The Future of Law: AI, Innovation, and What It Means for Your Firm with Ernie Svenson

Ernie Svenson: And this is a human nature thing. It's very easy for people to look at another tribe or another group of people and see the implications over there, but not see them in their own realm. “It's hard to get a man to understand something if his salary depends on his not understanding it,” the famous Upton Sinclair quote.

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Melissa Shanahan: Ernie Svenson, welcome to the podcast.

Ernie: Oh, it is so great to be here and to see you again, Melissa. Thank you for having me.

Melissa: It's been way too long. You bring a smile to my face, and I look forward to every conversation I get to have with you. So, delighted that you're here. For those who may not know you, which would really shock me, but maybe there's someone out there who doesn't know who you are. Will you just give a brief introduction into who you are and what you're into?

Ernie: So, I am a senior lawyer, if you will, because I've practiced law for 20 plus years. I practiced most of that time in a New Orleans firm that was mid-sized. So it had all the hallmarks of any larger-sized firm, lots of bureaucracy and wonderful people, but wasn't well-positioned to take advantage of technology.

And I was becoming paperless in around the year 2001. I was also starting a blog and embracing the internet, and I just saw all this potential, and they weren't really capitalizing on it.

So in 2005 after Hurricane Katrina hit New Orleans and people were thinking like, I need to do something different, I went out on my own, and I was very apprehensive because in theory, technology would make me efficient, and in theory, the web would help me get clients easily, but I wasn't sure if that was really going to be true when I jumped out of the tall building onto the ground to be a solo. 

So, it did work out. A lot of solo and small firm lawyers wanted me to explain to them how to do what I was doing. I got invited to speak, appear on podcasts. And so a big snowball started rolling, and then I found myself doing the helping of lawyers with technology more than the practicing of law. I also found that I enjoyed that more. Surprise, surprise. And so I went all in. That's what I do.

It's what I've been doing for over a decade. And I like it. I get to talk to lawyers that are nice lawyers, that are receptive to the things I think matter. And we have nice conversations, which was not always the case when I was practicing law. So I live in a good, nice place now.

Melissa: You are someone that there's a term that comes to mind when I think about you and your community, which is useful or helpful. I think about that. I strive to be that for the people I have the privilege to work with, and you just strike me as someone who's got that nailed. And I think the reason that's true is because of how easily you connect with law firm owners. There's very much a roll up your sleeves and let's dig in to the conversation and to the real meat of what matters when it comes to technology, automation, and now the conversation has been changing over the years and is really gaining momentum. And it's just the beginning.

So, I think those conversations are so needed. So, I yeah, anyone who's a part of your world is really going to benefit because of the active engagement by you. And this is a deep interest for you. That's one of the reasons I love talking to you is in all the best ways, you like to nerd out about this stuff. So you're really fun to talk to because of that.

Ernie: Yeah. I mean, I like, I like talking about technology, but really underlying it, and this is something it took me a while to realize, this is actually what I want more, is I like talking to people in a non-pretentious, hey, here's how I see it, how do you see it? I like having those conversations.

And unfortunately, a lot of law is, you have to assume airs, there's a lot of formality. And a lot of people get wrapped up in that, and then they forget how to be down to earth and straightforward. And that creates friction. It creates conversations that are stilted and not as useful because, yes, they need to be useful.

And whether it's technology or helping lawyers manage their practices, which is what you do, it's just about, hey, here's what I know, here's some good advice. Let's talk about how to follow it instead of all this pomp and circumstance. But that's what there is in a lot of professions, including law.

Melissa: Yes, true. True. I think just to further hit home that point, your ability to listen is directly correlated with how useful you will be. And I think that you do a very good job of listening to people and their barriers. Some of them are so repetitive that, you've heard the same ones over and over and over. I am curious to get into a conversation with you about what you're hearing on, some of these maybe new that you're digging into, the barriers that people are experiencing. So it'll be, it'll be really cool to hear what you, what your thoughts are there.

I guess, to start, my plan, and just so everybody knows watching this, is to maybe do two episodes with Ernie. And in the first, I really want to start with a LinkedIn post that you wrote, wrote, just recently, a couple of weeks ago. And it was after listening to a talk at ClioCon with Richard Susskind. And your takeaways from that were distilled down really beautifully in a LinkedIn post.

I have it in front of me. It probably doesn't make sense to read it all, but there were some things that stood out to me, and I told you before we pressed record, I read that, I reread this twice. So I read it, and I read it again, and then again, because of how beautifully it was written and how clear it was on what the future holds or how, how you need to be thinking about the future. And it was done so succinctly. So, it's a beautiful piece.

