10/30/2026: ClioCon Recap, one law firm's AI-centric 1L summer program, and more

0:03All right, welcome everybody to another edition of Legal Tech Week, the show where we talk about the news coming out of Legal Tech and innovation world over the past couple of Legal Tech Tech Tech and innovation.

0:30panelists. So I'm going to start by welcoming her and then we'll go around and do introductions to the other panelists. But Rachel, why don't you say hello and tell us who you are and what you do? Hi, yeah, happy to be on. I think this is my first legal tech podcast to be on, so I'm honored. I'm a reporter for Law360, senior reporter. I cover small law firms and solo practitioners. have been there for about six years. So kind of legal tech adjacent, but. Awesome. First legal tech podcast. That's pretty good. All right. And Joe, do you want to go next? Sure thing. Joe Patrice, I'm the editor of Above the Law and I have a podcast called Thinking Like a Lawyer.

1:15And I guess, and I'm often on Legal AF podcast every other week, I suppose. I should add that, at least for the foreseeable future. And yeah, I am happy to be here. I am happy to be home, which I got to at 7 a.m. this morning after a whirlwind of conferences, which I think we're going to talk a little bit about in a minute. We are. All right. And Victor. Hi, everyone. My name is Victor Lee. I am assistant managing editor for the ABA Journal. I host the Legal Rebels podcast. Yeah, I was at Clio, but I came back on Wednesday, but I still feel like my mind is like shot. Like I actually told my boss yesterday, I thought it was Tuesday, not Thursday.

1:56So, yeah. Could be. All right. And Nikki. Hi, all. My name is Nikki Black. I'm the principal legal insight strategist at 8 a.m., the team behind LaPay, My Case, Case Peer, and Docket Wise. And I write legal technology columns for Above the Law, ABA Journal, and the Daily Record. All right. Now, I can't rule out that Steve Embry could come in at some point. And if you're a regular to the show, you know that Julie Subwale could drop in at any time. We never know. At any time, yeah. She tends to, Rachel, you wouldn't know this, but she tends to, she's from Canada, and they're a different time zone or something up there.

2:35She just kind of drops in after we get going sometimes. Anyway, lots to talk about this week, but a lot of it has to do with conferences. All of us, except Nikki, were at ClioCon this week. and we have been kind of on a crazy roll of conferences. We've talked about some of them on the show, but I was just thinking about the fact that since the last week of August, there has been Ilticon, there's been 8am Kaleidoscope, there's been Relativity Fest, there's been Net Documents, ClioCon, I went to the Masters, I think I'm the only one who went to that. And those are just the ones we all, at least some of us, went to.

3:17in addition there was smoke ball file vine a cosmonauts boston there was uh everlaw yeah ever did i not say ever lie yeah everlaw i can't even yeah they all believe no i you're right i didn't say elver i meant to say everlo uh people wouldn't know uh and well it's it is yeah i know it's true um i mean there were you know given that there were what two different ones in boston this week or was there a third that i forgot about in boston this week as well there was like I was googling it, there was like the AI Native Law Conference a few weeks ago Solid Summit the where were we, was it when we were leaving I'm losing track of where I've been when we were leaving Net Documents there was like another legal tech conference setting, it wasn't a legal tech conference, a legal conference setting up in the same space we were vacating as we were like getting out of it so hard to kind of keep track of what the heck is going on in the world.

4:21But since we were, since most of us were, sorry, Nikki, but since most of us were at ClioCon this week and Nikki didn't even make it to the Legal Tech Awards on Sunday night because your flight was canceled. But since we were at ClioCon this week, I think maybe let's start there and talk a little bit about that conference and the news that came out of it. I thought it was, to me, and I am like the rare bird has been to every ClioCon so far. It struck me as I've never been to a ClioCon where there has just been so much news rolling out. And that was kind of a big deal after last year because there was a ton of news that rolled out last year at ClioCon.

5:01But, you know, probably the big news in a sense was this, well, a couple of big news. One was that they rebranded or came out with kind of this new logo to reflect their new AI-focused image. And the logo incorporates this idea of a single pane of glass and kind of the matters and whatever revolving around it. I mean, that's one thing that they say. Yeah. What did you see in it? I mean, look, what I think is important for Clio is they really are trying to, and this goes back to last year, they're really trying to build out that their brand is not Smalls and Solos, legal practice management, that they do everything and they're out there and they want to establish themselves as a legit AI company.

5:53And like all AI companies, their logo then has to look like vaguely like a butthole, like all of them do. And so here we are. Take a look at it and you're not going to unsee it now. No, although did you see the thing about their old logo? Did you, the, how? The clock. I never called that. I never saw it. Me neither. Yeah. He mentioned it. I was like, oh. Yeah. There's like this double image in the old logo that if you look at it, it looked like a checkmark. But if you apparently looked hard enough, it also looked like a clock. I'm still not sure. I still haven't quite seen the clock. I guess I can sort of see it, but it doesn't really quite look like a clock.

6:34But it was meant to be both, I guess, a checkmark, like a task completed or something, and a clock. yeah crazy i didn't think it looked like a i've seen worse um like like like more like more posterior themed um sure logos i thought this one looked more like uh kind of like a like almost like a lotus flower almost but like maybe the the the the um the circles were a little too small um but and and and and the middle was a little too big um but yeah i mean i don't know i i i didn't quite i mean yeah i i know i know they probably paid a lot for um for the rebrand and they paid a lot for a consultant to come in and like you know do all this stuff and whatnot but i don't know it's just i feel like that the whole single pane of glass thing it's really hard to communicate that with just you know a square um because that could be anything right i mean you know i mean and pans of glass could be different shapes and I don't really know about that, but I mean, I did think the whole thing about all things feeding into it.

