211 | 🗳️ 🤑 GenAI creating $100,000 in billable hours?

In today’s Brainyacts:

1. The micro gains of using generative AI

2. Does generative AI practice law?

3. Partial dismissal in key GenAI case and other AI model news

4. Be careful applying to job ads and more news you can use

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Lead Memo

🌲🌳 The Micro-Mega AI Paradox: Are We Missing the Forest for the Trees?

Two recent reports set up an emerging dilemma over the promise and burden of generative AI. Here I touch on them briefly in order to help frame this issue.

The two reports are:

1. Goldman Sachs: Gen AI: Too much spend, too little benefit? This report is more pessimistic. A key quote is “AI technology is exceptionally expensive, and to justify those costs, the technology must be able to solve complex problems, which it isn’t designed to do.”

2. Thomson Reuters: Future of Professionals Report. Here is a key quote: "Our respondents predicted that AI could free up as much as 4 hours a week for professionals. For US lawyers alone, that is a combined 266 million hours of increased productivity. That could translate into $100,000 in new, billable time per lawyer.”

My take:

We are far enough into the generative AI era that it has now become fashionable to take contrarian stances on the transformative potential of generative AI. Skeptics point to the massive infrastructure investments required, the regulatory challenges ahead, and the potential societal disruptions as reasons to check our enthusiasm. While these concerns aren't unfounded, they are overlooking (devaluing) a crucial factor: the immediate, tangible benefits that individual users are already experiencing.

Yup, let’s go back to the old horses versus cars analogy. Critics in the early 20th century could have (and did) raise valid concerns about the need for paved roads, fueling stations, manufacturing infrastructure, and new regulations. Today we are still wringing our hands over carbon emissions from vehicles. Yet, despite these macro-level challenges, the automobile revolution proceeded and continues. Why? Because the micro-level gains – increased speed, convenience, and range of travel – were significant enough to drive widespread adoption. We overlooked all the mega concerns because our micro gains were too compelling.

Today's AI landscape bears striking similarities. While pundits debate the long-term implications and challenges of AI adoption at scale, individual professionals are already reaping substantial benefits. As noted above, the Thomson Reuters report highlights that AI tools could free up to four hours per week for the average professional within the next year. This micro-level productivity gain is not just significant; it's transformative on an individual scale.

These individual gains, when aggregated, have the potential to drive the very macro-level changes that skeptics are concerned about. Just as the popularity of automobiles spurred investment in road infrastructure and fuel distribution networks, the widespread adoption of AI tools by professionals may naturally lead to solutions for larger-scale challenges.

The Goldman Sachs report, while raising valid concerns about the costs and complexities of AI implementation, may be underestimating the power of these micro-level benefits to drive macro-level change. It's worth considering whether the ROI calculations for generative AI are being viewed through the wrong lens. Instead of focusing solely on the massive upfront investments required for full-scale AI transformation, perhaps we should be paying more attention to the cumulative impact of individual productivity gains.

This is not to say that the challenges highlighted by AI skeptics aren't real or important. Issues of data security, ethical use, and potential job displacement need to be addressed. However, history suggests that when a technology offers significant benefits at the individual level, solutions to larger-scale problems tend to follow.

But let’s be fair here. The hype has been overwhelming and we see businesses of all types rush into the hysteria. AI Czars are being appointed. CIOs, innovation leads, and other senior leaders are trying to claim AI as their domain, using it to bolster their rank and position. It has certainly become a tool for reputational gains in the market and in office politics. So I am indeed skeptical myself - but of the people leading much of the AI efforts, not of the technology itself.

Case in point. I frequently facilitate conversations and speak to groups of lawyers throughout the market about generative AI. Most in the audience are curious but are truly still beginners, having maybe tried using it just a few times. They are earnest about learning but tired of hearing the same things over and over again (“AI won’t replace you, a lawyer who uses AI will.” Ugh – so tired). Want to know what gets them to lean in? To perk up? To start asking questions? It is when I show them the impact on a knowledge worker’s cognitive energy. By using Generative AI, we can reduce the natural cognitive deficit we experience most days.

It's no secret many lawyers are overworked and unhealthy (mind and body). I’ll stop here because you know the rest of the story.

See if generative AI can save a lawyer 4 hours per week. That is 4 hours to spend doing something else or nothing at all. It’s 4 hours less of context switches and distractions which deplete our cognitive reserves. It’s 4 hours we have to maybe slow down on some things, do better work, or take a walk.

While Goldman may be making headlines calling generative AI’s bluff on institutional investment and gains, I am witnessing material cumulative gains by the people. In the end, people and their use will make the case (or not) for taking on the burden of further developing generative AI.

To Goldman; it’s the people stupid!

Spotlight

🤪🤬 Nobody Knows What Constitutes the “Practice of Law”

Ed Walters is best known as a founder of Fastcase, an online legal research company. He spent time at Covington & Burling as well as the White House.

This paper (link below) is worth a read as it touches on a nefarious issue in the legal profession - what is the practice of law (spoiler - nobody knows) and how generative AI is on a collision course with UPL regulations.

Here is a link to the PAPER.

AI Model Notables

► The judge overseeing a billion-dollar class-action lawsuit against GitHub, OpenAI and Microsoft over the alleged unauthorized use of intellectual property (IP) to train the “GitHub Copilot” artificial intelligence (AI) coding software has partially dismissed the claims against the defendants.

► The OpenAI Startup Fund and Arianna Huffington’s Thrive Global announced today the creation of a new company, Thrive AI Health, exclusively devoted to building a hyper-personalized AI health coach. Read more HERE.

► Elon Musk’s X is exploring more ways to integrate xAI’s Grok into the social networking app.

► You can now publish and share your artifact on Anthropic’s Claude

News You Can Use:

➭ Job scams surged 118% in 2023, aided by AI. Scammers may pose as recruiters or post fake job ads in order to get sensitive personal and financial information from job seekers.

➭ Japan’s AI policy released

➭ Nintendo will not use generative AI to build game titles

➭ Etsy, the artisanal e-commerce giant, will require that every item for sale incorporate a "human touch."

➭ Research: Using AI at work makes us lonelier and less healthy

Who is the author, Josh Kubicki?

Some of you know me. Others do not. Here is a short intro. I am a lawyer, entrepreneur, and teacher. I have transformed legal practices and built multi-million dollar businesses. Not a theorist, I am an applied researcher and former Chief Strategy Officer, recognized by Fast Company and Bloomberg Law for my unique work. Through this newsletter, I offer you pragmatic insights into leveraging AI to inform and improve your daily life in legal services.