The Law Firm Disrupted: Walmart Won’t Pay You to Cut and Paste

Share on facebook
Share on twitter
Share on linkedin
Share on email

By Roy Strom, originally published by Law.com.

Walmart Won’t Pay You to Cut and Paste

Earlier this week, Walmart Inc. announced it would be rolling out 500 more giant vending machines in its stores to deliver online orders in seconds. The tool is designed to compete with online delivery services from Amazon.com Inc.

The world’s largest retailer also announced this week a tool that will compete (in some sense) with its outside counsel. Walmart has licensed a product from LegalMation that automatically drafts responses and initial discovery requests for employment and slip-and-fall suits filed in California. By this fall, the product should cover those cases in all 50 states.

LegalMation says it takes under two minutes to drag and drop a PDF of a suit into its product and receive a response to that case, in addition to a set of targeted requests for documents, form interrogatories and special interrogatories. That work has traditionally been handled by junior lawyers at Walmart’s outside firms, and LegalMation claims it can take them up to 10 hours to do. The savings on preparing an answer to these complaints is as much as 80 percent, LegalMation said.

“You’re still reviewing the outcome and reviewing the affirmative defenses,” said LegalMation co-founder Thomas Suh, a longtime legal technology advocate. “You’re eliminating the brainless cutting and pasting.”

LegalMation was born out of a California-based employment litigation boutique, LTL Attorneys, after one of the firm’s founders, Big Law ex-pat James Lee, attended a Harvard Law School training program for law firm managers about three years ago. The program featured discussions on what artificial intelligence would do to the legal market.

Lee bought the hype and began learning about AI capabilities. He determined it was “really good at volume, process-level tasks,” and Lee asked what part of his firm’s work fit that description. The answer was reading complaints and preparing answers to them, he said.

“It’s very tedious,” Lee said. “A lot of my [law school] classmates no longer practice law, I think because they did not like this tedious, mundane work they were doing over and over again.”

About six months after the Harvard program, Lee and Suh had drilled down on where to apply AI, and they teamed up with IBM’s Watson to build their product. They also had to develop their own neural network that they said is the “secret sauce” to LegalMation’s ability to parse legalese.

“We would not be able to do this without an AI engine like Watson, and likewise I don’t think a product like this would be doable without our neural network,” Lee said.

About a year ago, Lee and Suh approached Walmart, which was a client of LTL Attorneys, to discuss LegalMation’s ability to automate responses to suits. After testing the tool in a pilot with its own lawyers and with some of its outside attorneys, Walmart’s legal department licensed the tool, which is sold on a per-case basis with discounts based on volume.

In a statement announcing the deal, Walmart’s Alan Bryan, senior associate general counsel for legal operations and outside counsel management, said, “LegalMation is exactly the type of innovative AI technology that brings smart, efficient changes to the legal profession. We are committed to offering customers everyday low prices and are continuously looking for ways to take costs out of the system.”

The Walmart case is a great example of the disparate motivators for change in the legal industry. A company is in a price war with a competitor. Its legal department gets the cue that it needs to cut costs. It licenses a tool to help do that. And, somewhere down the line, a junior associate at a law firm is reviewing an answer to a complaint rather than cobbling it together.

How frequently that change happens inside America’s largest corporations is perhaps the best indicator of how quickly tools like LegalMation will saturate the market. And when that time comes, perhaps, then the last associate in a law firm cuts and pastes together a response to a slip-and-fall case.

From the law firm side, however, the incentives to take costs out of the system are less clear.

Lee said LegalMation is currently being piloted by a number of Am Law 100 firms and he expects to announce licenses with some of those firms soon. But when asked what the biggest threat would be to his business’ future prospects, Lee said it was lawyers’ resistance to change. He said partners at law firms almost always worry about the loss of associate hours that corresponds with licensing a tool like LegalMation.

In one instance, an Am Law 100 firm’s management committee learning about LegalMation was hesitant to show it to their associates, worrying the young lawyers would “freak out,” Lee said, about what it meant for their job prospects. Instead, the committee showed it to a group of “superstar” associates who it figured would stay at the firm. Their response?

“The reaction was, ‘Hey, this is fantastic. I don’t have to do this anymore. That’s awesome,’” Lee said. “They want to focus on more substantive work: Oral arguments, substantive motions and depositions.”