7:39That worked for me, I thought. Yeah. I was kind of hoping they were going to go for 10 a.m. for their new brand, but just to show that their day is, their workday is shorter, thanks to all this AI. That would be good, yeah.

7:55So, Rachel, what did you think? You haven't been to Clio before. What was your? I haven't, yeah. It was a new experience. Yeah, I mean, it was it was so interesting, I feel like in terms of just the landscape of the legal tech, you know, universe and specifically the way that I feel like Clio has become this almost like papa bear to all of these other smaller legal tech companies and sort of the symbiotic relationship between, you know, these very hyper specific, you know, tech products that are trying to fill in all of these tiny little gaps. you know that lawyers need to do their jobs and the way in which Clio kind of like like what's the word like I'm also my brain is also scrambled eggs today but kind of like the you know the dichotomy of Clio launching all of these new products and you know making all these acquisitions and then also having this marketplace of sort of you know folks who are some of them are doing the same thing and I thought that was a really fascinating sort of you know, just symbiosis.

9:03Yeah. I think that's really interesting. I mean, because to me, it's, you know, Joe is just at Everlaw. Several of us were at Net Documents a couple of weeks ago. And those are companies that are sort of very deliberately, you know, integrating with everybody, setting up MCPs with everybody. You know, everlaw's got this sort of new everlaw everywhere thing they're talking about which is like we don't care if you come to our platform at all just you know we've got the data come in via mcp and they showed stats on like the mcp usage into their platform is going off the charts i mean people are are just you know there's a major growth in people using everlaw through mcp net documents is taking a very similar kind of approach and then now clio which kind of started with like you say with all those partners and all that.

9:58Yeah. Now it's like, now we're the single, now just come to our platform. We're the single pane of glass. And if you really need some of these people, we've got these partners, but we're just going to keep launching new products and doing everything our partners do. Yeah. I feel like the, you know, the keynote speech, which was, you know, so interesting and, you know, revealed a lot about all the different like ambitions that they have, you know, going into the future. But, you know, I can't imagine being sort of a vendor sitting down and like kind of listening to Jack Newton say you know we're going to be everything we're going to be all things to all people you know it's kind of like oh okay um where do I fit into that but but it seems like you know they yeah I mean it does to me contrast and again I'm like not in the tech space as much as you guys are so maybe you have a different perspective on this but like it is such a contrast that open door policy from the big tech giants that we see you know more broadly, like Apple and Microsoft and, you know, everyone trying to shut each other out and all the antitrust lawsuits and everything, you know, it's such a difference.

11:03I don't know if it'll stay that way, you know. Yeah. I mean, my article was a lot about exactly that. The idea that for years, we kind of, I used to compare them to Microsoft as a concept, right? They provided an operating system and all their partners plugged into it and their job was to make make everything be seamless like with as an operating system and you know they kind of famously with payments stepped into a garden and now here we are uh that demo was a lot of stuff that their partners uh when you looked out there do uh and yeah i no one the vibe kind of shifted uh i don't think anyone was going to say out loud that they're upset or worried or anything.

11:50But yeah, it shifted. And I think along with it was the open Apple comparisons where Jack was all like, it's all about Apple now. And there is something to be said for Apple notoriously being kind of closed off. I will say that I talked about this with one in my interviews. And one thing that Ed Walters, who has a unique perspective because he was an integration partner in the past and now he's here um he said i the better apple comparison is to compare it not so much with the macbook but with the iphone where you know their apple music exists but you could have spotify uh now i think that's a good analogy i think the real question will be you know i mean spotify also filed a complaint with the eu about them so who knows uh they they seem unhappy about it but i don't know it's it's a very interesting concept and maybe it's true that the single pane of glass is in an ai mcp-ish world maybe that is the new operating system and these workflows that they're designing will be sufficiently well done that you could seamlessly drop one of their partners into the staging area where currently a native thing work maybe uh but yeah i could i would not be happy to be a partner necessarily i'm a little concerned i talked to a couple folks um there was you know somebody there that was i i don't remember the name of the company but it was a phone company and they said that um cleo had given them a called them two days ahead of time to let them know that this is going to happen um and i was talking to another company um that was like a billings company and they said this happened to them a couple years ago but they found out in the you know in the keynote speech and they're just kind of like clapping but crying on the inside um yeah but even the apple comparison because i remember yeah like we were all in the briefing room when he said that and we were all like whoa but then we kind of thought about it we're like oh okay i mean you can kind of see it but i mean even with apple it's like you know there are plenty of third-party programs.

14:00I'm looking at my, I have an Apple right now. I'm looking at it right now. I have Adobe on it. I have Zoom, you know. So, I mean, so like, you know, the companies that are able to still be viable, they'll be able to, you know, they'll still be able to be compatible with Clio and they'll have integrations and whatnot and they'll still be viable. But the ones that aren't, you know, I mean, because we don't have, there isn't a MySpace app, you know, there isn't a, you know, like a, I don't know, like a, like a Google, like what was it? Google plus or whatever, whatever it was called before. So, so yeah, I mean, I can see that, that kind of being in the words, okay, well, well we're going to have the dominant, we're going to have the dominant program.

