Hello and welcome to another episode of the OddLots podcast. I'm Joe Wisenthal

and I'm Tracy Aloway. Tracy, I was at a uh my cousin's wedding this weekend and I have a lot of uh lawyers in my family

I didn't know that.

Yeah. 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 5 seconds of any conversation, I'm like tell me about trials and like techniques like sway 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. Mhm. Well, uh I have a lawyer in my family too, an ex-lawyer, uh my husband,

uh who did big law, big corporate law, absolutely hated it and got out of it, um 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 uh 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 AI 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. Um, so many points to make here. First of all, I am vastly in favor of anything that makes corporate lawyers lives uh 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 because they're like, "Well, AI,

that's what I suspect."

Yeah. Yeah. No one's actually.

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 are going to be speaking with Joel Worerheimer. He's uh currently at Worheimer Fleer LLP, a civil rights uh 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. Uh Joel, thank you so much for coming on OddLots. Thrilled to have you here.

Thank you for having me. Um, why don't you real quickly tell us like 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. And we sue the government mostly uh for violations of civil rights. Sometimes that's false arrest or wrongful convictions. Uh sometimes that's wrongful removals of 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/criminal lawyers are they happier than corporate lawyers?

I would say on average, sure, but the distribution is probably pretty wide for each,

you know, I look, I do think on the the nice thing on the plaintiff side and as like I'm my own boss. I get to, you know, determine how much I work and each extra case is just more money or less money if I if I decide not to take it. And so I can sort of set my own work life balance when I do that, you know, and I'm it's it's constantly a decision of sort of what's the expected value of a case and and is it worth it to me in terms of the hours I have to put in.

So let's talk about when you were at uh big law and you know I joked that you know people they're up at 1:00 a.m. and they're looking at commas. I know that's a little bit of an exaggeration, but I

No, it's not. It really isn't.

Yeah, I guess it's not. And I know that uh 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 clocking those six-minute increments?

contracts and deal points constantly.

For litigator a lot of your your time is in discovery and that's true small law big law but you are reviewing documents uh 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 council. 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 at 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 uh I think even academia to some extent. But talk to us a little bit about like how that value acrus to the entire firm and the partners and the distribution of the uh the fees that the clients are paying,

right? So you have what they call uh 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 associates. a one partner to say four associate ratio. All of the big law firms uh basically pay the exact same amount to their associates. This is called the crevath scale. If you you can you can look it up and it'll say a thirdyear associate makes $250,000 and gets this bonus each year. Let's just say for for uh the average associate bills $700 an hour and is expected to bill about 2,000 hours a year. So they're they're generating 1.4 million for the firm in revenue in terms of build out and they're getting paid uh I'd say with taxes and and everything 500,000. So the partners are making $900,000 for every extra associate. So if you have a 4 to1 leverage n you know uh 900,000 profits per partner 3.6 million. And that's how they're trying to think of it. And the the big partners, the rain makers are the ones who can generate enough work to support those associates. Got it. Uh and if you can't support those associates, your leverage goes 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. And so

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 cut you could start with a cheaper uh legal research service than than Weslaw things like that I think and you've seen it in the 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 um I think

consolation prize

that's right and and you get to shop the title I think is the other reason you know 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 tenure now it's a it just the the ladder's getting pulled up I guess in in these sort of industries

would anyone go into a big law firm if they knew in advance that they wouldn't make partner like there's so 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 partner like is that crucial towards that decision if you knew in advance 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

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 to work. You typically wouldn't do it. And the reason they have this upper out sort of system at the big law firms uh is because the prospect of being partner drives you to 2,2500 hours how many it is. You're showing how

the light 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 I actually quite enjoyed some of it, but that pressure to to bill and work is 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 you certainly learn you know how to think about the law but you're not learning in the and you have a legal

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 pro where do you learn right

so what is the learning

so here's an example you don't learn how to have uh a dispute about discovery in law school okay you know I I sent out discovery demands you owe me documents right under 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 you send out demands and 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 they lost them." And you have to have a fight about getting the documents, what keys, 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 the denial, those sorts of things. and what the writing looks like and feels like you just don't get in in law school. You just the and and even writing a brief and what's a persuasive brief you the edits those sorts of things you you learn how to do legal writing but it's just you 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 uh to get their 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 they're now going to have more uh fights about documents uh 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 the leverage model is and the build our model is going to run into some difficulty. It'll also make their lives easier just in terms of, you know, as an example, you get discovery requests. I talk about discovery a lot because it's truly like a lot of the work of being a lawyer. But they come, you know, the other side will send you a PDF with a bunch of demands and then you've got to respond to the demands. And even just the 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. It's called briefpoint AI

