I was saving this up for all three parts to be written. It is a good thing it is Friday. These posts are long, complicated and will require no multi-tasking. First up we have the stage being set by Ryan McClead (self admittedly channeling his inner Casey Flaherty) Then for parts two and three we blend in Greg Lambert, and Toby Brown. With these names behind the posts, you know you're in for some solid writing. The focus of this triad of posts is the Goldman Sachs report earlier this year "claiming that 44% of 'something' in the Legal Industry was going to be replaced by Generative AI." Ryan took exception to this saying the data used by Goldman Sachs was insufficient to make such sweeping predictions. He wrote, "Reporting about this report is sloppy. Reporting within this report is sloppy. The underlying data doesn't tell us much meaningful." Ryan looked at the reporting and found people taking that 44% of as legal tasks, positions, and work. " Okay, so which is it?" is Ryan's question. Greg and Toby swoop in with some better data from LexisNexis CounselLink. It is still a small set to extrapolate from, but better than the Goldman set. There is more, but the takeaway I will highlight is "We estimate that a realistic initial upper limit for Generative AI would be to reduce that work by half, or 20% of time entries and 23.5% of revenue." From the third post we get the assertions and AI-Pocalypse numbers. I think their reasoning is sound and I agree with them that "Generative AI will disproportionately impact non-partner hours." I can even accept their baseline chart (even though lawyers in firms my size don't commend those kinds of rates!). The conservative estimates are a 5% (partners) / 20% (non-partner) reduction in hours. But as this is an unknown territory for us all, the geeks ponder a 20%/40% scenario as well. The bottom lines are solid advice. The ones I like best are: "Do not blindly invest in expensive Generative AI solutions;" "You have to improve leverage;" and "Don't get caught up in the hype." My favorite line of all these posts is "Magic does not exist." I'm not sure how many hours the geeks burned through doing the research and analysis, but it is crisp and clear with examples even someone like me can follow. It's certainly well worth studying. Be sure to set aside time and read more at 3 Geeks and a Law Blog:
44% of Investment Bankers Think They Can Make Lots of Money Off of Attorney Insecurity (AI)
Generative AI Could Reduce Law Firm Revenue by 23.5%
AI-Pocalypse: The Shocking Impact on Law Firm Profitability
Published August 4, 2023.