14:40And if you guys want to get with us, then you have to, you have to, you know, play ball with us. And, and, and still that, that, that isn't quite the all for one, one for all, all for one, you know, spirit, but it also isn't, you know, we're going to crush you and force you to force you to, to, to adopt us or, or else you're going to, you're going to go the way of, you know, of, of, of the dinosaur. So, yeah, I mean, and, and, and, you know, look, they're, they're very good at like, they're very good at like presenting a certain, a certain face. You know, they're very friendly, very like open with us, you know, they're very, they're very, you know, accommodating and whatnot.

15:18And, you know, so they don't, you know, I mean, so I do think that's going to have an impact too, because they don't come across as like, okay, we're going to crush everybody and we're going to bring them to heel and they're going to kneel before us. Well, but for what it's worth, I don't think the Apple slash iPhone comparison had come across my, it was something I was aware of, but thinking about it as y 'all are talking, I mean, Apple was, and iPhones, I mean, that's hardware. They began as hardware and continue to be hardware. And we're talking about software. So I don't know, I'm having a hard time wrapping my mind around that comparison or analogy but i'm gonna have to think about it more but it's it just seems like those are two different things certainly apple has ruled out apple tv you know apple music and all these other things but that was to run on their own hardware sort of you know like so i think it's a little it's not quite as analogous as you might think if you really think it through right i mean i think the issue is the issue is like in the dell and ibm and all these people are piping out computers.

16:17Microsoft says, I don't want to deal with it. I'll just be on everything and let a thousand flowers bloom. Meanwhile, Apple would build a hardware computer with its own proprietary operating system, with its own control over everything it does. And it is true that this isn't hardware, but the new order after years of it being we're an operating system seems to be we're an operating system that has a native phone answering system a native intake system a native timekeeping system a native whatever and it's just more like how apple puts their things on there and just closes down their operating system so put us you're right about the hardware put aside the hardware but just the apple os versus microsoft os well philosophically i know what you're saying i mean i use apple hardly for that reason but But this is also, you know, there's AI in the mix.

17:10So it's just, it's hard to, I'm not saying what they're doing. I'm not really commenting on what they're doing. I'm just saying it's hard to analogize what's happening right now with anything else. You know, I almost feel like it's almost more like you want to be the operating system or you want to let everyone loop in and you're just securing data, if you will, in a specific way. And I think it really is. And it's going to be interesting just to see across the board how that plays out, because you are clearly seeing a line in the sand. Some companies going one way and some companies going the other way.

17:44And, you know, within six months, probably it's going to be clear what was the right call. You know, it's moving so fast. So it'll be interesting to see. You also can't ignore the fact that any number of people called Jack Newton the Steve Jobs of legal tech. Wow. And that Jack, I mean, you got to give it to him. I mean, he keynotes like no other legal tech CEO, I think. I mean, there's lots of good keynotes from legal tech CEOs out there. But Jack is unique in the way he delivers, in his ability, I think, to deliver a keynote that kind of pulls, always pulls everything together in a very thematic way.

18:25And that certainly lends to the whole Apple analogy. Yeah, no, I'll give him credit. I mean, like, he spoke for almost two hours. Like, if you told me to do that, I'd be like, no, no, I think the product can speak for itself. I don't really need to be out there for two hours, you know, especially maybe not even one hour. I'll just run a demo with AI and boom, you know. Like, so, no, I mean, look, they've gotten to where they are. I mean, not to blow too much smoke up there, you know, whatever. But, like, they've gotten to where they are because they're really good at what they do. And they're, you know, they're good.

19:01They're very good at the presentation. I mean, you know, that I don't think anyone's doubting that. And so, you know, it's it's one of those things where it's like, you know, they lean into their strengths and they, you know, definitely, you know, yeah, they know what they want to do and they and they they present it the way they want to. And the show really was, I thought, was really indicative of that. Because, I mean, we've, I mean, not Rachel, but, like, you know, we've all been to, like, a number of these shows, these Clio shows now. And, like, I mean, I wasn't at the first one, but I was at, like, either the second or third one.

19:33And, like, they went from, like, a small, you know, hotel, a boutique hotel in Chicago to, like, the Heinz Convention Center where they had people sitting in the rafters. Not even in the, you know, like, they couldn't fit into the main conference, into the main ballroom. ballroom. They had to sit in the rafters. So, I mean, and, and I think I said this to a couple of you guys, like the show even felt even bigger than that, like bigger than previous ones. Like it, like, I think, I don't know if they were consciously trying to convey their size, but if that's the case, it worked because like, I mean, I felt, I definitely felt like, you know, it was much bigger than previous shows.

20:08I guess one other thing, not so much about the, the conference, but about the announcements, I guess, was that, you know, it really is, I mean, this is really sort of a new Clio. I mean, this, their billion dollar acquisition of Vlex, I think, is proving itself to have been a good move. I mean, they now, you know, they are now a major player in the legal AI market. They now have major legal research data, major court docket data. And, you know, what was last year sort of a vision of how this all comes together is this year was a realization of it. I mean, in my article, I kind of talked about the fact that I had been at this conference the week on the weekend, just ahead of Clio, of law professors who were all kind of like, you know, we're not really ready for that day that AI gets here and illegal.

