DAN
Welcome to Sound Business Insights. I’m Dan Watkins. This episode’s about Do We Love ai? Absolutely. This podcast is not intended to provide legal advice.
NEIL
Dan, this podcast is about AI and the law. Can you give me your perspective on AI from just a long-term Sky view
DAN
Perspective? Sure. Well, as a lawyer, I’ve been researching information for 35 years, and if you count college and law school 42 years. And so AI is just another program to get us faster and faster access to all of this information. Computer geeks like to call it data, but it’s just information. And so remember when you were in college and you had to go research to the library and they had a Dewey decimal system?
NEIL
Absolutely.
DAN
Well before that, all they had was just whatever the librarian wanted to categorize things at. So then they came up with a national Dewey Decimal system, and that was a program before computers on how to access information data. And then we moved forward to college and they had written papers and treatises, and then all the books came out with outlines, and then a lot of the books and textbooks came out with indexes, keyword indexes.
And so that was a marvelous step forward, made our research faster. They had glossaries. Then I go to law school and they have, all of the legal books are organized with key keywords. One of the main publishers of these legal opinion and legal opinions of judges was West Keyword indexes. And they published a lot of the Supreme Court, Appellate Courts, all the opinions, and they would be official reports and you’d research them in the law library and they had a keyword system. And the way they did that was they divided all the legal issues into 400 categories and they would’ve a key number. And then next to that would be subcategories, another organizational system. And you could go by those key numbers and find everything near or around or related to that legal subject and you’d find it faster.
NEIL
And at first, that was in a book, right?
DAN
Right. It was a book of keys that had a little diagram of a key next to it.
NEIL
And every legal firm had a huge library of all these books.
DAN
Right. Massive libraries used to judge a law firm by the size of its library.
NEIL
Yes,
DAN
Because you didn’t want to have to send your associates down to the local county law library or to the local law school with their massive library. Our law school had like five floors of legal materials. So then came legal research, a company called Lexi Nexus. It’s a big company now.
It does everything. It has data information, and you had to do something called a query, come up with a term search, kind of like the west keywords, but only in a query. And you could have one or two or three words, and you had to know how to put the right punctuation next to it to get it to search and do different things. And you could find those keywords and all of the laws and all of the opinions and anything else they want to put in their database information and it would pull that up on the computer. The first one was this massive computer in the law library with the big keys. And you had to get a time where you could use it.
NEIL
You had the terminals,
DAN
You had to wait in line and get on the schedule a week in advance to be able to get one hour on the big computer. And so as we moved forward, remember Y2K,
NEIL
Absolutely.
DAN
Everybody was afraid because we all implemented computers in the nineties and eighties. Everything was going to crash because of Y2K. It didn’t. Jan 1, 2000 came and went. Well, people are afraid of AI right now, aren’t they?
NEIL
Yes, they are.
DAN
They are. It’s just another better program and it’s only going to get better, but it’s a program to access information faster and to use more words. It can recognize things faster, probably because they made those chips that are faster old computers probably couldn’t even handle a program like that. My first computer was a 386 IBM. I think my phone has 10 times that right now.
NEIL
Oh yeah. Thousands of times. Yes. Not even close.
DAN
So they had the programs and everyone could access your law library on your computer at your office. All of a sudden, smaller law firms and every law firm around the world could do the same thing and you could access all that information. That gave us a lot of time to talk to our clients. And we did. And we got much more information from our clients to help their cases or help their sales or mergers or whatever it was. We had access to forms on the computer. We had access to everything. And every lawyer in America became, and around the world became excellent at typing. You didn’t have to type to be a lawyer when I became a lawyer. You just had someone else do your typing. So everyone’s typing, everyone’s doing everything. Then came along dictation on your computer and back in the late 1990s, early two thousands, some of our lawyers have been dictating into the computer, dragon Speech, all these other programs, and they were great. Everything’s been progressing to this point of ai. Now, we used to have a joke about lawyers who were much older than me who refused to get email. Remember when email came out?
NEIL
Oh yeah, absolutely.
