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Portions of this article were originally published bloomberg lawpart of Bloomberg Industry Group, Inc. (800-372-1033) and reproduced here with permission. Both the text and footnotes contain material that did not appear in my Bloomberg Law column. This is a type of bonus content for subscribers in the original jurisdiction.
The number of AI-native law firms is exploding, and many are founded by employees I was irritated Keeping pace with artificial intelligence in Biglaw. But other partners, like Cravath partner-turned-boutique founder Benjamin Gruenstein, are leaving, drawn to the potential of AI. called “Power multiplier”.
The most recent leading litigator to retire from a prestigious firm is Chris Kercher. After more than 17 years at Quinn Emanuel, he represented clients including: Elon Musk and ken griffinKarcher left his job to start his own boutique. Karcher’s law.
Why did Karcher quit the world-famous Quinn Emanuel? authoritative and make a profit Law firms of 9 million dollars Profits per equity partner should you hang the roof?
The short version of his answer can be summarized by the word “AI”. This full-length version is based on certain timeless aspects of law and the legal profession that convince Kercher that lawyers aren’t going anywhere.
For the past three years, Kercher has been exploring the potential applications of AI in his work as a commercial litigator and is an early adopter of Biglaw. He founded the AI and Data Analytics Group at Quinn Emanuel. This is a laboratory of sorts to explore how the firm’s lawyers can leverage AI more effectively. He has taught classes on AI. stanford method and his alma mater, New York University School of Law.
These experiences led Karcher to reflect on the direction of his legal career. As he told me in an interview, “About 25 years into my legal career, I started asking myself: What do I want to do for the next 25 years?”
And our deep understanding of AI has led us to ask fundamental questions about the practice of law and the role of lawyers. “Where do humans fit in? We have Claude as a client. We have ChatGPT as a client. Why would they come to a lawyer?”
“And the answer is, they have controversy,” he said. “In many ways, this is the same job that Abraham Lincoln probably did. A customer comes to you with a problem, and you advise them, counsel them, strategize with them, and perhaps negotiate with them.”
“But at the end of the day, if you have to go to court and defend them, that’s why they build courthouses. And a lot of the work between the client going to court and defending the client in court can be aided and enhanced by AI.”
Although he loved his time at Quinn Emanuel, Kercher felt the best way to explore the full potential of AI was to start his own company.
“To really understand what this new technology can do, we need to get closer to the actual work,” he explained. “I want to understand what kind of help I really need when a problem arises. What is the right role for an associate, a paralegal, software or AI?”
“When you’re in a system and you’re in a process, that’s the system, that’s the process, and it’s hard to reinvent from first principles,” he said. “Starting my own company was a unique opportunity to start with a completely new, unconstrained, clean slate.”
Historically, much of what clients paid for was what Karcher called “context assembly.” Big-ticket cases and transactions “require all this documentation, all the facts, all the notes, all the legal research,” and the client paid numerous (very expensive) legal fees to put it all together.
Today, AI can handle much of this context assembly, including document review and due diligence. This change has significant implications for law firm architecture, including how staff is allocated, work flows, young lawyers are trained, and clients are billed. And in Kercher’s view, the best way to integrate AI into every aspect of law firm operations and client service is to build new firms from the bottom up.
“If you look at electrification and early industrial construction, factory owners brought in their factories and added a light bulb here and a motor there,” he said. “But Henry Ford designed the Highland Park plant thinking, ‘What if we installed electricity throughout the factory? What if we assumed there was electricity and made sure everything we did benefited from it?'” That’s how I plan to build a system that integrates all of this from day one. ”
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According to Kercher, one area where AI should make a big difference is billing.
When context assembly had to be done by associates, it made sense for law firms to charge by the hour. Because law firms were able to protect themselves from downside risk. If the problem turned out to be more complex or difficult than originally anticipated, requiring more employees and increasing service costs, the company was protected because it would be paid for the additional billable time. Most of the risk was borne by the client.
But in Karcher’s words, context assembly can now be performed primarily and much more cheaply by AI, “reducing risk significantly.”
“So the simple changes I’m making are just ‘de-risking,'” Kercher said. “I focus on ‘fixed price per step’ billing so my clients always understand the cost of getting to the next level, but also know they can get off the treadmill at any time.”
While flat-rate billing, whether by step or by item, limits the risk for customers (which is why they like it) and exposes companies to more risk, Kercher said he was open to discussing this as well. But even if a case were to “explode,” the impact on the company would be limited thanks to AI, as much of the extra work “can be handled by computing rather than by employees.”
Achieve flat-rate billing by limiting customer risk Provide clients with more certainty and comfort. This may allow the client to more They are willing to litigate based on the ability to more accurately predict the costs of litigation, which in turn creates more work for the company.
So while AI will eliminate some jobs, it will also create new ones. This is one reason why Mr. Kercher is not worried about the long-term future of lawyers and the legal profession.
“If you look at legal expenses as a percentage of GDP, I don’t think it’s going to go down at all,” he predicted. “What the transition to the future will look like, including the shape of work, is an open question. But in the end, systems will take care of everything. Our goal remains the same: to advocate for our clients and help them achieve their goals.”
Karcher has spoken publicly about using certain cutting-edge tools in litigation. devise a strategy And Syllo AI review document. But ultimately, he has an old-fashioned view of litigation.
“The term ‘AI native’ is used a lot, especially on the transactional side,” he says. “On the litigation side, I think it’s much more interesting, and it will just be called ‘litigation.’ This is not an “AI-native case,” but a case based on understanding how we can use AI and technology more generally to better leverage our work and truly extend ourselves. ”
“There will be no robots, at least no robots who will be able to stand up in court and persuade judges, persuade juries and win cases,” he said. “The most protected part of the law is the end point: the person who does the advocacy, leads the negotiations, and makes the presentation to the board.”
In the end, Karcher described himself as “incredibly bullish” on how AI will impact lawyers and the legal profession. He noted that the practice of law is one of the longest-running professions in civilization and predicted that “it will never go away because the practice of law is how we mediate disputes.”
AI may eliminate certain tasks. More precisely, it may eliminate the ability of lawyers to perform those tasks and earn revenue. But Karcher believes this does not eliminate the fundamental needs of customers.
As Karcher said, “What remains? What remains is human conflict. Human conflict is not going anywhere.”