Time will tell if that is how the transition plays out. But it seems likely that if LegalMation provides a good, basic product, eventually law firms will flock to it.

Roy’s Reading Corner

On Listening: This might not be something to read, but it’s worth a listen. My Law.com colleague Ben Hancock put together a meaningful podcast on the future of AI in the legal services market. Listen to the podcast here or find it on Apple Podcasts and Google Play.

Fair warning: He interviewed me. But he also interviewed people you might not be sick of hearing from, such as Emily Foges, CEO of Luminance, which applies machine learning to contract review; LegalMation co-founder James Lee, who as noted above is building AI tools for litigators; IBM Watson Legal co-founder Brian Kuhn; and Itai Gurari, co-founder and CEO of Judicata, a legal technology company focused on legal research.

On Marketing: This headline absolutely kills me: “Focusing on Client Retention May Mean Restructuring the Firm.” It’s like “Focusing on Selling Burgers May Mean Restructuring McDonald’s.” You would hope retaining clients would be central to the structure of a law firm. Alas. Kathryn Whitaker, a member of the Legal Marketing Association’s board of directors, explains why that might not be the case.

On Legal Ops: My colleague Gabrielle Orum Hernández has a great interview with Christopher Sweet, currently a director of consulting at Elevate Services and who previously worked in legal ops roles at JPMorgan Chase & Co., Reed Smith and GlaxoSmithKline plc. Sweet, on the future skill sets of general counsel: “General counsel are going to be hired specifically for their game plan in running the legal department like a business. That’s not new, but they’re going to want to know what’s in your playbook, and not just say, ‘We’re gonna manage it like a business.’ It’s a new generation of more senior attorneys who are going to be able to do that.”

Contact Us

Careers

You want to work at LegalMation because XYZ. Check out our open positions below and join our team.

Platform Overview

LegalMation provides a suite of Artificial Intelligence tools to help litigation attorneys and legal professionals practice at their highest levels. Our litigation automation solutions tackle routine litigation tasks. Unlike existing template generators and form-fillers, LegalMation's ground-breaking AI system is able to dynamically produce responsive pleadings, discovery requests, discovery responses, and related documents that are tailored to the claims, allegations, and requests in the legal document uploaded, incorporating jurisdictional requirements as well as the attorney’s own style, formatting, and response strategy.

Our litigation analytics solution uncovers deep insights into our customers' own data (the data sitting underneath the surface), drilled down to granular data points, previously not possible. The impact? Our solution fundamentally transforms how cases are assigned, budgeted, settled, pitched, and much much more.

Developed by a passionate group of award-winning litigators and highly accomplished software developers, LegalMation is focused on liberating litigators to allow them to focus on more valuable tasks in their practice.

LegalMation distinguishes itself from other Artificial Intelligence products in several key aspects.:

  • LegalMation is the first Artificial Intelligence company to focus solely on using AI to automate and enhance litigation tasks.
  • LegalMation uses cutting-edge AI to power its platform and, unlike some other legal tech platforms, LegalMation requires no human involvement to generate its output.
  • LegalMation's automation solution is not a template generator, form-filler, or other Q&A-driven tool. Rather, our A.I. solutions generate actual work product--caliber drafts of legal documents comparable to that of an attorney or legal professional that only require minor editing and basic review before filing/serving. Drafting these documents from scratch often takes an associate attorney or paralegal an entire day, but our products can produce comparable high-quality drafts in mere minutes.
  • LegalMation's analytics solution, takes an entirely different approach to data analytics. Our proprietary solution ingests a company or law firm's own existing data (billing, case results, etc.) and provides deep insights down to granular levels previously not possible. Unlike publicly available statistics, we believe our customer's own data provides truly actionable insights. After all, less than 5% of case results are publicly available.
  • LegalMation’s solutions are fully customizable to our customers' needs.
  • LegalMation’s solutions are easy to use and require no computer knowledge besides how to use a mouse and keyboard. Our products are browser-based; there is nothing to download or install. The interface is simple and clean, and designed to be accessible to even the least tech-savvy. As a result, the adoption cost for integrating LegalMation to an existing organization's workflow is very, very low.