DAN
You cannot email me.I refuse to get email. So we call those dummy dinosaur lawyers. They don’t want to email. They don’t want to have people communicate with them faster. They don’t want to do research. They go to the law library and do their own research, and it takes them all day to do the same thing that some young associate can crank out in 30 minutes. But that’s the way they learned and they don’t want to change. It scares them. Right. Well, we’ve been the opposite of that. We grab every technology and we go in the oldest lawyer here and the youngest lawyer here, we jump in feet first, mostly because we do business, law, business, employment, and real estate.
(06:58)
And when you do business at law, you compete with larger firms who all have the same technology. We’re not going to have our clients at a disadvantage because we’re using the latest, greatest technology. So we handle that as well. And every good size firm has a calendaring system. You have a document management system, and you have a legal research system, and you have the ability for all your lawyers to be able to be available and look at your file no matter where they are on the planet. And that’s our law firm and that’s what every other large law firm in town does too. So we think technology and AI is an advantage for our client. We’re going to have it.
NEIL
And AI makes us better as lawyers, as a firm. It makes us better in court and out of court.
DAN
We don’t want to be dummy dinosaurs. Absolutely. So let’s get to AI. Let’s talk about what AI is.
NEIL
So Dan, in a nutshell, from your perspective, what is AI in our context?
DAN
Great question; from my perspective, because this is what a lawyer will be thinking about AI if they know how to use ai, right? If they don’t, they’re going to tell you how bad it’s,
(08:21)
But we think it’s great. AI is like these other programs, and if your lawyer’s up to speed, which they should be on emails, communications, text messages, computer research, which they should be, then this is just a transition for them. It’s not much of a change because AI summarizes the law we already know. And a lot of our time is spent with clients trying to educate them on what the law is. So when a says, I used AI and I asked about my case, first thing we say is, you didn’t mention your own name. Keep it anonymous because AI gets shared with everybody on the planet.
(09:06)
And so sooner than later, they’re going to be able to track everybody’s AI prompts and it’ll come back to you. And smart lawyers like myself will be searching around to see if we can find anything on our opponents. So be careful what you put in there. Make it anonymous, hypothetical, whatever you want. But use AI because the hundreds of dollars an hour, you pay your lawyer to explain what the law is. You could already have an understanding of what the law is from your questions to AI and save a ton of money. Then we can spend your time talking about the nuances, the important details of your specific case and how it changes. Because unless you’ve gone to law school, you can’t ask yourself questions that we need to ask you to get to the really important details that may make your case wonderful, or Oh boy, we’re in trouble.
NEIL
We can focus on the facts and the chronology of events and what comes out of those sequences.
DAN
The more you’re allowed to talk to your lawyer about you, the better we can do representing you. I love it when I can have a client into my office and talk to them and they just talk and talk and talk and we listen. We take notes, we get all this wonderful information, and then if we’re in a litigation, we crush the other side. If we’re in a transaction, we know what’s deal points to push, what’s deal points to go soft on, go easy. What you really need in the deal, where you are in your life, all the background, all that information about you is gold for us lawyers when it comes to being successful and what we do. So use AI. Let’s talk about what AI is. Alright, from a lawyer’s perspective, AI is all these programs just like look it up on Google, but it’s faster.
(11:00)
And it summarizes answer to your question. It should be a called a query, but now it’s called a prompt. I guess the marketing guys wanted to call it a prompt to make it sound different. And it’s working and there’s so many AI services. Please be aware that if you put your AI request into a chat, GPT, Gemini, Coda, runaway Forecast, or any other AI services out there, there are dozens of them, you’re going to get a different answer to every question. Not identical. They’re all going to be a little bit different because let’s be honest, there’s billions of website out there. They’re looking at different data, different sources. Remember we talked about data and
NEIL
Information? Yes.
DAN
Right. Well, we’re kind of going back to before the Dewey Decimal system where we don’t all look at the same chapters and the same groupings of information to find answers. It’s going all over the place, and it’s looking at random websites. And I’ve looked at opposing counsel’s website and their law, and some of it is just wrong. It’s old. Maybe the court of appeals has changed the law and they haven’t changed their website. Well, that’s where all these AI engines are going to find answers to your question. So some people call them hallucinations, illusions, I just call it, it’s a public database where anyone could put in more. It’s like WikiLeaks. You’re getting information from anonymous sources who are putting in what they think the answer is. And WikiLeaks is correct a lot of times. A lot of times it’s not. Yes. Have you ever had a friend tell you that they got something published on Wikileaks?