21:12And I'm like, it's here. Sorry, but it's here. And then you go to Clio and it's like, yeah, there's the evidence. I mean, that demo that they walked through and all the announcements they made, it's like, you know, as Carolyn Elephant wrote, as Jack mentioned her post in his closing was, you know, she's saying people talk about AI enabled law firms, but this is it. You know, if you're on Clio, this is an AI-enabled law firm. It almost makes the concept of AI-enabled law firm redundant in a sense in that if you're using these tools regularly in your practice, you are AI-enabled. Well, and I'm curious what you guys think about them getting into the ring with the LexisNexis and the Thomson Reuters.

21:54I feel like context was just the buzzword of the weekend, content and context um yeah i mean what chance do they have in that space i think ed walters is so happy right now i think ed walters has wanted to take on kind of you know westlaw and lexus for uh what 20 years or something yeah like i think they're in pretty decent shape especially if they you know if if If they concentrate on picking off picking off people where the target is easiest, like they are moving into enterprise and big law firms. But, you know, they had different needs. If you if you take on those those folks at that level, maybe not because, you know, they have enough money to burn.

22:43But if you I mean, I hear from smalls and solos all the time about how ridiculously expensive they find insert one of the big two is. if you could slowly and surely pick off people in that ecosystem yeah you know like well that's doable i was like i'm like what dent would it make in lexus nexus is my parent company by the way i should disclose that i was kind of sitting there being like well i hope my job's okay clear is taking everybody's clear is coming for everyone um but no i i mean you know what dent because I agree I think small firms especially like I was talking to you know one small firm owner who said you know well we just wait for Clio to do it like you know like there are like you know companies that they consider investing in and they're like well Clio's going to do it eventually you know so I think like they're they have a really loyal client base in those small firms and solar practitioners but what I don't know is like what dent it would make in Westlaw or LexisNexis's sort of pocketbooks if all the best players went away.

23:49I mean, Lexis and Wessler are so... And here's the thing, right? I mean, there's two sides to this, right? I mean, you could say, well, they're so well-established that, you know, like a third company coming in and breaking the duopoly is probably not going to make a big difference to them. I mean, it might maybe in the margins or whatnot. But then again, hey, no one ever thought that what? I mean, you know, like, you know, I mean, no one ever thought that Blockbuster would go obsolete. No one ever thought that, you know, all these other technologies like CD-ROMs and stuff like that. So, like, you always have to consider the worst part, not worst, but I guess the most extreme possibility of that.

24:27Okay, yeah, like if someone does come along and does something better and for more affordable than one of the established companies, then of course they need to sweat it. And that'll force them to improve on their end. Because, look, I mean, we've grown up with Lexus and Westlaw, but I don't know anybody that really, like, you know, loves them. It's just more like, okay, we've got to use one of them or maybe, you know, or maybe Westlaw for this, Lexus for that, blah, blah, blah. But no one's like, oh, you know, I love this brand and I'm ride or die with, you know, either Lexus or Westlaw, you know.

25:00So they don't, I mean, it's just, they've been, it's almost like they've been an institution that people just accept. But so, you know, that that doesn't necessarily mean that that somebody can't come along and disrupt it. Well, I mean, yeah. Go ahead. Well, I just wrote my ABA Journal article on and I did a lot of research. And I'll put the link here. That wasn't one of the things I'm going to talk about. But on legal research tools for small law firms, I tried to figure out what was out there. AI enabled. And that was under$100 per user per month. And it was interesting because one of the things I researched that I didn't include in there because it was something I was trying to figure out was what was happening with the bar association memberships and free research.

25:48Because that's where Fastcase really made its name and became sort of the household old name of legal research for the small firms, right? Everybody used Fastcase. And what it looks like, and that's very interesting, is that a lot of the partnerships had, you know, the contracts had endings, and they're ending, and Decisys, which is that sort of sleeper Lexus tool that we've talked about in the past, has been filling in some of the gaps. And it looks like right now, Now, Decisys has half of that market and Fastcase has the other half, whereas it used to be Fastcase had all of the bars and provided the free relationships.

26:30I don't know how that's going to play out. I think I have news on that, but I can't tell it yet. Okay. But I thought that was interesting to sort of discover that that was happening. And then in the meantime, what I talked about in the article was you have tools like Describe and MidPage that are integrating with Cloud and ChatGPT and providing access to all of this database, you know, all of the legal research databases. And then there's some other tools that are, you know, cases. DingDuff. There are two others, cases and case search, I think is what it was, that are also AI-enabled tools. And I was less familiar with those, but there are like tools available out there.

27:10And so I think it's going to be super interesting to see how this all plays out because it's in the large firm space and in the small firm space, because AI is changing everything. And all these acquisitions and mergers are changing everything, too. And so it just feels like the foundational elements of how things have always been are just completely shifting right now. I had a legal research question yesterday and I went to Claude and I have my court listener and DingDuff MCP integrations. And I got a really good answer from Claude that went through court listener and went through DingDuff and it did general internet search and shows all the different steps it's going through and what it got out of it.

27:54But I mean, it's hard to know what the future is for legal research when you can just do all of this in Claude. It's an interesting time. And not to mention, on top of that, the fact that so many of the big companies are now bringing the court listener database into their platforms. I mean, NetDocuments is one of those. They have brought court listener in as a way of kind of validating and matching, you know, you upload a document that has cases and citations into it. And then they're kind of validating against the court listener database. Filevine, which had their conference this week that none of us went to, I don't think.