Corporate In-House Case Study

A leading global retail giant achieves significant savings on legal fees on its high-volume litigation matters using LegalMation’s Complaint Analysis tool.

The Legal Operations group of a leading global retailer with significant litigation volume across the country was searching for technology tools to increase efficiency and consistency on its litigation matters, lower its legal spend, and obtain more value from outside counsel. Working with LegalMation, the retailer identified two litigation areas with large volume where the deployment of LegalMation’s Complaint Analysis tool could have a significant impact: employment and premises liability tort litigation.

The retailer conducted a pilot of LegalMation’s Complaint Analysis tool by asking select outside counsel to run complaints through the LegalMation Complaint Analysis tool and compare the outputs to those generated by the firm’s typical workflow.  LegalMation’s Complaint Analysis tool was able to generate an answer, requests for production and interrogatories that were almost identical to those generated by outside counsel and tailored to the facts and allegations of each.

Today, this global retailer has made LegalMation an integral part of its workflow and case assignment process. When a new lawsuit is served on the retailer in one of the jurisdictions where LegalMation operates, an in-house paralegal runs the complaint through LegalMation’s Complaint Analysis tool and sends the output, consisting of an answer, requests for production, interrogatories, and other jurisdiction or firm-specific output to the selected outside counsel for the matter.  Outside counsel then bills the retailer solely for the time spent reviewing and editing this initial output which generates significant savings for the global retailer.

Challenge

  • Increasing budgetary pressure to lower outside counsel legal fees
  • Obtain more value from hours billed by outside counsel
  • Lack of consistency in work product and quality from outside counsel

Solution

  • Deploy LegalMation internally to generate initial draft responsive documents in minutes
  • Integrate LegalMation into its initial case assignment process

Results

  • Up to 80% savings on outside counsel legal fees on key early stage litigation document drafting.
  • Reallocation of outside counsel time away from process/routine work to higher value strategic tasks.
  • Increased consistency and quality in work product

Large Firm Case Study

An Am Law 100 labor and employment law firm was searching for ways to become more competitive and capture more market share

Handling over 5,000 employment related litigation matters per year across the country, the Am Law 100 law firm (the “Firm”) needed a quantifiable solution to lower its servicing costs and provide more value to its national clients. The Firm engaged in extensive testing of LegalMation’s platform across multiple offices to determine its effectiveness.

Using LegalMation’s Complaint Analysis tool, the Firm was able to reduce the attorney time spent preparing answers, affirmative defenses, and initial written discovery (requests for production, interrogatories, and other jurisdiction-specific requests) from an average of 6-8 hours per matter, to less than 1 hour (including review time by an attorney). The Firm tested LegalMation’s tools across multiple types of employment cases across various jurisdictions and concluded that the resulting draft documents were not only produced incredibly fast, but were also consistent in quality.

Today, the Firm is able to offer more competitive proposals for its volume matters, which in turn allows it to obtain additional work from national clients.

Challenge

  • Downward price pressure in high-volume, lower-exposure matters
  • Making Alternative Fee Arrangements more competitive and yet more profitable
  • Differentiate from competitors during marketing pitches
  • Lack of work product consistency from associates/paralegals

Solution

  • Integrate LegalMation into volume litigation matters in the Firm’s busiest offices

Results

  • Up to 80% time savings on key litigation tasks
  • Higher profit margins on volume matters, particularly those on AFAs
  • More distinctive marketing
  • Higher levels of associate satisfaction

SMALL LAW Firm Case Study

A high-caliber general litigation boutique reduced paralegal and associate time and money expended on key early litigation tasks by 75%+

A general litigation boutique with around 40 attorneys needed to cut costs in order to stay competitive in a very crowded local market and also sought to minimize reliance on support staff.

Using LegalMation’s platform, the boutique law firm was able to reduce the attorney (and paralegal) time spent preparing answers, initial discovery (requests for production and interrogatories), and discovery responses, including objections, from several hours per matter, to less than 1 hour (including review time by a supervising attorney). The boutique firm tested LegalMation’s Complaint Analysis tool and Discovery Analysis tool across multiple practice areas and concluded that the resulting draft documents were not only produced incredibly fast but also with consistency and quality similar to its own junior attorneys and paralegals. In particular, the boutique law frim, which did not have the luxury of a large support staff, found LegalMation’s Discovery Request tool particularly helpful in dealing with burdensome discovery requests served on its clients.