NEIL
WikiLeaks? No.
DAN
Oh, I have. And they laugh and they joke, I got this on WikiLeaks took my answer. I go, was it right? No. And they brag about it how they got away with something. So it’s really good. It’s 60 to 80%, right? Maybe 90% right. And it educates you. I just don’t believe it all. Yes, it’s good for you, it’s great. It’s fast. Maybe you check those little sources on your AI box to see where it goes, to see if it makes sense, because you can go down a weird website,
NEIL
But it allows you to come up to speed so that as you approach our firm, we can engage the conversation at a much higher level.
DAN
That’s right.
NEIL
So Dan, there’s an argument going on of your AI is better than my AI, and which one is the one to depend on? And do we go public? Do we go private? Do you have a take on that?
DAN
Yeah, public versus private. That’s it. AI private is back to the Dewey decimal system where we only use information that is from a published source. Now, as lawyers, when we go to court, the judge will not accept legal authority from some random guy’s website. There are rules of evidence, rules of pleading practice. There are strict rules of what counts and what doesn’t count as reliable argument and reliable law.
(14:12)
Code sections are reliable. Someone’s opinion about the code section, not reliable. When the court of appeals here’s a case and they say, this is going to be new law, they vote as justices of the court of appeals whether to publish that opinion to make it the law of the land. And when they do publish it, the publishing means US lawyers are allowed to cite that to a judge as the law of the land telling the judge this is binding on them. So private public, public ai, good to know what people are thinking. Private AI is what we use when we ask our AI engines to give us the answer that we could set right in front of a judge. So that’s how good AI is getting. We still don’t trust our private AI completely. Yes. That’s why it’s important for us to be able to go back and do old school research and double check every AI opinion we get.
(15:17)
And 95% of the time, our private AI search engine that we pay for and pay a lot for is much better, I would say more accurate for what we use. And actually we shouldn’t even say it’s better. It’s different because as a lawyer, you should be able to come to your lawyer and say, okay, this is what I know the law is. This is what I think. But when a lawyer submits it to a judge, it’s the lawyer’s job to make sure it’s accurate and reliable. It’s not the clients, it’s our job. That’s why we have these tools to make sure we get it right. And so we do. And it saves us time, it saves you money, and it gives them a big advantage.
NEIL
So far, what we’ve learned is AI isn’t something that we fear, it is something that we’ve embraced. It actually cuts cost from the time we used to spend digging through research and makes us more efficient in our job, and yet there is still work to be done. That doesn’t mean a person walking down the street can practice law. It means we have the ability to get to answers faster. We have more information available in an easier format to access, and yet we still have to do the work to format that information before we submit it to the court.
DAN
Exactly. That’s exactly what you should be thinking about. Ai. Even lawyers need lawyers. You know what they say,
NEIL
Right? That’s right.
DAN
A lawyer is a fool for a client. You represent themselves.
NEIL
That’s Abraham Lincoln. That’s been good for 200 years.
DAN
Yeah, and it’s true because AI is a wonderful tool that professionals use. Engineers use it, doctors use it. Everyone’s using it because it’s fast and it looks at data or information faster than other programs. And if it wasn’t called ai, it would just be called super fast research with these new chips out there that can handle much more data and can really spit out answers that are fast. It’s still our job to catch it and we’re catching it. Oh, another problem. If your lawyer doesn’t have AI and the other party you’re suing has ai, you’re losing,
NEIL
You’re at a disadvantage out of the gate,
DAN
Right?
NEIL
Yes.
DAN
They can make your lawyer do way more work and bill you way more money because they don’t have access. And that brings me to this other thing about AI that your average client on the street is not going to have is we don’t use AI just for research. We use it for our document management system. So that means we can go into our AI system and say, here’s all the information we know. Here’s what my client’s being sued for. Please print out a sample of discovery questions, interrogatories, request for production documents based on their complaint so we can review it and send it to them right away and make them start answering questions about why they sued my client. And AI does it for us. You see, we have AI in our document management system
(18:41)
And we have AI in our calendaring system and AI connected to the court’s calendar and AI in almost everything we do at our firm. We started remote work 15 years ago with different employees and attorneys. So we’ve been using computer technology for a long time. And so when the other side has to respond to discovery, could be a hundred questions, 200 questions, the lawyer has to go in and type answers to it, or the lawyer and a word process or a paralegal have to go in and type answers to it and charge their client. Our first draft is being drafted by AI and we’re just editing, which gives us a big advantage. Now, we don’t agree with all the questions AI tells us we should do.