I know that you used AI to get you started on this, and then of course, you finessed it. But yeah, if you want to share maybe a little bit about that talk and the impact it had on you. And what made you want to write this post?

Ernie: So, it, I knew it had a big impact because I was in the room with 2,700 or so lawyers who were all hearing him talk about AI and its impact on lawyers. And Susskind is somebody I've followed for a long time. Like when I worked in the firm, I was reading his first book that came out, and a lot of his predictions seemed crazy and certainly weren't the kind of things I thought lawyers are never going to accept what he's saying. But over time, everything he's predicted pretty much has come true.

And so when he was giving this talk about AI and the impact of it, he's walking you through the evolution of AI, what the people who are participated in making it happen understand to have been happening and now what they predict is going to happen and the consensus of these people who are not, people on the sidelines, they're in the mix.

So when there's consensus around what they're predicting and one of the big items was what's called artificial general intelligence, which is when we get to the point where this AI stuff can not just do selective things that it's learned about, which is now learned a lot, but when it can just start learning anything that humans do and do it equivalently or better than humans, like anything. It just learns everything that it needs to on the fly, and now it's better at any job that a human could do.

And people had been predicting that would happen in like 20 years, maybe 50 years. And Susskind walked through and said, Yeah, no, like when after ChatGPT, now those people are saying like 5 years, 10 years. And that has a lot of massive implications, which he then walked through. And we can talk about, but the net result was lawyers were very palpably unsettled.

And Jeff Lewis, who is in your coaching program, he was there, we were talking after, he's like, I felt like I've been gut punched. Like, yeah, I can see why because he's saying that lawyers are trying to outrun AI or compete with it. That's not going to work. What's going to be required is something much more radical and thinking in a very innovative way. So maybe that's a good place to stop.

Melissa: Yeah. No, that is. I mean, he, Jeff Lewis, wrote me a message afterwards. I asked how ClioCon was, and he wrote me a message and said, it was amazing. Also, we have got to rethink everything because what did he say? AI is putting my job and yours in jeopardy. And, and he's right. So all the all the things we're going to talk about today, which we're talking about lawyers and their firms, I am thinking about too for, I think any business needs to think about these things.

And so, I, it just, it was, it was very clear how impactful it was for him. And I like that because, some lawyers, law firm owners, get stuck in a way of thinking that they're resistant to change because it's working. But that can't, they cannot cling to that. And, you know, Jeff, I think if there was some of that in him, it was shaken loose at this conference, which was refreshing. You know, I think we all need to be very open and creative and thinking outside the box and having conversations. And many of which you facilitate these conversations.

Ernie: Yeah, and Susskind said, you know, he could be wrong about AGI coming in 5 to 10 years. He said, but it would be a mistake to not plan for that to happen in that time frame. So that was basically it, like plan for it because something's changing and it's going to change in an unsettling way. So it's better to confront it with a shorter time horizon than a longer one.

Melissa: Yeah, absolutely. So I have your post in front of me. I loved that, I listened to Jeff Lewis did a podcast episode and we talked about this and he talked about, which you referenced here, the Black and Decker lesson. Nobody wants a drill, they want a hole in the wall.

He was also talking about a group of neurosurgeons that Susskind talked to, maybe 10 years ago or so, and neurosurgeons were essentially saying, our jobs won't be in jeopardy. Do you want to share a little bit about what he's thinking in terms of maybe how their jobs would be in jeopardy?

Ernie: Yeah, so he walked through that there are like some myths that people have around AI where they'll say, oh, we see it having problems now, and so that's a problem forever. He's like, no, it's a mistake with technology to think about what can be possible in the future depending on what's not working well or what's happening now. So that was one of the myths.

But the other one, which is the neurosurgeon myth, is the “not us” thinking where you say, oh yeah, sure, of course, that'll happen to those other professions. He, Susskind said, and this is a human nature thing, it's very easy for people to look at another tribe or another group of people and see the implications over there, but not see them in their own realm. “It's hard to get a man to understand something if his salary depends on his not understanding it,” the famous Upton Sinclair quote.

So it's something along those lines, and it's true. Like we don't want to face the reality. So we find ways to minimize the problem. And again, Susskind is saying, maybe he's wrong. Maybe it's not exactly the way he describes it, maybe it's going to take a little longer. But those who are going to be best positioned are the ones who take it seriously now and take it hyper seriously, maybe even over seriously. They'll survive, or they'll do better. But the ones who wait, thinking, oh yeah, at the last minute I'll catch up. No, that's not going to work.

