Enrico Schaefer, an AI-focused attorney, explains how large language models will transform legal work through efficiency, not replacement. Clausebase, an intelligent clause library, can cut contract editing work by 90%. Lowering drafting costs from $5,000 to $2,000 expands access to legal services for startups.
Chapters
So 2 questions. One, is AI going to affect the practice of law? And 2, if the answer is yes, how is AI going to affect the practice of law? Let's go ahead and jump in and take a look at why the answer to the first question is yes, AI is going to affect and touch every different aspect of people who provide services as well as people who provide products. And then let's talk to the most important question, which is how is it going to affect and why is it that AI will affect the practice of law? All right, let's jump in. You're seeing a lot of news articles about how ChatGPT, which is the OpenAI project, and other new AI tools are, are affecting law, lawyers, law practice. And it's pretty basic stuff at this point, right? So you're going to see here these different professionals are talking about it and Uh, this, this particular attorney says, well, people ring up and say this happened, have I got a case? And I have to explain it's not that simple. The facts matter. One fact can change everything. So he asked ChatGPT to write an explanation similar to what a doctor tells a patient when they say, am I dying? Okay. And he said the result was good enough. Well, that's pretty pedestrian. That's pretty basic. Let's take it a step beyond. that kind of basic script writing. Let's talk about contract drafting. And there's a variety of different softwares that have been in the document automation space which are running hard to now incorporate AI into document drafting. So let's jump into what this particular clausebase.com service is all about. It's in the EU. You think, okay, it's going to create a, a legal document for me. How is that possible? Because lawyers bring so much to the table in terms of, you know, advice and insight and experience and asking the right questions and all these different things which supposedly support the hourly fees. So what this service is doing is not offering legal advice per se, it's optimizing the process of contract drafting. Let's— before we look at the video, let's take a look at why this can be true. Why is— how is AI going to affect the practice of law? And it has to do with large language models, uh, in the, uh, AI systems. And what, what is a large language model? Well, large language models are, uh, you know, it's a deep learning algorithm that basically can recognize and summarize, summarize, translate, predict, and generate text and other content based on knowledge gained from a massive data set. Let's break that down. An algorithm that can recognize— it can look at something on the paper, it can look at a prompt or a question, and it can recognize what's being asked. It can recognize what it's— what's there. It can then take a, a, a set of questions, it can summarize them, or it could take a data set and it can summarize that down. So in the legal aspect, if I know that I want a contract that's a licensing contract that that needs to be drafted, right? So I asked a question, um, what kind of licensing contract do I need? And then I give it a bunch of variables. It can summarize that, it can translate it, but it also can generate text and other content based on these large, massive data sets. And there's an optimization that comes from the process of drafting those documents, from the process of drafting those documents. Think about how much time is wasted formatting, going to say sources to say, here is a, you know, a base contract. I think there's some relevant provisions here. I'm going to cut and paste them and bring them over into this contract. Here's another contract that I did last year that I think is relevant. There might be a couple provisions here that I can analyze and then to see if they might apply to this licensing contract. AI does all that for you. It knows how to search for what might be relevant and provide those things as options. So the nuts and bolts of drafting a contract, 90% of it is just busy work trying to get information and put information together. AI can optimize that process. That is why AI will most certainly affect the practice of law, because it is going to create efficiency. So large language models essentially Do what we see here. You ask it to do something, you toggle a button, you click a selection, you put a prompt in saying, here's what I need, and you provide it context. It then processes that using an algorithm against a large data set, and then it comes back with, in this case, text output or a numeric representation. So how is that going to apply to contract drafting? Well, this video here at cloudbase.com says it really well. So let's take a look at the cloud-based video and we'll break that down.
Drafting legal documents can be challenging. Some may believe it's little more than filling out a few placeholders. That couldn't be further from the truth. It starts with looking for the right base document. You may have some templates lying around, but it is much more likely that you have to dig through emails and old files or ask colleagues Next.
All right, right there, stop. Searching for information. Large language models search for information and then give you information back. So if I need all the variations of a licensing contract, it was a copyright licensing contract with a limited term that is going to be an exclusive license for the duration of the term that's going to provide the right to display, to, uh, to use Uh, to create derivative uses. I can provide that information to AI, and AI can then search hundreds, thousands, tens of thousands of templates and then provide me my options back. The efficiency of that is practical and it is significant. It could be hours and hours of what would otherwise be billable time to a client in order to get to the true starting point of providing value as the attorney, deciding which ones you are going to select, which ones you're going to keep, and why. All right, let's dive back in and find out again why AI will affect the practice of law on a process and efficiency basis.
Next, you have to remove clauses and insert better alternatives. Searching, copying, pasting, ensuring consistent terminology, and dealing with layout issues represent 50% of all editing work.
Find and replace. When you're doing these contract drafting, you're pulling this— these clauses from these different places, and they're all using a different terminology for, uh, client name, quote unquote, the company, or whatever the client's name is, or a particular definition. AI can find all of that in the document for you and make all of those changes, or at least get you 90% of the way there without having to do any work.
Enter Clausebase, paradigm-shifting technology that reduces editing work up to 90%. You can build a library of intelligent clauses that can be inserted with the click of a button and tailored to your needs. You no longer have to perform any cleanup because clauses will automatically adapt to the document they are inserted in. Terminology will always be completely consistent, and definition lists will be compiled automatically with 100% certainty. When you change legal nuances in one clause, other clauses will immediately change when necessary, so you don't have to remember to also change a clause 2 pages down when you alter a sentence.
So let's stop there. So some people think, okay, uh, we can't have AI drafting contracts, that's the unauthorized practice of law, that is going to create a number of different issues because errors sometimes get generated out of these large language models, and the datasets are not complete in all instances. And so you could get bad information, but that's not the point. There's not going to be a quote-unquote robot lawyer. There is going to be efficiencies using technology. That technology is AI. In order to optimize the practice of law, deliver more value in less time, make legal services available to more people at a price point. Think about this for a minute. Just think about this. If a budget to draft a licensing contract is $5,000, and for many instances it's $20,000, but if it's $5,000 at a minimum, How many new startup businesses, how many growth companies are going to say, yep, that's worth a spend, I'm going to spend that $5,000? Let's just say it's X number of companies are willing to do that. If you get that price point down to $2,000, you now have 10x the number of companies that would say yes to that ROI. So you've expanded the market dramatically by reducing the costs of legal. My name is Enrico Schaefer. I'm an AI attorney, tech law specialization. We'll see you next time.
