Technology

As Generative AI Enters The Legal Industry, Will Midsized Firms Get Squeezed Out?

Smaller firms often fall behind, but with some help they may be able to stay in the generative AI revolution.

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Replacement of Jobs by RobotsIt turns out Biglaw firms aren’t yet as deep into the GenAI scene as we might have thought. But that doesn’t mean the technology isn’t barreling down upon the Am Law 50. Major investments from the biggest players in legal tech promise to bring all the advantages of powerful large language models (soon to be known in the industry as “the other LLMs”) with the benefit of meticulously crafted guardrails against hallucination and extensive training on reliable, curated data sets.

And that costs money.

For all the romance around the idea that generative AI might hand smaller firms a tool to level the playing field against the deeper pockets around, it’s reasonable to assume that, in the short term, many products will prove too pricey. A company’s gotta cover its $650 million payouts somehow.

Which opens the door to a provider dedicated to adapting the underlying technology to smaller firms in a way that delivers reliable results.

Hanging around ILTACON, I connected with a company aiming to keep the mid-market at the forefront of the AI revolution. CallidusAI is a relatively new entrant in the field, having started back in February, recognizing early in the ChatGPT hype cycle that there was a lane for lawyers looking to get into generative AI without breaking the bank or getting sanctioned.

Our primary focus is on delivering a world-class product that has been thoroughly vetted by attorneys. We deliver – fast – and our roadmap for continued development, nevertheless, spans years into the future, promising consistent and incredible advancements. Our early partners will gain immediate productivity improvements and start building generative AI into their DNA, setting them up to multiply the benefits of each new wave of development.

The result is a product capable of serving a broad array of use cases, with users able to drill down to specific tasks in both litigation and transactional fields. Drafting a contract begins with a clean interface and a helpful slider to keep the draft focused on who we’re looking out for:

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contracting screenshot

As the deal progresses, the system can analyze draft language to identify issues — like this confidentiality clause that exceeds market standard — and suggest better language for the attorney to futz with.

The additional options menu shown in this shot offers a particularly thoughtful use for the technology. If generative AI is understood, not as replacing attorneys but as replacing mundane attorney tasks, making the robot write the short paragraph explaining this issue and proposed edit to the non-lawyer client is the perfect use case. That’s 10 minutes of a lawyer’s life that they will never get back — and probably won’t even successfully collect on — that doesn’t require a law degree to bang out but nonetheless has to be done.

Co-Founder Anoop Singh, who comes to this endeavor from the business of tech side, explained that his co-founder from the lawyerly side focused the team on building a solution to the tedious tasks attorneys perform.

And in a case like this, a task that lawyers might perform without even realizing it’s taking them away from productive work that genuinely calls for their expertise.

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review contract screenshot

Litigation is not left out either. The interface takes a standard chat inquiry and uses it to deliver legal research (may need to zoom in on this one). Based on the GPT-4 engine, there’s always worry over hallucinations, but CallidusAI employs a process that has prevented the product from any known case of hallucination. And all the results are clickable, providing a clear audit trail for a lawyer performing their obliged due dilligence.

legal research screenshot

CallidusAI offers a free 7-day trial and is running a promotion throughout October to get two months for $59/month for its basic package. Offerings with more bells and whistles are also available.

HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

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