Businessman-Technology

Conversations regarding AI-backed legal tech still need a reality check in terms of expectations and pricing, according to a panel held Wednesday at Legalweek 2020 in New York .

During the "Memo to LegalTech Founders: Powerpoints Don't Create AI—Data Scientists Do!" session, panelist and Littler Mendelson chief data analytics officer Aaron Crews noted that c-suite's lofty ideas regarding AI and vendors' usage of the buzzword leads to unreachable expectations.

"At the vendor level there's a lot of market speak about AI and in the c-suite there's conversations that AI will make the company go faster," he said. But he added that those tasked with implementing such technology and meeting the c-suite's goals are left with the reality that a single AI-powered tool can't solve large, encompassing challenges.

"I think there is a reality around adoption that is coming quickly. You'll see a shift to: Here's a very specific pain point and we have a very specific solution," Crews said.

Evaluating a single challenge and determining a tech solution's downstream ROI and cost will lead to faster tech adoption, Crews argued.

For his part, Liberty Mutual Insurance director of innovation Jeff Marple said utilizing a certain quota of tech tools isn't his legal department's goal. Instead, his legal department is looking to use technology to cut spend and resolve other challenges. 

To be sure, Clark Hill CIO Joan Holman said she hasn't heard a specific demand for tech from corporate clients per se. Rather, clients want to minimize spend and improve strategies, which leads to tech usage by the firm, she explained.

As law firms turn to tech tools to help deliver the services clients demand, Blickstein Group principal Brad Blickstein noted that greater efficiency from AI could lead to a dip in the billable hour. Simply, "If your tool does an hour's worth of work for two minutes you can't just bill for two minutes," he said.

Instead, law firms need to figure out how to commercialize their assistance, through subscriptions, price per unit or by other measures, Blickstein explained.

"The real value is for firms to identify tools that solve problems for their clients, implement those tools to help clients and roll out those tools," he said.

TE legal operations business performance senior manager James Michalowicz noted alternative legal service providers are already accustomed to pricing by document, contract, witness preparation, depositions and other services provided. He said it's a pricing model more law firms should become familiar with.