Melissa: Right. The neurosurgeon piece, there was something about, you know, what if in 25 years, you look back at the way you work now, and the genuine thought is that it was barbaric how you used to work because of what AI is going to be able to do without the same level of destruction in order to create a result.

Ernie: Because he because yeah, because he was saying people don't want neurosurgeons just, and they don't want lawyers either. Whatever problems we're fixing, they don't want those problems to exist. And they, or they want them to be very minimal.

So yes, they don't want neurosurgeons cutting on their body. They want there to not be a problem at all, or maybe they take some pill that makes it go away instead of a neurosurgeon fixing it. And as AI helps medicine find cures better and faster, and helps legal disputes be resolved faster and better, we're not going to be doing the same thing, but more efficiently. We're either not going to be doing anything at all, or we're going to be doing something radically new.

Melissa: Yeah. Yeah. You wrote in the post that Susskind gives lawyers two choices. One, compete with the machines, which is a shrinking, losing battle. And two, build the systems that deliver desired outcomes. So, following up on what you were just saying, people don't want to have the problem that they have.

He predicts the winners won't be traditional lawyers. They'll be legal knowledge engineers, data scientists, and no-coders. Those are tomorrow's lawyers. That sentence struck me. I have underlines on it. My eyes kept coming back to it, that I think to sit with that sentence, what I, what comes to mind for people, what new conversations that they begin to have if they were to take that sentence very seriously. I'd love to know your thoughts on this sentence, if you have anything to expand on.

Ernie: Yeah, well, it's, it's pointing at a general direction, and so you have to speculate as to how it's going to all unfold, and when I say you, that you, me, Richard Susskind, everybody. So he's not saying, Oh, here's a very clear path that we can see is going to happen. But he used those examples and a couple other similar ones to say it's going to be more about using technology to help solve the problem or avoid the problem than to use technology to be more efficient in doing it in the same method that we've been using.

So I can think of an example of how we could radically innovate dispute resolution, which of course, if I say this, lawyers are mostly going to go, that's crazy, that'll never happen. But that will be true only if people who are stakeholders in what happens with dispute resolution don't have input. And lawyers are the ones who mostly have input.

But what if the world changes radically, and we already see this now like with mediation and arbitration. So what if the dispute people, the people in dispute, say, you know, we're going to try some kind of arbitration, but it's going to be different. It's going to be like this. We're going to upload all of our documents that aren't privileged to the central place. The judge or arbitrator, mediator is going to use AI to parse through it and come up with a preliminary assessment of what the result should be based on all of this information, depositions, documents, explanation of what the issues are. And then the lawyers react to that and say, Oh no, that's a little wrong or there's some nuance here.

That's the first place I think it's going to change in dispute resolution because the people who have the disputes want them resolved quickly, effectively, and they don't want to pay more than they need to. And if you could get fast forward through all that back and forth and arguing about the relevance and all that stuff, if all that gets done faster because of AI, which it can and will, and if they work out the problems where there's mistakes, they don't have to work out all those problems with the mistakes. That's what the lawyers will do. They'll say, Oh, you know, there's a mistake here, let's fix that. Let's fix this.

But that's what's going to happen. Now, what would keep that from happening as quickly? Well, if clients don't want to do it, they don't put pressure, if lawyers don't want to do it. You know, yes, a lot of human nature will resist that, just like the cab drivers resisted Ubers and other people resisted Airbnb and all these other innovations. But when there's a tipping point, then it suddenly changes, and the people who are holding on to the old way are the ones who get washed away like a tsunami.

Melissa: Yeah. Yeah, absolutely. It still blows my mind when someone actually takes a cab from the airport. I don't, it doesn't even cross my mind as an option. Somehow that still exists, but it's a thread hanging on.

Ernie: And there's a blockbuster still open maybe out there, and people still go in there and rent video cassettes. I don't know.

Melissa: Is there really?

Ernie: There's always some holdouts.

Melissa: That’s true, yeah. Okay. I, so again, that just really struck me. Knowledge engineers, data scientists, and no-coders. And I just imagine that when law firm owners are reading that sentence, or lawyers, any lawyer, reading that sentence, that feels scary because they don't look at themselves as knowledge engineers. That's not a term that they've ever used to describe themselves, many of them. Data scientists, no, no way. Law firm owners are not first and enthusiastic about data. So even that, I think probably sounds intimidating.