Today, the boutique law firm is able to offer more competitive proposals for its matters and through the efficiency gained by LegalMation’s platform compete against national law firms with more resources.

Challenge

  • Downward price pressure due to a crowded local market
  • Limited associate/paralegal resources to handle routine drafting tasks
  • Compete against national law firms with more resources
  • Differentiate from competitors during marketing pitches
  • Lack of work product consistency from associates/paralegals

Solution

  • Deploy LegalMation’s Complaint Analysis tool to generate initial draft responsive pleadings, and the Discovery Analysis tool to quickly generate shells and responsive objections throughout the life of a case

Results

  • 70-85% time savings on key litigation tasks
  • Higher profit margins on volume matters, particularly those on AFAs
  • More distinctive marketing
  • Higher levels of associate satisfaction
  • Reduced staff overtime
 

Success Story

“Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam.

Ut enim ad minim veniam. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam.

Amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam.”

John Smith,
Company Name
James M. Lee
Co-Founder & CEO

James M. Lee is co-founder and CEO of LegalMation. He is a founding partner of LTL Attorneys LLP, a nationally recognized litigation boutique. As an experienced litigator, he has tried numerous cases in federal and state courts. He has been recognized as a top business litigator by various legal publications including the National Law Journal. James has served as lead counsel to a number of Fortune and multinational clients including Wal-Mart, Thomson Reuters, Symantec, and VIZIO. He was formerly associated with litigation powerhouse Quinn Emanuel before co-founding LTL Attorneys. He is a frequent and noted speaker and commentator in the field of AI and innovations in the field of law. He received his J.D. from Stanford Law School, and his B.S. from the University of Southern California. At LegalMation, James serves as the key driver of the Company’s vision and strategy.

Technical Support

Need help with LegalMation? We're here to assist.
Send us a quick note below and we'll be in touch right away.

You can also call us at (949) 662-1429, Monday through Friday, 8:30 a.m. to 6:30 p.m. PST.

Lorem Ipsum Dolor Sit Amet

Topic & name of speaker

Hosted by John Smith
1/25/19 @ 5pm PST

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. 

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Sign up for event notifications

Insurance COMPANY Case Study

A national insurance carrier achieves significant savings on its high-volume, low exposure litigation matters through its adoption of LegalMation’s Complaint Analysis tool

A national insurance carrier with significant litigation volume across the country for its insureds, was searching for technology, tools, and processes to increase efficiency on its litigation matters to lower its litigation costs. This national insurance carrier partnered with LegalMation to identify an area of litigation where LegalMation could have a significant and immediate impact and decided to deploy LegalMation’s Complaint Analysis tool for all of its third-party motor vehicle tort litigation.

LegalMation worked closely with the national insurance carrier to customize the output from its platform to generate documents that mirrored the current output of the national insurance carrier’s attorneys and paralegals.  LegalMation was able to automate the creation of an answer, requests for production of documents, interrogatories, requests for admissions, and deposition notices, all tailored to the facts and allegations of each complaint and almost indistinguishable from those manually created by the insurance company’s attorneys and paralegals.  LegalMation was able to generate this output in 2-3 minutes—a significant time savings over the insurance company’s prior practice for generating this output.

Following a pilot program consisting of processing all of its complaints for a single jurisdiction through LegalMation, the national insurance company made LegalMation an integral part of its workflow for all jurisdictions where LegalMation currently operates. In these jurisdictions, when a new motor vehicle-related lawsuit is served on the insurance company or its insureds, the assigned counsel or paralegal runs the complaint through the LegalMation Complaint Analysis tool, downloads the initial outputs, which are then reviewed by the attorney or paralegal and finalized, all within a few minutes.

Challenge

  • Increasing budgetary pressure to lower legal spend on defense of insureds
  • Obtain more value from staff counsel
  • Reduce legal secretary/paralegal overtime

Solution

  • Deploy LegalMation internally so staff/captive counsel can generate initial response draft documents in minutes

Results

  • Up to 80% time savings on key litigation tasks
  • Reallocation of staff/captive counsel time away from process/volume work to higher value strategic tasks
  • Increased consistency and quality in work product

Request FREE TRIAL