and and they it's also very templated, right? So you're constantly trying to find templates. Hey, other associate in this law firm, can you send me, you know, a previous document now? I can 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, and it look to to look good and and not have to fight with Microsoft Word for 3 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 uh, you know, that will free up labor time for sure. the you know JT GPT's 03 Pro is doing legal research now that is quite excellent

this is really important people who think that this that 03 is dumb or is a hallucination machine are not or that CHBT is have not used 03

that's that's my view and you know there's this professor at uh Georgetown I think his uh name is Danny Wiltown 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 how they do on each of these questions. And when 03 came out, not even 03 pro, when 03 came out, it was uh it it answered them all, some of them excellently, and even got what he it was it's called an issue spotter question. So, it wasn't on the face of the question. It was an appellet 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, you lawyers getting sanctioned because they're, you know, submitting things with hallucinated cases. And

there's some funny examples of that.

They're they're amazing. And the thing I think to myself is you would never submit as a 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 you're that's the job is is checking the cases. Shepherizing is the is the I think the Lexus term for it. And 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. Fi point 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 or Thompson Reuters or anything like that. I assume it's coming and and once it's going to be integrated with those databases of cases. Right now it's just trollling the the internet. Um 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 and you don't know the exact term that's going to come up in the case. You know what the all of the president use this term? Uh 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 to dig in and find the the right,

you know, language to then go on Lexus and then to to chase it down.

I've been using 03 more for just sort of my own like intellectual questions from time to time.

Your own lawsuits? No, I haven't uh done any uh 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 re 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 uh all it 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 pos I'm not going to like copy and paste summaries and present it as my work. I could 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 etc. seems extremely powerful and time-saving. It's truly been life-changing for me. I and and I like doing legal research. I like getting into the cases, but just, you know, if there's a new issue and and you just don't know where to start,

you know, that's that was always, I think, for a junior associate, where do I start? And I think it will make their life easier in that regard, even if it might also make their lives, you know, hard.

Okay. Uh, timesaving, making associates lives easier. That sounds great. Um, from a personal perspective, but what does 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 uh to use AI if it means a reduction in billable hours. I suppose they could make it up in volume. Maybe that's that's the idea. They can take on more cases. But is is that the expectation?

They might be able to make it up in volume. I do think things like they call them, you know, ultim al 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.

Um, so so that's one possibility that the 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 I it's been a while for me. So, you know, the big partners, let's say they're they're billing out at $2,000 an hour or $1,500 an hour and and the associates are $700 an hour. I think in a lot of ways what the client is paying for is the is really like $5,000 an hour for the partner and and 400 or 300 for the associate and but it just gets build out se differently

and I think one thing is that partners might just acrue 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 Crevath. It's sort of like a way to 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 and they just they just missed it, but look, this is 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 acrru to the to the the top top lawyers.

I mean that seems like it'll have implications. We should talk about that further. Something I have done is I'll take episodes transcripts of oddlot and afterwards I'll do a little self-criticism session where I'll like say like where could we have pressed this? Uh 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, etc. And sometimes I 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. Yeah, 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 yeah, but it also it does sound like you mentioned the issue spotter question like 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 um you know get as as the models get better and I have to produce a brief and 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 u you know and

you got to run your own DeepSk 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 inhouse on your own servers, that's going to really be the the thing that that launches it. I can't do that cuz it's just me and and I'm not going to host a server farm. But I do know right the new Apple chips on these very nice the newest they can run you know things like llama very well and so it's coming. Uh but 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 Crevath, as you mentioned, or some other magic circle law firm. But on the other hand, if Kvath is now using AI, I imagine on the client side, maybe there's some concern over having their material contracts or employee data or financing documents or whatever getting uploaded to off-site 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 um done by a junior associate without actually reviewing it first. So maybe that's not as much of an issue. But are there any um qualms I guess coming from the client side that you see? So I I can't speak to the big law as much anymore and it's it's very different I think on my side and I think you know my my clients are their qualms are are much sort of bigger in terms of privacy and and much more you know focused on on the government and 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 side lawyer is documenting injuries, thing like things like that. And they're certainly concerned about their medical privacy. And so I can't, you know, use AI yet to to take the medical records and condense them into, you know, the quick summaries. Um,

So I I can't speak to the big law as much anymore and it's it's very different I think on my side and I think you know my my clients are their qualms are are much sort of bigger in terms of privacy and and much more you know focused on on the government and 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 side lawyer is documenting injuries, thing like things like that. And they're certainly concerned about their medical privacy. And so I can't, you know, use AI yet to to take the medical records and condense them into, you know, the quick summaries. Um,

but those programs I'm sure are coming where, you know, you have there's 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. Um, I am sure that you know if you are Goldman Sachs and you hire a big law firm and they've been doing your your deals or your IPOs such as they exist right now and you don't want the the law firm training on your documents to go use them in in other deals, I'm sure this is an an issue. On the other hand, you know, it might reduce your legal costs by by half and you can fight about that. And so, you know, what they're willing to do, I don't I don't know.