No-coders sounds like a technical thing. And I think some of this is just getting used to that vernacular, and that it's this is the way things are going. It doesn't have to look a specific way. These are descriptors for the way that people need to be thinking. They don't have to be an engineer. They don't have to be an analyst, and they don't have to be a coder. It's that's so anyway, I just thought that sentence really struck me, and I knew it was going to strike your audience. 

Ernie: Yeah, I think, so when I was at the big firm and I was starting to experiment with technology, one of the first breakthroughs for me in terms of doing what I did better was when I discovered this tool that was basically a relational database. It's called CaseMap. It got bought out by Lexis, but it's a relational database.

You know, you put your data into it, and the data is a record, and the record would be like a date, a thing that happened. You describe what happened, which would be something in a document or a deposition, and then the source would be, well, the deposition or the document or whatever. So with those three components, I could take all of the things I needed to process, and if I put them into this relational database, I could organize it in different ways on the fly, I could extract insights and knowledge, and use my knowledge in much more powerful ways. And that was a basic tool. That's like giving an account on a spreadsheet. It doesn't seem so monumental now because we're used to it.

But that step one, right, for me. So then when I started doing that, I realized, wow, I have an advantage over lawyers who aren't don't do this because we can only hold so much information in our brains at one time. So whatever you call what it is that lawyers do when they're going to use technology, we're knowledge workers, right?

We take data, and if you arrange it, it becomes informative and it becomes information. And then from information, you can use your knowledge or depend on knowledge, and then ultimately, wisdom is where you have instincts about how things are going to pan out in completely new domains just because you've acquired these knowledge.

It's like learning three languages; the fourth one is easier, right? It's that kind of thing. So that's what I think needs to happen with using AI. Treat it like a foreign language where you have to learn, and the way to learn is not to read articles about whether the language is good or bad or has flaws. It's not useful to study just verb forms. You need to go speak it. And if you speak it with other people, you acquire a knack for how to use it. And that's what Susskind is, whatever those classifications are, that's what's actually going on when the person's doing it.

Melissa: That is, it's like the same, you can't learn to swim by reading how to do it. You have to get in there, and it's very similar. And it also what strikes me is what I didn't have language for a moment ago when I was trying to explain the sentences, the identity shift that lawyers need to experience is the part, I mean this is what you're talking about in this post.

The other, the part of your post that I'd like to also mention, and then maybe on part two of you and I talking, we can talk more about how and who, and help for people who are waking up to this. You do say the market shows no loyalty when AI delivers better, faster results, just ask travel agents or cab drivers, which is sort of what we were alluding to a moment ago.

And then there's three phases that I think he talked about that you share here in this post. Automation was phase one. Interesting that it's was and not is because some people are just waking up. So, was phase one, which is doing current work faster.

The second phase is the innovation phase is phase two, delivering outcomes in new ways. And then the third is elimination is phase three, preventing legal problems entirely.

I would love to just hear you riff a bit on whatever's top of mind for you when we think about these three phases. But one question that stands out in my mind, and maybe we need to table it for a bit, but elimination is phase three. How do you imagine it might be possible to have a business that gets paid well to do three, number three? Or do you not see a path to that?

Ernie: No, I do. I mean, let's take an ordinary common example today. There are a lot of lawyers who do planning for workplace litigation and problems, and they advise companies about a bunch of different things related to the workplace. They usually talk to HR directors.

Those lawyers, because they see the problems evolve and they have instincts about how that happens, they can tell them, look, you know, if you really want to avoid the problems that are going to lead to expensive litigation, which I'm happy to do for you and make money off of, I think I can save you the problem by telling you, you know, nip these things in the bud, do this, modify that.

So that's a lawyer who's not getting the work on the back end doing litigation, but that same lawyer is getting the work on the front end, and they're earning the loyalty of the client. So it's better.

And I find that people who do employment law understand this, even if they do litigation, because they're not sacrificing the way to make money, and it's not distorting their thinking because they're just making it in a different way. I don't know that immediately is analogous in every other area, but it goes back to the example that Susskind gave, which is like people don't want the problem. They want you to help them avoid the problem. And they don't even want you unless you can help them avoid the problem.

Melissa: Right. No, that okay, that absolutely, that makes sense. Employment, just now, I've been working with an attorney that's reviewing my handbook and updating it with the law so I prevent problems. These things are really helpful. So, is there a practice area that you have trouble seeing how they would do this?

