In And Out

What GCs Want To See From Firms' New AI Practices

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<strong>Michele Gorman</strong> covers in-house legal departments for Law360 Pulse
Michele Gorman covers in-house legal departments for Law360 Pulse
I've noticed artificial intelligence practice groups popping up in law firms around the country over the past few months, which has made me wonder what general counsel want from their external lawyers when it comes to this burgeoning technology.

My colleagues have written recently about AI groups that aim both to advise corporate clients and investigate the use cases for these innovations. Norton Rose Fulbright tapped an Atlanta-based partner, with two decades of experience advising public and private companies in areas including technology and financial services, to head its formal AI practice.

Husch Blackwell LLP named a commercial litigation and mass tort partner, as well as an intellectual property litigation partner, to co-lead its AI-focused team. Meanwhile, Baker Botts LLP and Mayer Brown LLP separately formed 60-person cross-practice groups.

Since the emergence of popular generative AI tools like ChatGPT, the legal industry has broadly sought to incorporate and research the tech — with both positive and negative outcomes. The White House stepped into the fray in October, when President Joe Biden signed a wide-reaching executive order on AI, creating new standards for security, fraud and safety testing.

In one way or another, firm leaders have said they decided to assemble AI teams to help in-house clients navigate the rapidly evolving landscape by advising them on the legal implications associated with the development, deployment, commercialization and use of the AI technology.

They've also noted that the formal creation of these groups is a response to clients' needs and interests.

Cecilia Ziniti, who left her general counsel role at software company Replit in November to work toward building an AI product for her now-former peers, said top corporate lawyers are specifically looking for their firms to have AI practices. That need comes amid the backdrop of European Union lawmakers voting overwhelmingly on Wednesday in favor of a first-of-its-kind AI law and the creation in February of a bipartisan congressional task force on AI.

"If I was managing a law firm, I would probably create an AI practice group, but it would be an affiliation," she told me. "You need privacy people, you need tech transactions people, and then you need copyright and IP people, depending on the issue."

So what do general counsel expect to see from firms with AI?

A report out last month showed that while top corporate lawyers have a keen interest in how outside counsel will use generative AI, many are in the dark about their firms' views and strategies on the technology. The BTI Consulting Group report found that corporate clients want multiple viewpoints as they sort through the implications of AI, but that most attorneys are silent on the risks to clients and how their firms plan to use it.

"I'm looking for law firms to have a clear-eyed and balanced view of looking ahead to where these technologies might ultimately arrive, but avoiding declarative pronouncements that the problem has been solved and we're the only ones that have solved it," Steve Harmon, general counsel at software-powered law company Elevate, told me this week.

The BTI report suggests that firms should ask clients about their AI strategies and adoption, and showcase the generative tools they have developed and used.

Harmon underscored that — perhaps most importantly — AI tools have the potential to increase efficiency and reduce costs, two areas in which general counsel face pressure. As a result, law firms can proactively use AI tools to produce better output with less effort.

That could, however, create a natural tension on pricing, Harmon added.

"I think the law firms can say, 'We're going to use these tools to become more productive and produce better quality,'" he said. "The GC is likely to say, 'That's wonderful, and therefore, we expect your throughput to increase, and our cost per unit to go down because you have better tools.'"

Dawn Haghighi, longtime general counsel for the PCV Murcor real estate family of companies, said she wants to see a firm's growing proficiency in generative AI, including a deep understanding of the technologies and the establishment of protocols to ensure accuracy and reliability.

She added that customized AI solutions that cater to the unique requirements of a general counsel's organization are essential.

In-house lawyers value firms that involve them in the development, implementation and piloting of AI tools, ensuring effective collaboration and clear communication about the benefits of AI for specific cases or transactions, Haghighi said.

And for many companies, that openness about AI isn't just something firms can treat as optional, she suggested.

"Transparency from outside counsel in how generative AI contributes to legal matters and benefits client outcomes is also crucial and is becoming a requirement in the client retention agreement," Haghighi said.

--Additional reporting by Lynn LaRowe, Matt Perez and Alison Knezevich. Editing by Robert Rudinger.

In and Out is a column by Michele Gorman. The opinions expressed are those of the author and do not necessarily reflect the views of Portfolio Media Inc. or any of its respective affiliates.

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