Let's extend forth some of these economic questions because allowing the senior partners to acrue 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 uh you know 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. etc. Like what is the downstream consequence of your view in your view of some of these shifts that are happen right now because you know eventually all the partners you know eventually everyone's going to die and there's going to be new like where does this go like what's the next what are the consequences

so I think that uh 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 bet 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 skill uh in in value. and the scale 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 I question whether that skill will have the same value. But there's a lot of interpersonal skill that matters a lot for for being a lawyer and that's going to go up in value.

Now the question with any new technology is does it cuz 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 you save 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 it's like oh you know what maybe this is worth filing a lawsuit everywhere. This was actually going to be my 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 prosay on their own behalf

or maybe more lawyers like you take on cases take other cases that in five years ago the economics wouldn't have made sense but today the economics made sense like could it just be you know Jevans paradox but for law. I think

I think that's absolutely going to happen. You know I can just sort of walk through the economics of one of my cases. you know, somebody comes in and they say they they had a false arrest case against the the NYPD and they spent, let's say, 5 hours in custody. We sort of know what the expected value of that case is. You know, you're doing what chance are you 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 I a contingency fee typically a third in 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 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 of for, you know, what it takes to 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 prosay uh in in the court system right now I think it's like 20 25% of cases are from prosay litigants

these are the people represent themselves

who represent themselves because they can't afford a lawyer or you know my cases are contingency people are 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 prosay lawyers are going to start getting better that you know uh you said you were doing research on your own you know with 03. It's possible that you know if 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 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 prosay

frivolous lawsuit. No, I mean, no, I mean like someone who did their own research cuz 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.

No, no, no. You're democratizing case law. That's what I say.

I want to be clear. They're already getting that. The the judges are getting a lot of it. especi pro, you know, prosay prisoners who get to spend a lot of time

in the legal librarian and are filing cases and some of them are are excellent and and but sometimes they're they're not so good. I clerked for a federal judge and and we saw a lot of this litigation, a lot of it prosay. I don't know that they're, you know, providing AI access in in prisons unfortunately uh in terms of litigation, but I I think I actually think there are going to be a lot of annoyed judges because there's going this is going to happen. It also might be the case that it uh raises the floor of

you see a lot of bad legal writing even from lawyers and and I could see it getting it actually getting a little bit easier to be a to be a judge and a clerk.

If everything becomes more volumeoriented 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 um 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 f look finding finding the deals making the 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 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 on Google are are the most expensive uh cost per click I mean these thousands of dollars for cost per click. Case acquisition, I think, is might go up even more because if you can just get the case in you're 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, you know, plaintiffs mills. People who are doing, you know, 600 cases per, you know, every couple 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. Hey, have you Tracy Orel have either of you heard the radio ads for Top Dog Law?

Yes.

Um I have not.

You 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. like just go search right now or when the episode and listen to some of these um ads. Do you buy ads on Google?

I I've done some Google ad campaigns. I haven't really um

This is actually another topic we're interested in.

But a lot of I mean a lot of plaintiff side civil rights lawyers are 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 I actually have started to think about right we we know this stuff about young people are starting to use chat GBT 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. Uh but what is SEO in a generative AI world is sort of an interesting question. What are people what are the 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 GPT rather than Google?

Is Lexus Nexus doing anything with AI?

They are. I have not really used their AI products. Lexus and I know Weslaw is doing the same. I'm I use Lexus. I assume Bloomberg Law, which is also is doing something similar, but right now the the models that that they're using just aren't as good as 03. is basically and so if you're still calling to a four era GPT or or similar from from claude 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 to 03's level I think has uh 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 40 or whatever 40 I don't the naming convention versus 03 it really is a very big deal and I think like a lot of people formed impressions pre3 impressions what other tools are out there that are interesting or that come 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 looked promising thing uh it's like Iudis or IQ IQ ID something like that and they looked pretty interesting in terms of sort of being full Sweden wraparound there's Harvey AI but they're really focused on on big law firms but I know that they're working with a lot of big firms but you know the technology you know for me that looks promising would be people where I can safely upload medical records and get instead of trolling through 200 300 pages just like what was each progress note what did it say what's the injury, that sort of thing. And and I think that's coming. There are I think it's I maybe something from case text or 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 more 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. Yeah. Is is something that I'm constantly trying to think about because I've used these these products in the past or tested them and they haven't been very impressive. But I also used 40 and wasn't very impressed that it's legal research and have seen that that jump. And so I assume in terms of taking depositions and 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?