28:34But Filevine has similarly brought in court listener database and developed their own citator so that you can, you know, check hallucinations and that sort of thing as you're drafting documents. So all of this stuff is getting mashed up in a weird way that where these all used to be separate products. Now it's all like everybody's everybody's everywhere all at once or whatever the movie was. And. Yeah, it's it's interesting. Yeah, I don't know. You've never seen Joe Speechless before. That's the thing. There's a lot of stuff that was thrown at us. And yeah, I don't know. It's going to be interesting.

29:20I wasn't at that conference, obviously. But when, Rachel, you were just talking about how context kept getting brought up. And that made me think of the Net Documents conference, because that was all you heard there. not only because that was the name of, you know, the, the, one of the initiatives or that they were talking about. Right. But the, also just as they were trying to explain all of what they were doing, it was context, context, context. And I think that's sort of a sign of, you know, you ever, it seems, you know, the harness was a while ago, and then it was surface and surfaces, but everybody's talking about.

29:55And then I think those are going to come and go, but context, I think is going to stick around for a while. And we're going to hear that for the next six months across these different conferences and releases. It cracks me up because, and, you know, I mean, you wrote about that. It is, I guess, you know, what's your definition of a buzzword, you know, because I guess the idea is a buzzword is like supposed to be like opaque in some ways in terms of like what it actually means. And maybe context is like very clear, but it was kind of cracking me up, you know, the emphasis on we don't, we're not doing buzzwords.

30:24We're not saying AI native, you know, but then you kind of turn around and you're like, oh, every AI company is talking about context. Like that is that is the buzzword. Yeah. Yeah. And NetDocs. So the NetDocuments, I'll use this to kind of pivot to another show, too. So NetDocuments we went to was great. We talked about context a lot. But I mean, we talked about context a lot because that is, I think they see, there was a day where people thought everybody was going to compete with, you know, everybody was going to control the universe. And I think with the potential exception of Clio, everybody's decided that's not what's going to happen.

31:02And where NetDocs, I think, did a, you know, kind of came in is we control all of this stuff. And if we just let everybody access it, but we control this, then we're getting used. We want to be the DMS of record and we'll do that, which I think is where you want to be. I think it's also kind of acknowledges and the article I wrote about NetDocs was that I think that it acknowledges the looming. Here, we can get to another buzzword, which I guess also isn't totally opaque, but another buzzword, which is the orchestrator. I think that is the way of the future because we've got token get incoming and we have the just, you know, capabilities of these models change so frequently.

31:48I think orchestrators are going to be the new way things work. And if you believe that the point guard model is what's going to happen, then where you want to be is what's safe for you is never to compete on what's it going to pick. You want to always be the thing that it goes to for data, which is where I pivot real quick to. I just flew back from Everlaw today, and boy, are my arms tired. But they are the same concept in a lot of ways, even though NetDocuments is doing it about your firm's knowledge. Everlaw believes in this as the logic for the evidence layer. Like we can be where all the evidence and discovery of the case lives, and we can protect that.

32:30And whether you want to ping us with this or that or whatever, we have it. And not just we have it, we're guarding it or hosting it, I guess I should say, and let whatever agent, whatever thing you ping it with do its thing. But those things come in and then can be guided by the tools that are native to Everlaw and built to do the things Everlaw wants, which I, yeah, I think that's kind of where you have to be. because if you try to be anywhere else, the likelihood of the bottom falling out on you is really high. Yeah, I just posted today my interview, Josh Baxter from NetDocuments. We're all a little behind on posting from these different things we've been at, but I did a podcast interview with him there.

33:17And I mean, one of the things we talked about is this idea of whether, and something I'm hearing more and more vendors talk about, is that the sort of UI layer almost becomes irrelevant on some of these platforms as more and more users access them through MCPs and whatever else. And I asked him about the idea of, do you see a day when the sort of, that the documents could almost become headless in the fact that in the sense that the UI doesn't even matter, that people are just going to be coming in through all these other connectors and using it from Harvey or Legora or Claude or whatever. and he said yeah he could definitely see that somewhere where we're heading and i've talked to other vendors who are saying they're now seeing you know the the vast majority of the usage of their of their product is coming in through mcp now well the mid-page guy is one of those people i mean he says very few people come to his directly come to his platform anymore they're all using it through through clod or whatever so um and you know somebody asked about the cost issue in the chat.

34:23And I thought, and we all keep talking about the tokenomics, as Joe just mentioned, but I don't know, there was that slide from Ethan Mollick, the Legal AI guy, one of the keynote speakers at ClioCon, where he talked about how the cost of all this has dropped down so dramatically. And he put up this slide showing cost per task or something of having dropped over 18 months, the equivalent of from$50 ,000 down to$69 over the last 18 months. So, you know, while token cost is still a concern, it's just dropping and dropping. And if I recall correctly, Malik said, you know, that's just not going to be a major issue at some point in the near future.

35:14I wonder, though. I don't know if you can buy that. Well, yeah, one thing that was interesting to me in like some of the sessions at Clio, you know, kind of specifically aimed at smaller firms growing their business is like it was kind of just a default, like assumption that overhead costs for those firms, especially are like going up exponentially. And like you have to adapt via billing or via, you know, how you're kind of thinking about paying your attorneys and all this different stuff. And so, yeah, I think it's interesting that obviously the costs are going down, but maybe for firms that just didn't care about tech at all that now have to kind of have it as an essential, maybe it's just really adding to their overhead costs.

