Technology

How Will Legal Technology Impact The Move To $180K?

Here's what legal tech experts have to say about the increase in Biglaw salaries.

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Technology and moneyThis post looks like a column but there’s a conversation at the very end. So, if you want to ignore my opinion and skip to the end to hear what actual legal tech experts have to say about the increase in Biglaw salaries, by all means scroll down, I won’t be offended.

Last week, in the middle of all the hubbub and hullabaloo of the Biglaw salary raise, David Lat published a post on what in-house counsels think about the nationwide move to $180K. In the article, David quotes, among others, Susan Moon who expressed concern over the sheer waste and inefficiency of paying first year associates to do work that will ultimately be checked by a senior attorney, valid criticism I suppose even under the previous salary structure.

But, as David points out, it will be years before in-house counsels are actually asked to absorb the entirety of the much ballyhooed move to $180K. At the moment, it is Biglaw partners who will absorb the increase.

But here’s where that could get messy.
Partners might be willing to share now, but some of them are expecting to make up for these losses on the back end. The growth of legal technology could make that proposition trickier than it sounds. While the technology is not all perfect or fully baked just yet, start-ups are actively developing and marketing new products utilizing cloud, open source and artificial intelligence, that will automate and cut down on many of the tasks traditionally delegated to first year attorneys. That means that, in five years, when these technologies are exponentially better and more highly commercialized, Biglaw partners will have a much harder time asking in-house counsel to sign off on an increase in hourly rates, especially for first year associates. What’s the solution? Stop hiring as many attorneys directly out of school? Give first year associates real work? Beats me. As David pointed out, it is already the case that “clients have significant leverage,” and technology will only increase that leverage.
Last week, in a conversation about artificial intelligence and the law DocuSign’s in-house counsel Scott Trainor made this point about machine learning explicitly:

So yes we are concerned about the recent salary increases and articles about $2,000 an hour lawyers.  It will be this increased cost that will drive a lot of legal departments to take their first step into substituting AI for lawyers.

Scott did qualify that we’re not necessarily at a tipping point or experiencing a paradigm shift right this minute. But, five years from now when Biglaw partners want to get their money back by increasing rates, it may be harder than they’re expecting.

If Scott is right, more and more lawyers will start utilizing artificial intelligence and machine learning which means the companies creating the software will likely have more sales, growth and investment in R&D. And here’s the kicker: the tech itself doesn’t even need to get better (although it will). One of the primary challenges of tech companies is educating the public about how useful it can be, not in the future, but right now. The easiest way is actually getting them to use it, but people do not simply hand their lives over to robots — just ask the people who still refuse to use Waze or wince, myself included, at the mere thought of driverless cars. The move to technology often requires catalysts, but for legal tech, $180K has the potential to be one of those catalysts.

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I wondered what some other folks in legal tech thought about the move to $180K, so I’ve invited some really smart in-the-know folks to drop in and give their take. Some of the guests include Andy Wilson, CEO of Logikcull, Jackie Donner, cofounder of Lawflex, Shmulik Rosenberg, CMO of Lawgeex, and there will be other surprise drop-ins as well. Want to follow along as the different answers come in? Drop-in your email below.

Zach Abramowitz is a former Biglaw associate and currently CEO and co-founder of ReplyAll. You can follow Zach on Twitter (@zachabramowitz) or reach him by email at [email protected].

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