Ernie: That's a good question that I have not thought about, but like to estate planning, no, that's going to be, it's advisorial. There's laws that come into play, there's things that are going to happen. So you have to help people navigate that. I think every one of these has an aspect where you're in a position to tell people how to avoid problems or minimize them or minimize the cost of when they come up.

Like, you know, if you, I remember this is this is stupid but true example. A lot of my litigation that I did when I worked at the big firm, and even on my own, was contract disputes. And people say, Well, the contract said this or we interpret it this way. And you're great, let's get the contract. And you go get the contract, and this is from the corporate files, where these people are good at keeping track of the contract. And the contract would only be signed by one party. And I was like, well, we did, did both parties sign? Oh yeah, well then where's your copy with both parties' signature? Oh, we don't have that. Oh, well you know what? It's going to cost a lot more money now because they're going to dispute everything, right?

That's a simple thing that could be avoided. And I think probably now with electronic signatures, it probably is getting avoided because it just gets recorded. But yeah, you it's a lot of things going wrong in the weeds that lawyers don't care if they go wrong. They go great, I'm billing by the hour. Okay, well, I'll just put my head down, do my best to solve it. But the idea that you'd raise up and say, hey, listen everybody, stop doing this stuff that's earning me a lot of money because it's it's bad for you. It's good for me, but it's bad for you. Like that doesn't happen. That's the Upton Sinclair quote. 

Melissa: Yeah. Yeah, okay. Going back to the automation was phase one. And there's somewhere in this post, I read, I'm gonna paraphrase a bit, but you know, are you automating that something, something that should be eliminated?

And I went to a conference this summer, and the question was, a really powerful question was, are you optimizing something that should not exist? And I thought a lot about that for my business, and so when you say, you know, the first phase, automation was phase one. There are a lot of listeners out there that have certainly done some of that, but they know there's more to do.

And it strikes me that, based on what this post is saying, which is what Richard Susskind is saying, is that you can't hold your focus there anymore. So, even if there's more automating to be done, you have to be turning your head and looking in a different direction. Is that accurate, do you think? 

Ernie: Yes, well, the way I think about it is these three things are not necessarily sequential. They're kind of synergistic. So, Peter Drucker, the management consultant, famously said, there's nothing so useless as doing efficiently that which should not be done at all.

So this idea of not doing things that don't matter much or at all has been around, and I wouldn't say that automation isn't important and that we're past it. There's still a lot to be automated. It's just that if that's your focus and you're totally in on like, okay, let's make this happen faster and better, you might not be seeing opportunities to innovate in ways that don't depend on the automation or are going to be ready for when the automation isn't as important. And so all of those things, they go together, is how I look at it.

Melissa: Yeah, okay. That, great answer. That makes a lot of sense. People, I'll link up this post for sure in the show notes. People should go read it, check out Robert Susskind or Richard Susskind, and also what you're up to. And just before we end this episode, can you share with people what, what is, what are you focused on right now and how do people engage with you?

Ernie: Well, I run a community, an online community called the Inner Circle. Jeff Lewis is a member, and we have about 300 members, just under 300. And they're at different levels, they're at different places with their practice, but over the past three years, what I've tried to figure out how to do and apparently done well enough is make it so they can have conversations with each other, asynchronously through posts and comments, or in Zoom sessions, some of which are formal, some of which are informal.

And as they've gotten to know each other and feel more comfortable with each other, their engagement is better, which is better for everybody because the hardest thing for me as a solo lawyer when I went out on my own, and even when I was at the big firm, was finding other lawyers who were trying to figure out the things I was trying to figure out and have conversations about it.

And, you know, 20 years ago, you'd have to go to a CLE meeting, and maybe it was there for an afternoon or a day, but it was very fragmented the way you would learn. Whereas now with online groups, like Facebook groups, although I don't do this as a Facebook group, it's easier to just have these conversations constantly, asynchronously for the most part, from your mobile phone if necessary. And a lot of good comes out of that.

Melissa: Yeah, definitely. I mean, Jeff Lewis loves the community, and I mean, the fact you have 300 members in there, that really says something. That's not easy to do. People get to decide where they vote with their time and with their money. And so the fact that you have that is incredible. What a resource.

Well, in our next episode, we're going to talk more about the kinds of things you probably talk about inside of that community, which is, okay, how do you get rolling? How do you need to be thinking about this? What kind of time do you need to be putting into this? Those, so I have questions like that for you, and I'd love to hear your opinions. So, everybody stay tuned for part two.

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