via high levels of associate leverage. Profit increases are mainly driven by adding to billable hour rates and then keeping those ‘cogs’ turning as long as humanly possible across the firm.
• However, the input costs to do this are significant. Associates and office space are not cheap. Profit margins, while very high compared to many other sectors, are highly sensitive to these costs.
• Using AI places a professional services firm into a new economic model where human leverage is not always the main engine of profit generation.
• If the input costs of producing a piece of work can be lowered via the use of AI and other forms of automation, (rather than relying on human labour), then profit margins can be protected even if output prices are reduced to meet client expectations. That of course needs a flat fee, or fixed price – perhaps with some wiggle room for overruns – as that then allows work efficiency to build up your margins.
• In short, the PEP of the legal business owners stays the same, or rises. Meanwhile, the clients are happy and loyal because they see some real benefits after all those press releases from their law firm advisers about their adoption of AI.
• So, think about the input costs and how AI changes them, then consider how you can reduce the output price and still maintain your margins – or grow them.
• Or, alternatively, just stay as you are and only use AI to absorb the non-billable work and change nothing substantive in terms of the firm-client relationship. In this case, you can also save money by no longer needing to send out press releases about your AI use, as it won’t have any impact on the clients and is just for your own internal use.

Here’s the survey link.

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OK, and now some news, in traditional summarised Wrap style.

Clio has hired George Totev as Vice President, Security and Chief Information Security Officer (CISO). Totev will lead Clio’s global security, compliance, risk, and privacy functions as legal professionals bring more of their most sensitive work into AI-powered tools, they said.

At Goldman Sachs, Visa, Atlassian, and Snowflake, he ‘designed and implemented security architectures supporting billions of transactions, managed FedRAMP and Department of Defense authorization processes, led pre-IPO security readiness programs, and oversaw security integration during large-scale M&A transactions,’ they added.

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Intapp has announced that Celeste, an AI coworker ‘that runs the business of the firm, from deal screening and conflicts clearance to business development and lateral hiring’ is now widely available.

It’s grounded in each firm’s proprietary knowledge and governed by the firm’s own methods and compliance rules, they added.

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Flo AI has arrived for talent questions. It can answer: ‘Which recruiting sources produce the associates who go on to perform the highest? Which skills now separate the firm’s strongest performers, and how has that changed with AI adoption?’

‘The best firm leaders already carry these questions in their heads. What they have never had is a way to answer them from their own data in seconds,’ said Katherine Allen, Co-Founder and CEO of Flo.

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Streamline AI, an AI operating platform for inhouse legal teams, has launched Streamline Slack Intake Agent and Streamline MCP Connector.

Kathy Zhu, CEO of Streamline AI, commented: ‘When every team can work with legal more naturally, legal becomes more connected to the business, and the business moves forward with greater speed and confidence.’

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Artificial Lawyer has published Part Two of ‘The Innovators’. The Part One link is also below.

Part One is here. Part Three will arrive next week. 

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And finally, Preston Clark has rejoined Twitter only to find that very few legal tech people actually ever left, and most of those that did are back again after a disappointing package holiday to BlueSky.

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AL + Opus 2 Webinar – Thursday, July 23, About AI-Native Law Firms

Join Opus 2 and Artificial Lawyer for this special webinar: ‘From AI-enabled to AI-native workflows in litigation and beyond,’ on July 23rd, 4:00 PM BST, 11.00 AM EST, where we will explore the realities of moving to a truly AI-first approach for litigation work. 

Join the webinar to explore:

• Practical advice for driving consistency and deeper engagement with AI,
• How to embed AI into complex, high-stakes litigation workflows,
• Tips to encourage AI-first thinking and innovation.

Speakers:

• Tiama Hanson-Drury – Chief Product and Technology Officer – Opus 2
• Julie K.Brown – Director of Practice Technology – Vorys
• Richard Tromans – Founder, Tromans Consulting – Artificial Lawyer, (panel chair)

RSVP here.

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And finally, in this interview, AL and Cooley’s David Wang explore the ideas behind creating reasonably-priced, flat fee productised legal services via the firm’s Vanilla platform for funds work – and how this connects to Ikea’s meatballs. Yes, there is a link….!

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Oh, and of course….

Two Major Legal Innovators Conferences this November

Come and join us in New York and London this November at Legal Innovators! 

Legal Innovators UK – London, Nov 4 and 5

And, then Legal Innovators New York – Nov 17 and 18.

After another fantastic Legal Innovators California, where we had speakers from OpenAI, Y Combinator, Google, Meta, and many more pioneering organisations; and our stellar inaugural event in Paris this June, we are now looking forward to the landmark conferences in London and New York, both in November, and both across two days: Law Firm Day, and Inhouse Day. 

• Legal Innovators UK – London, Nov 4 and 5
• Legal Innovators New York – Nov 17 and 18

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That’s all folks. Have a nice weekend!

Richard Tromans, Founder, Artificial Lawyer, and Legal Innovators conference Chair.