Titan Law PLLC

The legal corners of social media are currently mid-meltdown because Kirkland & Ellis – the $10 billion-a-year legal behemoth – announced they are sinking $500 million into their own proprietary AI platform.  The pearl-clutching is largely centered on the word “proprietary.”  Apparently, a vocal segment of the internet believes that artificial intelligence is some sort of socialist utility meant to be shared like a public library or a communal garden.  They’re offended that Kirkland isn’t licensing their $500 million investment to the “little guys” or sharing the wealth with the latest crop of legal tech startups.

To those people, I only say one thing:  Grow up.

First off, let’s talk about timing.  Kirkland isn’t leading the charge; they’re late to the party.  Cleary Gottlieb and Skadden were building bespoke AI before it was cool.  Linklaters jumped in last week.  This isn’t a revolution; it’s a “me too” press release designed to keep the optics shiny.  If you dig a little deeper, they’re not even spending the money; they’re just committing it to internal resources.  They’re essentially getting rid of the word processing staff and replacing it with a handful of slack-jawed coders (who will ultimately be replaced by the same AI system they are building now).

But more importantly, people seem to view white-shoe firms like the cast of a legal drama.  They’re not.  You should view them as more akin to faceless, nameless clandestine administrative agencies.  They are the CIA of the corporate world.  They are paid to keep secrets and know where the bodies are buried for the people who make your cigarettes, your pills, and your missiles.  If the secret recipe for Dr. Pepper or KFC is anywhere, it’s sitting in a law firm file.

When your entire business model is built on holding the world’s most radioactive secrets, your AI must be proprietary.  That is non-negotiable.  You don’t plug the Colonel’s secret herbs and spices into a public ChatGPT skin and hope for the best.

But everyone is missing the only actually newsworthy part of this story:  How does a law firm make $10 billion in a single year?

It’s not because they have better AI.  It’s not even because they’re better lawyers.  It’s because of three simple truths:

1. They charge too much, and AI isn’t going to lower the hourly rate.  So, this investment is not about generating efficiency as much as it is about prolonging existing (profitable) inefficiencies.

2. They provide “plausible deniability” as a service.  Corporate executives love saying “yes,” but they love keeping their cushy jobs more.  If a project fails, they can point to their $1,500-an-hour outside counsel and say, “Legal told us we could.”   If they want to say “no,” they can say the high-priced outside counsel said it was too risky.  Either way, it’s not the exec’s money; it’s the shareholders’, and $1,500 an hour is a cheap price for professional survival.

3. Overspending is the standard.  Corporations aren’t punished for bloated legal bills.  They just point to a litigious society and move on.

The conclusion is simple:  Big Law is embracing AI for the same reason they do anything – to charge more while doing less.

For decades, big law firms have been billing 4.5 hours to draft a two-page memorandum they’ve already written 500 times for 500 other clients.  With a proprietary AI, they can now generate that same memo in six seconds and bill it to seven new clients simultaneously (while still billing for 4.5 hours each, by the way).

AI doesn’t change the bill; it just eliminates the inefficiency of having to pay an associate to type it.  That’s more money for the partners, plain and simple.  Plus, the newest generations of associates require perks and meetings and toxic workplace seminars and feedback and, ugh, just pass.

So, for those of you bent out of shape because Kirkland won’t license your “revolutionary” new AI startup tech (which is likely just a thin, poorly coded wrapper for ChatGPT), take a seat.  This is how the world works.  Big Law firms hold the secrets, take the decisional heat, and collect the checks.  They don’t need any specific technology to do any of that.

AI just makes the printer run faster.  And, for those of you who are slow on the uptake, what is that printer printing?  You got it.  Money.

Sick of paying a mortgage payment for an hour-long meeting with your lawyers, only to walk away feeling violated?  Maybe it’s time to re-think the way you handle your legal problems.  Contact Titan Law PLLC at blog@titanlawny.com.  And, don’t forget to follow us @titanlawny on Instagram.

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