35:55I also feel like that the token thing is a little deceptive because the cost per token is going down. But the new tools that are being unleashed, agentically in particular, where the agent goes off and decides how many search cascading searches it wants to do, the amount of tokens being burned to do stuff is going up. And if you're in control of it, you can keep that low. And then these companies don't ever make revenue. or you're getting burned on the amount that it's being that's being used but yeah like that's the thing like a lot of people talk about the cost cost per token going down and i'm always like but is that is that going to save your bottom line if you ended up using a ton more

36:44yeah rachel i was going to drop a link to your story but i can't find it quickly but i don't I feel like that's like when people focus on a single data point, a single piece of information, and oh yeah, this is happening there. But there's a much larger picture when you pull back and look at all of this. And that's the cost of the data centers, the cost of trying to get these communities to agree to the data centers, the cost of lobbying for the data centers. the the there's all these additional you know and the fact that these companies are not making money now to begin with and the the bottoms falling out of them all right now is they're all making their third quarter earning reports and it's so clear that they're over leveraged and that they are selling they're selling their um ai tools at such a low rate that it's not even covering the bills, let alone like the cost of the water they need to run, cool down this, you know, like it's, it's kind of unbelievable.

37:41And so it's sure you can focus on one little pinpoint and talk about how that's going down. And it's not an irrelevant point, but there's a lot more to this than that single data point. And so I think it doesn't, I feel like it's when people, another time where I see this come up is people are like, oh, well, you don't like the data centers, but You know, your iPhone runs off of a data center. All the cloud runs off of it. Yeah, but they didn't need to build hundreds of them and decimate rural America to support those. You know, this is a completely different scale. So when you focus on these little data points, it's almost like an unethical way to argue these things, in my opinion.

38:23Like, you're trying to pull the wool over people's eyes. Yeah, it's also true that, like, you know, we talk. a thing that I've talked about a bunch on the show are the increasing accuracy of these smaller models. Obviously, the most powerful of those open weight models are still open weight models that require some juice, but I'm running a pretty accurate version of Quinn on my laptop locally. Right. Like at a certain point, you don't need a data center when you don't have to ping the cloud to do it, you know. And that's that's what I think should be really worrying for these people who are building a bunch of data centers is that if we get to a point where we can just load the thing up, then they don't.

39:13Then they've just built a bunch of infrastructure that there's no need for. I saw Sam Altman today apparently gave an interview and Futurism is writing about it where they're like, Sam Altman is furious at the idea that you might own computers. He's apparently very angry and thinks that we need to do something to prevent people from having the ability to host local AI. Because how can you charge rent if people own things? i think i was talking i think it was jack newton i was talking to the clio con but he was comparing the investment quote-unquote in to ai as like equivalent to the investment into the railroads like you know in terms of cost um so i think that's an interesting idea of like yeah what if we rendered the railroads unnecessary what what did that yeah i don't know i keep coming back to the one the analogy i keep coming to and this is it was nowhere near the scale but in the 90s uh the the fiber optic business was it was the whole thing and you know the biggest companies in the country were like lucent and stuff and they were just like fiber optic everywhere it was a very physical infrastructure based business but you know then we got cell phones and you didn't really need a bunch of fiber optics uh they and that's why we don't talk about lucent much anymore Right.

40:31Like it's it's that sort of a problem. And I think what goes on with these data centers is that times the bazillion. And if there is a cell phone like equivalent of, oh, we cracked the code, we can now get almost fable levels of quality on, you know, a server that's on one server that's on prem. Then, you know, somebody's left holding billions of dollars of bags. I thought it was interesting at this Yale conference that I was at, there was a law student who got up to talk about a project she was working on using AI. And she began by apologizing to the audience for having used AI because of its impact on the environment and water resources.

41:17I don't think I've ever seen an AI speaker do that before. I thought that was really interesting um what about a more anything more on everlaw net documents i mean we kind of talked more about cleo but uh nikki you wrote a very nice article about net documents as kind of like a nice conference or something you know i thought i mean the thing about net documents was that and here i have a copy of the article i put it i put the link in earlier all right up there back when we were back when it came up at some point. I mean, it really struck me because initially when I was at the conference, initially I was like looking over the agenda and I was like, again, I'm like, oh, there's not a lot of like, I like the big future facing big picture things.

42:06I mean, you can tell that's what I talk about here even. I'm like, ah, there's nothing here like that. But then I'm like, but should there be? I mean, it was very, very, very user focused. And it's a user conference, you know, and they had like demos on the stage during the keynotes. And I thought that it really got me thinking about, especially because you're seeing these. I mean, I was at the Sheryl Crow show. I loved it. But like, do we really need that? Like, what what are we doing here? Like, why do we have this extravagance going on? And what does that actually do? Who is it serving? You know, and so I just thought that it was it really got me thinking about it, especially on the flight home.

42:44You know, I think that the conference was very, it was very, it was perfect for their users. And I think that it was something that probably provided the users with a ton of value. And it was really kind of like back to nuts and bolts of what a company should be doing. So, and with all the extravagance going on and the contradictions there, I thought it was interesting to think about. I thought they did a very good job for that goal, if that's what you're trying to achieve. And I think that may be what you should be trying to achieve. Meanwhile, FileVine this week had Matthew McConaughey as their speaker.