NEIL
Yes.
DAN
But it’s connected to our research library. It’s connected to all the pleadings in our system, and it’s connected to all the law that we have in our private, not public AI system. So that means no one else can hack it. It’s not connected to the worldwide web. No one can hack it. It’s attorney work product, and it spits out information for us in seconds that we start reviewing and editing. So you don’t have to pay your lawyer for as much word processing as you would at other firms.
NEIL
And our attorneys are experienced, Dan, and so you as an attorney, if almost 40 years when you’re looking at what AI is spitting back to you, okay, 80% of that is really good. I can use that. And the other 20%. Yeah, that doesn’t really apply or I don’t like how that’s written. I’m going to change this.
DAN
Let’s be honest, litigators at our firm, we’re competitive. And if we see that we can be faster and stronger and we want to win, we as every single litigator here, above all wants to win their cases and they don’t get paid extra money to win. They don’t get any bonuses for anything. They just want to win. It’s like a thorough bed. It’s a racing season. Soon they want to win for you. That’s it. So if we can do things faster and quicker and better and give ourselves more time to talk to our clients and get more detail of the facts of their case,
NEIL
You’re ready to present a much better argument,
DAN
We’re going to win. That’s what they really want. They don’t get a bonus for winning. They just want to win. So having ai, we knew immediately, I don’t have to sit there and worry about whether I got all the prompts or the word processing program. It just spits it out. And we start editing and then we can ask better questions. Our time can be spent on, oh, how can I ask questions that the other side really doesn’t want to see? They don’t want to answer. If I ask it this way, it’ll be harder for them. And plus the other side’s doing it to us. A lot of the firms we’re going against have this same technology. So not to have it as like you’re just telling, you should tell your clients, I’m probably going to lose because I don’t use ai.
NEIL
So Dan, basically, AI gets us about 80% of the way. It really saves our clients time. It gets us further faster. Why do you still need a lawyer? And what is it that a lawyer can do than an AI application can’t?
DAN
Great question. And that is sort of why I went back to the beginning of how legal research and the practice of law was, because we can call it ai, but it’s just computer research. It’s just computer word processing. It’s faster and there’s more data. It’s more sophisticated, right? It’s more intelligent. Exactly. Now, when you go to court, they have something called reliability in evidence. And in the law, you can’t cite AI to a judge. They’ll throw you out. You can cite ai, private ai, but it has to be something the court accepts. So reliability is really important because the rules of evidence in court want absolute reliability. And that in reliability means that we’re all going to play by the same law and we’re all going to apply the same law. We’re not going to just cite sources, third party sources, secondary sources that are not deemed reliable. And the rules of evidence are massive. So we have to have education of our clients on what is the law and what is not. And if they’re getting 80% of it, that’s a lot faster and better and easier for us to take us the next 20% there. It’s just a quicker learning process. It saves money and it makes our clients educated in the law and what’s relevant and helps us do our job. We’ve been doing computer research for a long time.
(23:37)
This is computer research. You can call it ai. You can do whatever you want. And it’s all the other steps we talk about in Dewey Decimal system. All those things are just bringing information that’s easy to use and faster.
NEIL
Why did they still need a lawyer?
DAN
Well, because what’s relevant and how you apply facts to law is something that your lawyer is either good at or bad at. And if you have a big case, it could be devastating or wonderful for you. And if you go to trial, remember people are still the ones who decide your fate.
NEIL
Can AI select a jury?
DAN
No. No. I mean, it could help with a jury selection.
NEIL
Yes.
DAN
I mean, they have jury consultants and they could do things, but when you are in a jury trial or a judge trial, you’ll have to remember that the jury and the judge are looking back at you. So you are not judging them. They’re judging you. So if you are having some computer or some analyst or someone provide questions for you, you have to do it in such a way where you’re sort of a performance artist as well. So AI is something you use ahead of the trial and helps you come up with questions. And maybe the answers can be fed into AI as to what its analysis is, but you’re just relying on whoever the software programmer was as to what they think a good answer is.