Uh, as a percentage of the population.

Yeah, that's a great question.

Thank you for the caveat, J. That's important.

And I hadn't I hadn't thought about this one. I would I would bet on fewer, but not that much. I would say I I I I don't think this is, you know, um uh 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 you right you you think of Seleno, Seleno and Barnes, those sorts of firms, these big big plaintiffs law firms. I think

lawyers that they have

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 the get the medical records, send out a settlement demand letter, negotiate with the opposing council for or the carrier from the insurer. You know, my client has a 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, you know, let's say a hundred cases per attorney to a thousand or to 2,000 because they could set up an automated workflow a lot easier, I think. And so, you know, that person could could start making 50 million or 100 million a year per one lawyer than 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 did you play it very well but it's all about what you kind of what you described of like

you're 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 uh calculating Eevee on a given case and has that is there technology that's working on that

so it's not very scientific at all you know it's uh you can assess liability I think pretty reasonably. Is this going to be something where we're definitely going to win? You know, the personal injury uh car accident lawyers who 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 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 uh remittitor cases where you you might hear like, oh, this person got a $100 million for their, you know, 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 uh because words are numbers with with these programs. You could start to quantify what what are the injuries worth in the 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 um they're super sympathetic and you know have that negotiation but I think that process of evaluating the exact value of a of an injury or or of a case is going to get a lot uh more scientific and facilitate settlements to 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.

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.

I that that seems reasonable to me. Also, in the class action cases, you just got a volume of of data that you have to do discovery on, but it 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 all the people are all complaining about this same issue with this product or something like that and the the lawyers, you know, reach out to them. And so, it is entirely possible. I could I could see that that

that's another thing where you could have AI just trolling the internet for possible cases.

I I I think so. Or, you know, what are people posting about on on Twitter? What are they all getting harmed by? I don't know. So, it's it seems entirely plausible.

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 I'm not going to get into it, but it involved taking an illegal left turn.

Joe's a criminal.

I'm not. But thank And

were you found innocent?

I am not a criminal thanks to a uh referral that our guest here Joel helped make for me. I'm not going to say we're not going to talk anymore about the case. It was super annoying. I'm not going to say anything more, but I just want to I'm it's my disclosure for this episode. So Joel Wortheheimer, thank you so much for coming on Oddlo. 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 app.

No, I swear I was driving. I was in a Uber home several months ago and this ad came on the radio and it was like nothing I had ever heard in my entire life. Nothing will prepare you for this this law firm's ads. Anyway, we could talk about

I am very intrigued.

All right. Well, that was a fantastic conversation. One thing I am wondering is, you know, in the US there there's a lot of talk about an overly uh latigious society and I kind of wonder if AI is potentially just going to make it worse. It sounds very plausible to me that it 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 Jeff'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 dis, it's gonna probably have very big distributional and qualitative shifts on the industry.

Yeah. And this is the thing I'm also wondering. So, okay, junior associates, maybe they h they're doing less work, maybe they're slightly happier, but I guess the idea that more of the value just accrs to the partners at a time when it's harder to become partner, uh, that seems to be the downside if you're going into the legal profession, right?

Yeah. 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 uh imagine or people maybe even rightly surmise that you know there'll be a lot of benefits for you know existing holders of wealth or companies could 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 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 does that do they invest it? Does that turn into consumption for the partners? Like there are a lot of you know people's like oh it's going to be mass layoffs but I never find these questions very satisfying because the money doesn't disappear. It's someone's savings and someone's savings either becomes 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 03 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. Um, 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 Thoughts podcast. I'm Tracy Aloway. You can follow me at Tracy Aloway.

And I'm Jill Weisenthal. You can follow me at the stalwart. Follow our guest on Blue Sky. Joel Worerheimer. He's at worthwhile. Follow our producers Carmen Rodriguez at Carmen Armed Dashel Bennett at Dashbot and Kalebrooks at Kalebrooks. For more OddLots content, go to bloomberg.com/odlots where we have a daily newsletter and all of our episodes. And you can chat about all of these topics 24/7 in our Discord. We even have an AI channel on there.

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