43:18So it continues. But yeah, I think it's gotten kind of gross in terms of the extravagance. A.L.M. and E.L. Manning, I think, right? Do they have A.L.M.? Yeah. That was, yeah. But it's like not just why do we need it, But it's like, where else could that money be going? You know, a lot of these companies will talk about where we've got, you know, that we're going to make efforts to address access to justice in this country and other stuff. But, you know, for the price that they paid for Sheryl Crow for an hour and a half at a concert, they probably could have funded every legal services organization in the country or something.

44:00I mean, it's kind of absurd. Well, speaking of law firm economics, the good news is that Wild Gottschall launched a new AI tool for their associates, right? Yeah.

44:19They launched a new AI. Summer program. Summer program, yeah. For the summer program. Is that what it is? Yeah.

44:31Unfortunately, summer might be too far for them at this point.

44:38uh what i well it's crazy i mean joe i mean i mean you you you know you follow this stuff for a long time and you recruited right so like you know for a long time while was they were one of the gold standards like they were one of the firms that like people were like oh they're full of smart people they know what they're doing um you know if any firm was going to stand test of time was going to be that i mean i mean they're not they're not like a cravath of one of those firms but they're they're up there i mean they weren't they weren't like uh they weren't like one of those like like mid-tier firms that that that got a little too big for the britches like a howary or something but they were they were they were they were a top firm with great history great people great work you know so and and they weren't they weren't like an anti-ai firm i mean clearly they were they were embracing ai like there was a i think i think was it google also like they they um they collaborated with google for um uh the google google google google lawyer thing or was it an anthrop?

45:31I don't know. One of those, one of those legal specific AI platforms, they like specifically partnered with them to like work on it with them. So they, so they weren't like an anti, anti-tech firm or anything like that, or anti-innovation firm. They were, they were trying, they were trying to roll with it and whatnot, but it's just, that just goes to show you, it's like, sometimes, you know, it is still a people business at the end of the day. Cause like if enough partners leave, you know, that's going to freak everybody else out. And then that seems like that's what happened this time is that people, freaked out when they saw the big heavy hitters leaving the firm and they were like, well, why are we going to stick around if we've seen this show before?

46:09That's how Dewey went down. So yeah, it was stunning just how quickly it happened. Just reading some of the reporting is that they kind of pulled the plug a little bit early because they probably figured it's better. If this is where they're heading anyway, then they might as well just get it out of the way now instead of trying to trying to rescue the firm with like some last minute thing and then lose even more um you know you know money on the dollar and whatnot so so i guess that's an interesting that's an interesting way of looking at it because i mean a lot of a lot of the firms hung on too long um and ended up like getting almost nothing no climb climb climb back almost very little back so you know sometimes it is better to be kind of early early than than than late but still it was stunning that it happened i mean i never i mean i mean yeah well reading up reading about we knew they had problems But they're one of those firms you thought, oh, if anyone could pull it off or get out of it, they'd be up there.

47:02I mean, they ranked as high as seventh on like full on revenue. And they were still they still made two billion dollars last year, which put them at like in the 20 low 20s, I think. But I mean, that's not bad problem. So they had a few problems. The biggest one is that of that$2 billion, a quarter of it or so was wrapped up in a couple of people. And when that group decided to go, now all of a sudden you've gone from a$2 billion firm to a 1.3, 1.4. And now what does that do? And another part of the problem is just with this era that we have entered of mercenary lawyering, which good for the individual, but it does make these law firms essentially we works with nicer parties.

47:57I mean, they like you show up and you're just your office is your office and then you leave. You don't you don't we don't for ethical reasons have non-competes or anything like that here. so it's it's just uh eat what you kill and you can jump any time that's going to be lead to instability in the past we had more firms that were lockstep uh even with partnerships and people shared in the benefits of the firm that's mostly gone gone away uh and yeah there's just nothing to really stop it i did read an interesting semi i think it was semaphore they had an analyst who said that like, look, you can't non-compete people and all, but take a lesson from banking.

48:37Some things that banking do is really structure stuff to backload and defer compensation. So sure, you're going to get your$100 million, but you're going to get it. You got to be here like six or seven years. That might be an option that in spirit, that kind of runs close to the non-compete rules, but not violating them. But maybe that's the answer. There just needs to be something to hold somebody to the firm or else they all become like this, just like completely disposable. But you know what? But I feel like. Sorry. Well, you can go. Go on. I was going to say that, but I feel like then there'll be some firm out there that'd be like, oh, well, you know what?

49:16Then we'll guarantee it, you know, immediately, you know, just just undercut, undercut all the other ones. Race to the bottom. What it makes me think about, which has not, I don't think it's, you know, we've talked about knowledge management and how firms are trying to take the knowledge of their attorneys and make them part of the firm. I wonder how, whether that's going to gain any traction, especially in these large law firms, when this is just further evidence that your knowledge is all, you know, you can take it and go. And if they've got your knowledge, there's not a lot of, it's a lot harder for you to go somewhere else.

49:50And that's what I think that's what these gives these lawyers so much power and so much flexibility and mobility is the ability to do that. That was a lot of ability words. That was pretty good. But but it's it will be interesting to see how that plays out, because that's something that a lot of these companies, AI companies, legal tech, AI companies are banking on, especially in the discovery space. is that knowledge, you know, the knowledge and the ability to use the lawyer's knowledge and pop it into the firm's database and suddenly you don't need the lawyer. So I think that's - Context, context.