NEIL
And then a mediation where you’re on the fly, you’re reading people in real time and you’re responding to what’s being said. This isn’t a place for AI. This is a place for experience and knowledge.
DAN
Well, it’s a place for ai just like it’s a place for computer research. AI is just fast computer research, those little, what do you call those keys at the end of your AI answer, and you click on those. And those are the sources that uses, well, private ai. Ours uses a source that I can quote to the judge.
(25:47)
Public AI uses a source from Joe Schmoe’s website. AI is a tool that we use, and it’s also a tool that our clients should use to better communicate with us because a smarter client is a better client. Now, we’ve been dealing with computer research for 25 years and clients have done their own computer research and asked about it, and those are the best clients because they know about the law and they’ve read some articles and they’re wonderful. So yes, use your computer research if you have ai, use AI and come in and talk to your lawyer because there aren’t things that AI can’t do such as Well. They can’t anticipate tone in a deposition. Like when you’re talking to your spouse and they say yes, but they really mean no.
(26:44)
And so same things kind of happen in a deposition. You’re taking someone’s deposition and the court reporter is writing it down and it’s not on video and it’s just being transcribed, but you can see their facial expressions. It tells you as human beings, I need to go to this place. Or you’re defending a deposition and you see your client answering and they’re looking at you and they’re making a face. You need to do something to take action because they think something’s wrong with their case or there’s something to be said. There’s nonverbal communication. There’s all the nuances. Remember, litigation is just the threat of being put on the stand in front of peers of your community and seeing if they believe you. It’s a big threat. Nobody wants to be there except us. And AI can’t do that. AI can’t do it. They can’t replace how people are going to react. How many times have you watched the news and said, I can’t believe P Diddy got off. I can’t believe he didn’t get life in prison, or I can’t believe this verdict because people are unpredictable. I used to have a saying, a little joke about trial. I’ll give you a hundred percent chance of winning, but there’s only a 50% chance of that.
(28:05)
We have the greatest cases. I can’t see how we’ll lose. What are our odds of winning about 50 50? Because you just don’t know how juries are. I can sit here and tell you stories of all the jury trials I’ve done, and jurors come up and you think they hate you, and they’re like, I thought you were great. And I’m thinking, why were you giving me that mean look for five weeks every break, you’d look at me in the hallway and scowl at me. So you just don’t know, right? So it’s unpredictable. People are unpredictable, and AI can’t handle that. You can’t read a room at mediation when you’re negotiating with someone and they start complaining and complaining. Sometimes they’re really upset and sometimes they’re just inviting a counter offer. How do you know? Right? Experience. There’s also something in psychology. If you’re a trial lawyer, you should know about psychology. There’s confirmation bias. AI can’t come overcome confirmation bias. AI can’t talk about something unrelated to relax the room and then go for a point to win the case. It won’t know how to do that. It won’t know when to get an argument with opposing counsel. It won’t know when to object, when you don’t care or when not to object when you could have. So those are a lot of things. It doesn’t understand what’s important to your client.
(29:34)
So we don’t want AI to be interviewing my clients. The confidentiality of the attorney-client privilege lets people say things that might not be flattering to themselves or express things about their life and what’s going on in their life and what’s so important and have another human being address what they should do and how I should react and how I can be a champion for my client and what they really want. So there’s so many things it doesn’t do. It doesn’t handle your risk tolerance. It doesn’t know what that is unless you can put down a percentage number to what your risk tolerance is. It goes on and on and on. So for example, a client asked Che, GBT, write me a termination letter in a mean tone or an aggressive tone or whatever tone. That termination letter becomes evidence and you’re a wrongful termination trial because you didn’t write it correctly, or you didn’t call your lawyer and give them all the facts and tell them whether you are really ready for a wrongful termination case or whether it’s really necessary to give any reasons at all. So generally, we try to tell our employer clients don’t give any reasons if you don’t have to. It’s like talking to the police. You’re just confessing. So anyways, that’s why AI is great, but AI can’t do a lot of things.
NEIL (31:01):
Dan. I love AI. It’s a really productive tool. So what kind of things are you using AI to do? Where’s it really helping?
DAN
It helps in so many ways, but let’s hit some fun specifics.