50:29Yeah. I think that's going to be super interesting. The other thing that I just want to bring up, it's sort of peripheral, but the value of all this knowledge, I got an email. I'm not sure the legitimacy of it, but reaching out to me as a law firm owner. So clearly they're throwing themselves all over the place here. They're throwing a wide net, but offering me $500 ,000 to provide the operating data from my law firm. I don't know if you guys receive that too. I get those every day. I don't trust it. It's real bad. Clearly it's unethical. They're talking about all the case-related data and stuff.

51:01I can't imagine any lawyer would do that, but the value, people are trying to get access to this data. Data is what AI companies need, and it's in short supply. So I think there's a great tension there between these lawyers with all of the knowledge and client base and these AI companies trying to leverage that information to make the product more valuable for their customers. Well, and then you throw private equity and MSOs into it, and it's like, what is the value add? I mean, not that that many big law firms. I mean, more big law firms were talking about dipping their toe into that, You know, and I don't know what this does to that, you know, proposition, because if it can collapse like that, why would, you know, private equity invest lots of their money into it?

51:47I mean, yeah. Well, Mark Palmer in the chat makes the ethical issue where I don't know if it's the ethical issue, but, you know, when you set up, when you have an MSO, who owns all that data, who owns all that knowledge? Is it the tech company or the law firm? and they've got your, the tech side of it's got your data and not a good thing. Well, Reese has actually written and talked about on here in the past that his thing about the digital twin nonsense is that is tied to this. Like a lot of these people talking about MSOs are talking about using that to build digital twins of lawyers and then they'll be owned by the MSO and then they don't have to worry if they move their, try to move their book of business.

52:31Now, I think a lot of this is ridiculous. I think if I'm a client who likes working with this partner and they move and the firm goes, but good news, you could stay with us because we've got a bad AI version of him. I'm going to go ahead and move anyway. But, you know, it's part of the private equity drive, you know? Well, and what do you guys think about the sort of like the prepackaged, but also very now highly customizable agentic AI that Clio and folks like that are offering when you do have a lot of these companies like firms, especially like more boutique, like mid to small size firms that are looking into outside investment specifically so that they can like custom build AI products like higher in-house tech talent to like create this.

53:22system, closed system for them. Like, is that a waste of money at this point? Because like a company like Clio can do it for way cheaper? Or, you know, is there a value in that idea of like having the knowledge within, you know, your company completely, if that makes sense? I think it's still, I mean, I think it's still, I think there's still value in it. I mean, I think it's the sort of the difference between at this point at this point to some extent it's still the difference between using you know buying a template and and having your your custom uh personalized approach to something uh but i mean if i'm understanding what what's happening with clio work you're going to be able to do all of that customization within clio work and so then then then i don't know what the value is at that point

54:18Yeah, I guess it's just a question of whether it works. Yeah. Joe, you're much on Everly. You were there in San Francisco. Any news there? Yeah, I mean, it is, like I said, it is the evidence layer corollary to what we were talking about with net documents. They have some new agentic tools that are designed to, you know, best, I don't want to use the word exploit necessarily, but best exploit the data that you have and find what you need and make the connections you need. And those agents are the sorts of things that, you know, if you are coming at it through a different connector, rather than just trust that that connector is going to see the raw data and figure it out, you know, these agents are in a position to allow it to work with it.

55:04That will also allow it to be a little bit cheaper and more, you know, better. Like context windows get bigger, but they don't get infinitely bigger. So Everlaw can use its agents to use this process and these tools they have to first pass everything, basically figure out what's in it, build intelligent connections. You know, a lot like what that docs does with your internal documents, tagging it up, building the connections, figuring out those things that then allow future searches to not have to load up the universe in order to figure out where things are. it can can work from there so yeah i mean it just kind of more refinement upon the the logic as that that goes uh i saw some great panels about access to justice uh jim sandman was there uh talking about that uh always always a great uh you know and uh he had uh there were other folks on that panel too i know cat moon was on that panel but it was uh did you do the halloween costume story he did not do i don't believe he did a halloween costume he had you know i mean he's he's always been so good at kind of making that stuff very palpable uh and he has good stats uh and i i moderated a panel uh about everlaw for goods program i think one of the most interesting things there's so many for good programs out there that do great things but kind of predictable things.

56:34One that they do that isn't so obvious until you really think about it is they give their tech to newsrooms and investigative journalists who are getting thousands and thousands of FOIA responses and public records and picking up things from all these different agencies. And it allows them to use Everlaw technology to process that and get to the bottom things uh you know we talked to uh the panel i was on had the folks who won the pulitzer for uh investigating some habeas petition shenanigans that ice is up to uh some uh you know police brutality stuff uh and uh and the one of the part of the group that worked on the panama papers uh was there too but like all talking about the ways in which their jobs have gotten harder because of data and how they can use AI to solve that.

57:28So that was interesting. Yeah, it was great. I always liked that conference and they are moving east next year. They'll be in Washington, DC, as opposed to San Francisco. So for people on the East Coast, that's an opportunity to go if you haven't been to that. Well, we are pretty much out of time here. I did put this in the chat, but just because Mark Lauritsen is in our audience today, I just want to say congratulations to him. He won the Legal Technology Awards prom, whatever they call the event this year, this week, he won the Lifetime Achievement Award there. And I can't think of anybody more deserving of that award than Mark Morrison.

58:06So I was glad to see that. And Rachel, it was a pleasure to have you with us today. I really appreciated it. And to everybody else. We will be back next week talking about what happens next week. So hope to see you there. Have a good weekend, all. Bye-bye.