NEIL
Yeah,
DAN
We do transactions law. We negotiate contracts. We review contracts, and we send drafts back and forth and back and forth, and our word processing team or our lawyers have to look at them and review them and make sure somebody didn’t slip in a clause,
NEIL
Right?
DAN
That’s Different. Right now we have red lines for that and software programs and things like that, but we also use AI to do contract comparisons.
NEIL (31:41):
Yeah, what’s different?
DAN
And it does it magically because sometimes you don’t get the cooperation of opposing counsel to do a red line, and sometimes you don’t trust them. They really do the red line correctly, especially LA Council. Is that bad to say?
NEIL
Not in San Diego.
DAN
Not in San Diego. But yeah, so we love the contract comparisons. It just boom, it’s out just immediately. And we love that. We love it spots. If we ask to spot certain different kind of clauses, it’ll go through our computer database, our private database, which is 35 years of contracts that we’ve drafted. We’re talking hundreds, billions of dollars of contracts, of mergers, acquisitions, purchases, sales, 35 years of contracts. It reviews them all. It’ll tell us, find a clause like this, find a clause like that. And we also pay for transaction guides and all sorts of programs that give us sample agreements and what the Court of appeals or Supreme Court have said about those types of clauses.
NEIL
Yes.
DAN
So we have the private computer data and our own library of clauses, and it’ll pull from all those and give us a clause that we might not think of on our own at the top of our head because doing transaction law is your client comes in with a deal, they got a letter of intent, a memorandum understanding, and then somebody drafts an agreement that’s probably well known. We’ve all seen these agreements out, and then we negotiate about which clauses should be changed, and then we use our library and AI just goes boom, boom, boom, boom, and grabs it all. And we get five options that take, look at this, and then we go to our files and find out what the facts behind it are. So we have access to transaction work that is just wonderful.
(33:40)
Love AI for transactions. We get discovery from opposing counsel. You’ve all seen the movie where they bury you with 25 boxes, right? Absolutely. Our printers here, our copy machines that they call them, they cost more than my car, and if they won’t do it by computer. Now, local rules say you’re supposed to deliver your discovery by computer, but if some old guy who doesn’t have email dummy dinosaurs decides to bury us the old school way, we scan it all through and AI will go through and check all the documents for any prompt we want it to check for and catch anything that’s important and save us dozens of hours of billable hour time grabbing information. That’s really key. All the litigators here, just love that because we can’t get buried. You can’t bury us and force our client to settle because you sent us a bunch of documents we have to review. We’re defensible to that tactic. You have to beat our clients on the merits and good luck with that.
(34:44)
So we love it for litigation. Again, in transactions, we have something called due diligence. When do we do an agreement? Two companies want to merge or they want to buy something. Everybody has to send their schedules of this information and that information, and it can be voluminous. We have AI scan it all and do quick summaries of it to see if anything catches our eye. We still look at it, but it’s another tool to find out what’s going on. It’s not magic. It’s a system. Our ai, here’s one I really like is in litigation. We have a complaint come in, it’s 65 pages long, it’s got 18 causes of action, and it’s got all kinds of facts put in there, and there’s all kinds of witnesses, potential, and they’re alleging that we did all these things wrong and our clients are saying, no, we didn’t. We have a program, a private program that our AI team drafted for us that takes the complaint, spits out a sample answer based on our forms with all of our firm of defenses that might apply for just a draft and spits out the first set of interrogatories that we would normally have to build a lot of money for
(35:58)
That we can edit and review, saving word processing time, and giving our lawyers a list of questions they should consider to ask the other side, and we can get those discovery questions out. First, gain an advantage in the fight. We love ai, right? Who wouldn’t love that? If you’re a competitive minded litigator, you want to win,
NEIL
Literally beat them to the punch,
DAN
Literally punch them right in the face before they can even think about draft and discovery. They think they put you on your heels with this long complaint. What do you have? Boom, right back. Within two days a day, you can spit out 500 pages of interrogatories and request for production of documents and request for admissions all drawn from their own complaint. So yeah. Do we love ai? Absolutely. Do we use AI all the time every day?
NEIL
It makes us better.
DAN
Yes, it does.
You can learn more about the Watkins firm on our website at https://watkinsfirm.com or call our office at (858) 535-1511.